SEC Pulls the Plug on Diamond-Related Cryptocurrency Scam

in 2015, Aman and the Seigels launched a similar second unregistered security offering in another company, Eagle Financial Diamond Group Inc.

A search of Florida state’s Division of Corporation website also shows “Jose A Aman” as the officer of Falcon Financial Diamond Group Inc., Fancy Diamonds Private Investments LLC, H. Seigel Fine Auctions Inc., and Natural Diamonds Investment Co., though these were not listed in the SEC complaint.

“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,” Eric I. Bustillo, director of the SEC’s Miami Regional Office, said in a statement.

Argyle Coin did not have diamonds to back up investors’ money, according to court documents. Aman allegedly pawned dozens of diamonds and pocketed proceeds of more than $750,000.

Natural Diamonds, Eagle, Argyle Coin, Aman and the Seigels have been charged with violations of the securities registration provisions.

Aman and his companies are facing an additional charge of violating the anti-fraud provisions of the federal securities laws.

The SEC is seeking to levy financial penalties as well as repayment of “ill-gotten gains and prejudgment interest”.

The accounts of Natural Diamonds, Eagle and Argyle Coin had a combined negative balance of about $120,000 as of March 31, as per court documents.
The SEC has been cracking down on fraudulent cryptocurrency companies, looking to protect consumers as the process of codifying regulations drags on.

“As with any other type of potential investment, if a promoter guarantees returns, if an opportunity sounds too good to be true, or if you are pressured to act quickly, please exercise extreme caution and be aware of the risk that your investment may be lost,” cautioned SEC Chairman Jay Clayton in the regulator’s formal statement on cryptocurrency.

The SEC isn’t the first to accuse to Aman and his associates of fraud.

A case was filed in the Palm Beach County Circuit Court earlier this month by investors Don and Ann Geddes.

Harold Seigel advised the couple to invest $200,000 in a 50-carat parcel of pink rough diamonds said to be owned by Eagle Financial, estimated to be worth $8.5 million, according to court documents.

The Geddes were allegedly told that their investment was guaranteed by International Insurance NV, an off-shore company based in Curacao.

When it was time for the Geddes to get their money, Seigel reportedly convinced them to invest their return into Argyle Coin.

“Harold Seigel and Argyle Coin represented that the Geddes would receive ‘argyle coins’ with a value of $10 per coin when they knew that the argyle coins had zero value and/or did not exist,” court documents state.

There are a number of similar lawsuits filed in Palm Beach County Circuit Court, including a suit filed by the Rounds, longtime listeners of Seigel’s show who once trusted his counsel but are now suing for the return of about $2 million, the Palm Beach Daily News reports.

In a statement emailed to National Jeweler, attorney Kevin O’Reilly, who is representing Aman and the Seigels, said: “Jose Aman, Natural and Eagle have been cooperating with the corporate monitor appointed in the Rounds case. Further, they intend to fully cooperate with the SEC to get this matter resolved amicably.”

The Florida Office of Financial Regulation will be assisting the SEC with this case, spokesperson Jamie Mongiovi said.