A group of seven Venezuelan nationals has filed a lawsuit against a $30 million crypto Ponzi scheme in a Florida Federal Court.
According to a Law360 report, the lawsuit was filed against two companies – Natural Diamond and Eagle Financial Diamond – along with an associated crypto company – Argyle Coin. The scheme promised massive return-on-investment for the diamond-backed cryptocurrency.
The plaintiffs accused Canadian investment radio host Harold Seigel, his son Jonathan Seigel and his partner Jose Angel Aman for misleading investors by promoting the shady digital currency. Aman is the principle of Argyle Coin.
“[Eagle Financial] and its principals overstated their experience in the diamond and jewelry businesses to lure investors into trusting [Eagle Financial] and its principals with their investment,” the court document stated.
Huobi DM Launches Real-Time Settlement for BTC FuturesGo to article >>
According to the lawsuit, the company did not provide any documentation to the plaintiffs mentioning the allocations of their investments. They also did not have access to the crypto wallet where their Argyle Coins were stored.
“The plaintiffs bring this lawsuit to get back not only their initial investment money, but also their owed interest on their invested funds, as per their contracts, and their owed attorneys’ fees and costs incurred in bringing forth this action,” the complaint noted.
The scheme reportedly defrauded over 300 investors and is operating as a classic Ponzi scheme – paying off old investors with new investors’ money.
Banned by the SEC
The scheme involving Argyle Coin was also flagged by the Securities and Exchange Commission (SEC) in May for being a Ponzi scheme.
“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,” the watchdog agency explained.