The United States Securities and Exchanges Commission (SEC) said in a release today May 21 that it has obtained a court order to halt the operations of Argyle Coin LLC because its owner is operating a $30 million Ponzi scheme.
According to the SEC, the South-Florida based business run by Jose Angel Aman portrays itself as a cryptocurrency business but is only using investor funds to run a Ponzi scheme that has attracted over 300 customers within the U.S and neighboring Canada.
The SEC temporarily froze assets belonging to Argyle Coin, Aman, and other named defendants.
Nature of the Alleged Crime
The SEC alleges in its complaint that Aman operated Argyle Coin as a Ponzi scheme using funds amassed from new investors to pay off those who got in earlier.
As per the regulators, this is not the first time Aman is running such a business model, having done so with two other companies, namely Natural Diamonds Investment Co. (Natural Diamonds) and Eagle Financial Diamond Group Inc (Eagle).
To convince potential investors, the SEC claims that in May 2014, Aman worked with two of his associates, Harold Seigel and Jonathan H. Seigel, to sell unregistered securities in Natural Diamonds and Eagles.
Aman and co. promised investors that they would invest raised funds in whole diamonds and cut and sell it in return for profits. Then, in October 2017, the men allegedly continued the crime by offering investments in ArgyleCoin and falsely promising investors that funds which were purportedly backed by fancy diamonds would go into the development of the cryptocurrency business.
However, the men used at least $10 million of raised funds to pay back earlier investors and also to take care of Mr. Aman’s expenses, including rent and purchase of horses.
As per the release, the companies (Natural Diamonds, Eagle, Argyle Coin) and individuals (Aman, Harold Seigel, and Jonathan H. Seigel) face charges over securities registration violations.
Also, Natural Diamonds, Eagle, Argyle Coin and Aman face charges for securities fraud. The SEC just as in previous cases, said it is seeking disgorgement of allegedly ill-gotten gains, prejudgment interest and financial penalties from the defendants.
Stmarket.co reported last week that the SEC also fined, Canadian blockchain entrepreneur Alex Tapscott for securities law violation.