A South Florida federal district judge has sentenced Jose Angel Aman to 84 months in prison for his role in perpetrating a $25 million diamond Ponzi scheme. In addition, the judge ordered Aman to pay over $23 million in restitution to victims who invested in his diamond cutting business and the purported diamond-backed crypto token.
Fraudulent Claims and Promises
In a statement, the U.S. Department of Justice (DOJ) says Aman and his unnamed partners successfully recruited hundreds of people after convincing them “to invest in diamond contracts.” The statement adds that the recruitment, which targeted American and Canadian citizens, occurred between May 2014 and 2019.
Victims responding to the accused’s solicitations were told their money would be used “to purchase rough coloured diamonds for Aman to cut, polish and resell at a profit.” Still, in order to bolster the appeal of the business, the DOJ alleges that Aman and his partners resorted to lies. The DOJ statement explains:
They reassured investors that their money was safe because it was secured by Aman’s inventory of diamonds (purportedly valued at $25 million). Aman and his partners presented the investment as a high return, no-risk deal.
The DOJ asserts that the promises and statements were false because “Aman rarely used investors’ money to purchase, cut, and resell rough diamonds.” In addition, Aman did not have a $25 million diamond inventory as he claimed.
Still, in order to conceal the fraud and therefore sustain the Ponzi scheme, Aman “made purported interest payments to existing investors with money from new investment victims.” Next, the scammer and his partners convinced the early victims to roll over their investments. According to the DOJ, this “tactic (was) used to buy time until Aman could locate new investors and additional money.”
The Diamond-Backed Crypto Token
However, when the Ponzi scheme was about to collapse, Aman changed his strategy by setting up a new company known as Argyle Coin. This company would be in “the business of developing a cryptocurrency token backed by diamonds.” Detailing how Aman’s new tactic also failed, the DOJ statement says:
Aman solicited new investors for Argyle, promising high rates of return with no risk. Aman used only a fraction of the money received from Argyle investors to develop a cryptocurrency token. He used most of it to pay purported interest payments to the earlier investors and to benefit himself and his partners.
The DOJ says Aman used some of the investors’ funds to support “his lavish lifestyle.”
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