Fancy Colored Diamonds, Ponzi Cryptocurrency Biz, and A Whole Lot of Victims

May 21, 2019

In a Complaint filed in the United States District Court for the Southern District of Florida ("SDFL") on May 13, 2019,, the Securities and Exchange Commission ("SEC") sought to enjoin enjoin Natural Diamonds Investment Co.; Eagle, Financial Diamond Group lnc, a/k/a Diamante Atelier; and Argyle Coin, LLC.; Jose Angel Aman; Harold Seigel; and Jonathan H. Seigel from continuing to allegedly defraud investors. Also named in the Complaint were Relief Defendants H.S. Management Group LLC; Gold 7 of Miami, LLC; Winners Church International Inc. of West Palm Beach, Florida; Frederick D. Shipman; and Whitney Shipman. As announced in "SEC Obtains Emergency Order Halting Alleged Diamond-Related ICO Scheme Targeting Hundreds of Investors" (SEC Release), SDFL ordered the halt to what the federal regulator characterizes as an ongoing ongoing $30 million Ponzi scheme targeting over 300 investors in the U.S. and Canada. SDFL ordered a temporary restraining order and asset freeze against Defendants Aman and Argyle Coin, and against Relief Defendants; and appointed a Receiver over Defendant Argyle Coin. As set forth in part in the SEC Release

[A]man operated Argyle Coin as a Ponzi scheme -- it used new investor funds to pay prior investors their purported returns.  As alleged, this fraud is a continuation of a scheme Aman orchestrated with two other companies he owns, Natural Diamonds Investment Co. (Natural Diamonds) and Eagle Financial Diamond Group Inc (Eagle).  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 and Jonathan H. Seigel, who also have interests in Natural Diamonds and Eagle. According to the complaint, in October 2017, Aman and Jonathan H. Seigel continued 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, according to the complaint, Aman, Natural Diamonds, Eagle, and Argyle Coin, misused or misappropriated more than $10 million of investor funds to pay other investors their purported returns and for Aman's personal expenses, including rent on his home, purchases of horses, and riding lessons for his son.

Bill Singer's Comment:

You know, sometimes it's truly SOSDD -- same old shit different day. On Wall Street it tends to be SOS but different year or decade. Frankly, little changes when it comes to scams and investor rip-offs. Of course, to be fair, the SEC's Complaint merely contains allegations and the Defendants are presumed innocent unless and until found guilty in a court of law by a preponderance of the evidence. 

So . . . watta we got here in 2019? We got some folks hawking diamonds. Whole diamonds. Diamonds that will be cut down and then sold for profits -- actually, the Complaint alleges that the promise was 24% returns plus principal within two years. 

Y'all know what a diamond is, right? They're shiny. They're hard. You can handle them. 

Now, let's see how innovation and the drive the succeed come into play! We take the concept of diamonds and leverage that into an investment in a cryptocurrency business. Unlike diamonds, most of you don't know what cryptocurrency. But you're too insecure to admit it, so you pretend you do. When the pitch begins to use tech terms like blockchain, distributed ledger, and digital assets, you nod in agreement (even though you don't have a clue about what the hell they're talking about). Unlike diamonds, cryptocurrency ain't shiny. Unlike diamonds, cryptocurrency ain't hard. Unlike diamonds, cryptocurrency ain't something you can handle. Nonetheless, you bite down and then get reeled in hook, line, and sinker.

The con artist then go in for the kill. They tell you that your investment in this very, very hot crypto biz is backed -- backed they say! -- by "fancy colored diamonds." Wow. Fancy. Colored. Diamonds. Why that's as good as money in the bank but for the fact that it's not money but, you know, some dollar bills are sort of fancy with all the artwork and portraits and they do have colors on the paper.

Being the jackass that you are and not doing any due diligence, you fork over your hard-earned savings. If you read Paragraph 8 of the SEC Complaint,  you were likely stunned to learn that:

In addition to operating a multi-layer Ponzi scheme, Aman, Natural Diamonds, and Eagle used investors' funds to purchase horses and riding lessons for Aman's adult son, pay Aman's church and pastors more than $1.5 million, pay H. Seigel and his company more than $3 million, and pay more than $3 million to Aman directly or for his other personal expenditures, including shopping at Gucci and paying the rent on his home.