51-year-old Jose Angel Aman from Washington DC was recently charged by prosecutors for operating a fraudulent investment scheme in the US and Canada.
Details of the Charges
According to a statement by the DoJ, Aman operated his diamond Ponzi scheme form May 2014 to May 2019. In collaboration with his partners, he solicited investments for fictitious diamond contracts. He claimed that the funds would go towards the purchase of large uncut diamonds.
How He Ran the Scam
To keep investors happy, he used the proceeds from new investors to pay off old investors. He managed to keep this up for five years until May 2019. At no point was he making money from the alleged diamond business.
When things got tight, Aman created “Reinvestment Contracts.” He used these contracts to entice new users to roll over cash into new fictitious deals, which enable Aman to keep the Ponzi scheme running.
The Crypto Scam
To keep the Ponzi scheme from collapsing, Aman created Argyle Coin. Aman and his partners promoted Argyle Coin as a crypto project backed by diamond trading. The project received a lot of flooding form investors but only a small fraction of the funds went into creating the token. Most of the funds went to pay off the diamond scam investors who had invested in the Eagle Financial Diamond Group Inc. and Natural Diamonds Investment Co.
The DoJ claims that Aman and his partners received over $25 million from hundreds of investors during the life of the Ponzi scheme. He used the funds to pay interests to investors in the fictitious diamond business, pay expenses, commissions to his partners, and to support his luxurious lifestyle. For instance, Aman bought horses, paid for horse riding lessons, and paid rent.
In 2019, the SEC obtained a court order to freeze all operations of Argyle Coin. A US district court granted a request for the asset freeze and temporary restraining order during the investigations in the crypto company. If charged, Aman could face up to 20 years in federal prison as well as being required to make restitution payments.