A federal district judge of South Florida has sentenced Jose Angel Aman to 84 months in prison for his involvement in a $25 million diamond Ponzi scheme. In addition, the judge also ordered Aman to pay more than $23 million in compensation to victims who invested in its diamond cutting business and so-called diamond-backed crypto tokens.
Fraudulent claims and promises
The US Department of Justice (DOJ) said in a statement that Oman and his unnamed partners persuaded them to “invest in diamond contracts” and successfully recruited hundreds of people. The statement added that the recruitment for citizens of the United States and Canada took place between May 2014 and 2019.
Victims who responded to the defendant’s plea were told that their money would be used to “purchase rough diamonds for Amman for cutting, polishing and resale for profit.” Nevertheless, in order to increase the attractiveness of the business, the Ministry of Justice claimed that Oman And his partners resorted to lies. DOJ statement explains:
They assure investors that their funds are safe because they are guaranteed by Aman’s diamond inventory (supposedly worth $25 million). Oman and his partners view this investment as a high-return, risk-free transaction.
The Ministry of Justice asserts that these promises and statements are wrong, because “Amman rarely uses investors’ money to buy, cut and resell rough diamonds.” In addition, Oman does not have $25 million in diamond inventory as he said.
Nevertheless, in order to cover up the fraud and thus maintain the Ponzi scheme, Oman “claimed that it paid interest to existing investors with the money of the new investment victim.” Next, the scammer and his partners convinced the early victims to Their investment is postponed. According to the U.S. Department of Justice, this “strategy is usually to spend time before Oman finds new investors and additional funds.”
Diamond-backed crypto tokens
However, when the Ponzi scheme was about to collapse, Oman changed its strategy by setting up a new company called Argyle Coin. The company will be engaged in “the business of developing cryptocurrency tokens backed by diamonds.” The US Department of Justice statement details how Oman’s new strategy also failed:
Aman recruited new investors from Argyle, promising high returns and no risk. Oman used only a small part of the money obtained from investors in Argyle to develop a cryptocurrency token. He used most of the money to pay interest to early investors and benefit himself and his partners.
The U.S. Department of Justice said that Oman used some investors’ funds to support “his luxurious lifestyle.”
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