Jose Angel Aman, co-founder of Argyle Coin, which was purportedly in the business of developing a cryptocurrency token backed by diamonds was sentenced to 7 years in federal prison on Wednesday.
In a statement, the U.S. Department of Justice (DOJ) says Aman and his partners solicited people throughout the United States and Canada to invest in diamond contracts. Aman and his partners promised investors that they would use the money to purchase rough colored diamonds for Aman to cut, polish and resell at a profit. 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, occurred between May 2014 and 2019.
The investor’s funds were not used for their intended purposes and Aman lied about the high-value diamond inventory, prosecutors said. To hide the scam, Aman allegedly paid interest to existing investors with money from new victims.
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”.
Aman and his partners collected over $25 million from hundreds of investors, according to the DOJ report.
Read more:
- How Does The Man Buy Bitcoin At $ 900 And Now The Price Is Over $ 19,000 Now?
- Analysts Remain Long-Term Bullish On Bitcoin Price As Institutional Players Continue To Enter The Space