A report reaching our desk is that the regulators are at it again. This time, SEC has set its fangs into Argyle Coin, which seem to be a Ponzi scheme. According to the commission, the scheme is worth $30 million and already targeting 300 investors. Also, the business involves a cryptocurrency which the owner’s claim uses diamonds as leverage.
SEC Clamps Down the Activities Of A Ponzi Scheme
At this point, all we know is that the company is operating as Argyle Coin LLC in Palm Beach, Fla. According to them, they are offering an opportunity for investors to buy crypto which leverages valuable diamonds. The U.S regulators have discovered that what the operators do is to use investors’ money to facilitate a Ponzi scheme. Also, we gathered that the brain behind the firm is Jose Angel Aman. That’s what the commission announced on Tuesday.
Apart from the Ponzi scheme, Aman has two companies operating as Eagle Financial Diamond Group Inc. and Natural Diamonds Investment Co. The regulators charged these two companies and also Jonathan and Harold Seigel who are co-conspirators in the Ponzi scheme.
On Monday, SEC secured the order of a Florida federal judge to restrain the companies from the operation. The order extended to temporary freezing of the defendant’s assets. Further, the court appointed Jeffrey Schneider to be the Argyle Coin receiver.
Mr. Aman’s lawyer Kevin O’Reilly has opened up to say that the defendant is cooperating with what the authorities want. He also stated that his client would cooperate until the parties reach an amicable resolution. However, Argyle Coin is yet to comment on this incident.
The Seigels Claim of Being Innocent
We don’t expect the Seigels to accept the accusation without complaints and it seems they are ready for it. According to them, SEC’s accusations are wrong. They have denied the allegations which the commission made against them. They state that they didn’t facilitate any Ponzi scheme and didn’t deceive their clients at all. The lawyer made this statement on behalf of Harold and Jonathan Seigel.
However, we have gathered that the firm started the Ponzi scheme five years ago. Mr. Aman offered investors the opportunity to make money from natural diamonds. He told the investors that once they invest, their funds will go into acquiring, cutting, polishing, and reselling of diamonds.
According to the SEC, the investors were to make a 24% profit and also get their principal in two years. However, Mr. Aman and cohort were using new investors’ money to pay for prior investors. This is a typical Ponzi scheme from what we know.
SEC mentioned that the Eagle Financial Diamond group also used the same speech to sell investments in 2015.
The Company Continued to Mislead People In 2017
The commission accused Mr. Aman of continuing his illegal activities in 2017. He created the Argyle Coin and also sold it to investors. He promised that he’s using their funds to develop a crypto business. Aman also mentioned that there would be no risks in the investment since the business will depend on diamonds.
Unfortunately, the company is not doing what it says. The defendant is using new investments to pay off old investments. Anyone who has been trading cryptocurrencies will tell you that the business is risky.
So, the commission is clear on their accusations. It has revealed that Mr. Aman has misused over $10 million of investor’s funds. As such, SEC is charging the three firms with violations of securities registration laws.