South Florida federal prosecutors have charged Jose Angel Aman, a 51-year old from Washington DC who has apparently committed wire fraud. The fraud he is accused of is for operating a fraudulent diamond investment scheme. According to the allegations from 2014, May through May last year, Aman and his partners had solicited people throughout the USA and Canada to invest in different diamond contracts. They promised the investors that they would use their money to purchase rough colored diamonds that would be cut, polished, and resold at humongous profits. They kept assuring the investors that their money was in safe hands as it was secured by their inventory of diamonds which is allegedly worth $25 million.
But as we know now, the promises were fake. According to whatever information has been sublet, Aman neither bought rough diamonds, nor he polished them to sell them off. There was also no inventory as claimed. He smartly gained the confidence of the investors by paying them regular interest from the new money infused by a new investor. The charging document shows that at the end of the investment period, the partners would convince their investors to roll over their money back claiming that investors had full value of the investments and that they could put it back to new deals. Fake reinvestment contracts were issued until Aman could find new investors and keep the cycle rolling.
Not just that, it also came out as an allegation that when the above scheme was to collapse, he set up a new business by the name Argyle Coin LLC which was stated to be in the business of developing cryptocurrency tokens backed by diamonds. He tried to get new investors for this concern. Only a fraction of money so got from Argyle investors was used to develop a cryptocurrency token, and the rest was used to pay interest payments to earlier investors as was in the document charging them of the crime.
While this Ponzi scheme was fast on its recourse, Aman and his partners had garnered more than $25 million from several hundreds of investors. He used the investment money to make the purported interest payment, to pay off business expenses, commissions, and to support his flamboyant lifestyle which he enjoys. His initial appearance was made this week before the U.S. Magistrate Judge Bruce Reinhart, who sits in West Palm Beach.
The matter was taken up by the FBI here with assistance from the Florida Office of Financial Regulation. Back in the month of May, the U.S. Securities and Exchange Commission had taken their move to stop the operations of Aman, Argyle coin, and such similar activities he was involved in over similar allegations.
According to the SEC complaint, Aman might have fleeced more than 300 investors since its inception by selling unregistered securities in his other two firms called Natural Diamonds Investment Co. (Natural Diamonds) and Eagle Financial Diamond Group Inc.