The Securities and Exchange Commission said Tuesday it had halted a $30 million South Florida Ponzi scheme that involved “fancy colored diamonds.”
Jose Angel Aman of Wellington, Fla., and his company, Argyle Coin, a purported cryptocurrency business, have been charged by the SEC with targeting more than 300 investors in the United States and Canada. The agency obtained a court order on Monday halting the scheme and freezing the assets of Aman and Argyle Coin. The court also appointed a receiver over Argyle Coin.
The SEC's complaint alleges that Aman operated Argyle Coin as a Ponzi scheme, using new investors’ funds to pay earlier investors their purported returns. It is alleged the fraud is a continuation of a scheme Aman orchestrated with two other companies he owns, Natural Diamonds Investment Co. and Eagle Financial Diamond Group, both based in Palm Beach.
According to the complaint, Aman engaged in unregistered offerings of securities in Natural Diamonds and Eagle as early as May 2014, falsely promising investors that the companies would invest in whole diamonds to cut down and sell for huge profits. Aman was assisted by Harold Seigel of West Palm Beach and Jonathan H. Seigel of Parkland, both of whom also have interests in Natural Diamonds and Eagle, the complaint said.
According to the SEC, Aman perpetrated the scheme by luring investors to invest in Argyle Coin, falsely claiming the investment was risk-free because it was backed by “fancy colored diamonds,” and promising to use investor funds to develop the cryptocurrency business.
Instead, Aman, Natural Diamonds, Eagle and Argyle Coin, allegedly misused or misappropriated more than $10 million of investor funds to pay other investors their purported returns. Aman also used some of the money for personal expenses, including rent on his home, purchases of horses and riding lessons for his son, the SEC said.
According to the complaint, “the well began to run dry in early 2015 at Argyle.” At that point, “Eagle, Aman and the Seigels started a second unregistered offering in the form of investment contracts in Eagle. They made the same false representations about the use of investors' funds and fueled the Ponzi scheme by using Eagle investors' funds to pay Natural Diamonds and Eagle investors their purported investment returns.”
"As alleged, Aman operated a complicated web of fraudulent companies in an effort to continually loot retail investors and perpetuate the Ponzi schemes as well as divert money to himself," said Eric I. Bustillo, director of the SEC’s Miami regional office.
The SEC's complaint charges Natural Diamonds, Eagle, Argyle Coin, Aman, Harold Seigel and Jonathan Seigel with selling securities without being registered with the agency and also charges Natural Diamonds, Eagle, Argyle Coin and Aman with violations of the antifraud provisions of the federal securities laws.
The SEC's complaint seeks disgorgement of allegedly ill-gotten gains and prejudgment interest from Natural Diamonds, Eagle, Argyle Coin, Aman and Harold Seigel, and financial penalties against Natural Diamonds, Eagle, Argyle Coin, Aman, Harold Seigel and Jonathan Seigel.