The cryptocurrency industry still remains highly unregulated, and as a result, scams and ponzis have become quite common. Recently, South Florida Federal prosecutors have charged a D.C. resident with wire fraud in relation to a Ponzi scheme he was operating where he claimed to be developing a diamond-backed token.
According to the complaint, Jose Angel Aman, allegedly tricked investors by telling them they were investing in diamond contracts via a company dubbed Argyle Coin, LLC, and promised that the funds would be used to purchase diamonds, which Aman would then clean, cut, and resell.
The US Department of Justice (DOJ) claims that Aman and his partners assured investors that this investment would produce high returns and has no risks since it was backed by Aman’s diamond inventory.
Furthermore, Aman allegedly used the funds from new investments to pay interest to previous investors and convinced new investors to funnel their money into fraudulent deals to keep the Ponzi cycle going.
When the scam began to fall apart, Aman looked for new investors for Argyle Coin, LLC, which aimed to design a crypto token that was backed by diamonds.
The DOJ adds that Aman only used a portion of the new funds to develop the digital asset, and a major portion of the sum was used to pay earlier investors and keep the scam cycle operational. He also used a portion of the funds for personal gains.
Jose Angel Aman allegedly made over $25 million via these schemes.
The Securities and Exchange Commission received an emergency court order back in May 2019 against the Argyle Coin ICO and intercepted the scam.
As of now, Aman has made his initial appearance before the court in West Palm Beach.
Scammers continue to prevail
The crypto industry has seen its fair share of Ponzi’s with some of the major ones like the OneCoin Ponzi that reportedly amassed more than $5.7 billion.
As previously reported by The Daily Chain, last month the Commodity Futures Trading Commission (CFTC) charged a Florida resident Alan Friedland, for allegedly operating two scam companies going by the name Fintech Investment Group, Inc and Compcoin LLC, and defrauded victims of more than $1.6 million.