A new lawsuit filed this month has revealed more details about what happened with the “Argyle Coin” cryptocurrency.
According to the lawsuit, the entire project was nothing more than a desperate attempt to keep a previous Ponzi scheme alive and to reimburse investors who anxiously awaited their dividends.
The group of Venezuelans behind the lawsuit says they are among the 300 amateur investors who were trapped in the Ponzi scheme, in accordance with Law 360.
The alleged perpetrators of the scam, José Ángel Aman, Harold Seigel and his son Jonathan Seigel, ran two diamond trading companies, Natural Diamonds and Eagle Financial. The two companies were connected to Argyle Coin, a Ponzi cryptocurrency scheme that was said to be backed by diamonds.
Natural Diamonds is prior to Argyle Coin and seems to be the origin of the scam. Reportedly, the firm attracted investors to invest money in their operations by exaggerating their experience in the diamond industry.
Since 2014, Aman promised investors a 24% return on their investment in two years through their company Natural Diamonds, with no idea how they would keep their promises. By 2015, Aman was working with his two accomplices, selling fraudulent investment contracts through Eagle Financial, and using those funds to pay previous investors.
According to court documents:
“EAGLE FINANCIAL AND ITS DIRECTORS EXAGGERATED THEIR EXPERIENCE IN THE DIAMOND AND JEWELRY BUSINESS TO ATTRACT INVESTORS TO TRUST EAGLE FINANCIAL AND ITS DIRECTORS WITH THEIR INVESTMENT.”
The lawsuit suggests that the scammers used all the investments they received to pay their previous clients and never did anything with the money they would get a refund. Even so, the defendants in the case continued to lie to investors and promise unrealistic returns to their investors.
Then, things got even worse when the men behind the plan decided to develop a cryptocurrency project to raise funds .
They made very similar promises with Argyle Coin, and they apparently told investors that putting their money in their diamond-backed cryptocurrency was a “risk-free” company, while once again using that money to support other investors.
Unfortunately, investors were left out when the project never materialized, and the Ponzi scheme fell apart. This is just the last of more than a dozen lawsuits against the failed crypto project.