A man accused of defrauding investors by making promises of a diamond-backed digital currency will face seven years behind bars for his alleged crime. The man will also have to pay up to $23 million in victim restitution.
Jose Angel Aman defrauded investors in Canada and the United States from 2014 to 2019, soliciting them to invest in diamond contracts, according to a press release by the U.S. Department of Justice. Together with his partners, Aman allegedly lied to investors that he used their funds to buy rough diamonds, cut and resell them at a profit. He told the investors that his was “high return, no risk” business.
The promises were false, the DoJ stated. Aman and his partners never had any diamonds. Instead, they used new investors’ money to pay off the existing investors in a Ponzi scheme mode. At the end of the investment period, they would convince the investors to sign reinvestment contracts, purportedly to put their funds into new and more lucrative investments.
When their diamond Ponzi scheme started to unravel, they jumped on to the next idea—cryptocurrencies. Aman set up Argyle Coin LLC, a company he claimed was developing a diamond-backed token. Just as with his previous sham venture, he marketed the new company as ‘high return, no risk.’
After soliciting funds from investors, he only used a small portion to develop the digital token. With the rest, he continued paying off existing investors to create the illusion of profitability.
“During the course of the Ponzi scheme, Aman and his partners collected over $25 million from hundreds of investors. Among other things, Aman used the money to support his lavish lifestyle,” the DoJ said.
As CoinGeek reported, the DoJ charged the Washington D.C native in September with wire fraud. In 2019, a group of Venezuelans also filed a lawsuit against the 51-year-old and his co-conspirators, claiming they had defrauded them. Aman allegedly targeted the Venezuelans as they were new to the U.S., having moved to the country to ‘start a new life’ just months prior.
Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift and Ethereum—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.
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