Man Gets 6 Years for $25M Diamond and Crypto Ponzi Scheme

Photo: Coindesk

A South Florida federal district judge sentenced a Washington, D.C., man to six years in federal prison for operating a $25 million diamond investment scheme that included a crypto component. He must also pay over $23 million in victim restitution. 

The accused, Jose Angel Aman, and his partners were sentenced by U.S. District Judge Rodolfo A. Ruiz II of the Southern District of Florida for soliciting funds from people in the United States and Canada for purported diamond contracts. 

Aman and his partners promised investors the money was safe and backed by an inventory of actual diamonds, the U.S. Department of Justice (DOJ) said, but Aman “rarely used investors’ money to purchase, cut and resell rough diamonds. Nor did Aman have a $25 million diamond inventory.”

The DOJ said Aman also had a cryptocurrency venture, Argyle Coin, LLC, that was set up only after funds for the regular diamond investment scheme began to dry up.

While the accused solicited new funds on the pretext of developing a crypto token backed by diamonds, the announcement said only a fraction of the funds were used to develop that token and the rest went to “purported interest payments to the earlier investors and to benefit himself and his partners.”

"To conceal the fraud, Aman made purported interest payments to existing investors with money from new investment victims. At the end of the investment period, Aman and the partners would convince the investors to roll over their money by falsely claiming that the investors had the full value of their investments to put into new deals," according to the DOJ. These “Reinvestment Contracts” were used to buy time until Aman could locate new investors and additional money, DOJ added.

Reprinted from Coindesk, the copyright all reserved by the original author.