US citizen charged with running diamond Ponzi scheme, cryptocurrency rip-off

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US citizen charged with running diamond Ponzi scheme, cryptocurrency rip-off

US citizen charged with running diamond Ponzi scheme, cryptocurrency rip-off

A 51-365 days-aged US citizen has been charged with running a diamond and cryptocurrency-essentially essentially based Ponzi scheme.

Prosecutors claim that Jose Angel Aman, from Washington, DC., operated a unfaithful funding scheme in all places in the United States and Canada, luring traders with promises of hasty returns within the diamond replace.

The US Department of Justice (DoJ) stated on Friday that Aman changed into the operator of a Ponzi scheme from Could possibly possibly additionally honest 2014 to Could possibly possibly additionally honest 2019. Together alongside with his companions, Aman allegedly solicited contributors to speculate in “diamond contracts,” wherein their cash would be ragged to grab abundant, tough, uncut diamonds. 

These diamonds would then be cut and polished in show to be resold at a earnings. To instill belief within the organization, Aman stated that funds were backed by his get dangle of bodily coloured diamond inventory, it looks value $25 million. 

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As is the case with many Ponzi and get-prosperous-hasty schemes, traders quiz to peep a cut of the profits and with out this, Ponzi schemes are exposed and collapse rapid. Therefore, Aman allegedly ragged investor funds to pay off earlier funding “ardour,” and as extra traders joined the pool, the transfer of funds down the chain persevered — with out any expert earnings obtained from diamond purchases. 

When funds ran low and the operator changed into at possibility of being exposed, he allegedly created “Reinvestment Contracts” to entice customers to roll over their cash into fresh ‘deals’ in show to grab Aman time to envision in fresh traders. 

On the opposite hand, this would possibly possibly no longer raise on with out a waste in sight, and US prosecutors impart that Aman situation up Argyle Coin because the Ponzi scheme changed into on the verge of collapse. Argyle Coin claimed to be a cryptocurrency-venture backed by diamond procuring and selling, and as a fresh wave of funding poured into the coffers, handiest a “part of the cash received” changed into ragged to provide a cryptocurrency token.

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As a replacement, the DoJ says the majority of the funds were ragged to pay off traders from the old Ponzi program, underneath the names Pure Diamonds Investment Co. (Pure Diamonds) and Eagle Monetary Diamond Community Inc (Eagle). 

“At some stage at some stage within the Ponzi scheme, Aman and his companions peaceable over $25 million from tons of of traders,” prosecutors impart. “Aman allegedly ragged the cash to operate purported ardour funds to traders, to pay business costs, to pay commissions to the companions, and to strengthen his get dangle of lavish standard of living.”

Investor funds were allegedly ragged for functions including housing hire, horse purchases, and riding lessons.

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In 2019, the Securities and Alternate Fee (SEC) obtained an emergency court show to freeze Argyle Coin’s operations. The US District Court for the Southern District of Florida granted a seek files from for a non permanent restraining show and asset freeze while the cryptocurrency organization changed into investigated. 

Aman is facing charges of wire fraud, which would possibly possibly possibly consequence in as much as 20 years within the aid of bars, as properly as restitution funds. 

Previous and related protection

  • 2gether hacked: €1.2m in cryptocurrency stolen, native tokens supplied in alternate
  • IRS presents grants for utility to hint privacy-focused cryptocurrency trades
  • Lazarus neighborhood strikes cryptocurrency firm thru LinkedIn job adverts

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