SourcingApr 18, 2024
Diamond Trade Remains Cautious Amid Economic UncertaintyDe Beers’ rough diamond sales were down 18 percent year-over-year in its latest round of sales.
CrimeJan 13, 2021
CA Man Sentenced in $147M Mining, Digital Currency Scam
Steven Chen got 10 years in prison for his role in a scheme to solicit money from investors using a fake digital currency backed by gemstones mined from non-existent sites.
Los Angeles—A California man has been sentenced to a decade in prison for his role in a scheme to cheat investors out of millions using a fake digital currency backed by gemstones.
The U.S. Attorney’s Office for the Central District of California announced Monday that 63-year-old Steven Chen of Bradbury, California pleaded guilty in June 2020 to one count of conspiracy to commit wire fraud and one count of tax evasion.
Chen was the owner and CEO of a company called U.S. Fine Investment Arts (USFIA), as well as six other companies that used the same address.
The attorney’s office said from July 2013 to September 2015, Chen, or “Boss” as he was also known, solicited investments in USFIA, ultimately obtaining about $147 million from 72,000 victims in what the office has called “one of the largest pyramid schemes ever prosecuted in [that] district.”
He falsely promoted USFIA as a successful multi-level marketing company that extracted amber and other gemstones from non-existent mines the company claimed to own in the United States, Dominican Republic, Argentina and Mexico.
Chen promoted his scam, prosecutors said, through a scheme in which compensation for recruiting other investors came primarily from new USFIA investor payments.
The investors were duped into buying investment “packages” ranging in price between $1,000 and $30,000, with each package supposedly comprised of amber and other gemstones as well as USFIA “points,” which could be converted into shares in the company when it went public.
Chen, however, never intended for the business to go public, the attorney’s office said.
USFIA also offered other bonuses, like cash, travel, luxury cars and homes, to investors who recruited others.
Starting in September 2014, Chen and others changed the promotion by offering “Gem Coins” instead of points.
They falsely ensured the coins were a legitimate digital currency backed by the company’s gemstone holdings. Chen also lied about the coins already being in wide circulation in the jewelry and finance industries.
According to prosecutors, USFIA did not generate any “significant revenue” from its business operations, apart from selling the investment packages.
It also said the amber and other gemstones provided in the packages—which Chen and his associates claimed they were mining—were bought from domestic and international suppliers and given “grossly inflated” prices.
And the “Gem Coins” were not circulated in any industry, weren’t accepted by any merchants and, essentially, have no economic value.
The
attorney’s office said Chen also committed tax evasion when he reported his gross income in 2014 as $138,015, when it was actually was about $4.8 million, for which he owes nearly $1.9 million before interest and penalties.
U.S. District Judge John F. Walter, who handled Chen’s sentencing, ordered him to pay $1.9 million in restitution to the IRS and the judge scheduled a July 16 restitution hearing for USFIA investors who were victimized in the scheme.
Meanwhile, 54-year-old Leonard Stacy Johnson of Huntington Beach, California, whom prosecutors say helped promote USFIA and Gem Coins under Chen’s direction, pleaded guilty in July 2019 to one count of tax evasion and one count of making a false statement on an immigration document.
Johnson’s sentencing is scheduled for May 24.
U.S. District Judge John F. Walter, who handled Chen’s sentencing, ordered him to pay $1.9 million in restitution to the IRS and the judge scheduled a July 16 restitution hearing for USFIA investors who were victimized in the scheme.
Meanwhile, 54-year-old Leonard Stacy Johnson of Huntington Beach, California, whom prosecutors say helped promote USFIA and Gem Coins under Chen’s direction, pleaded guilty in July 2019 to one count of tax evasion and one count of making a false statement on an immigration document.
Johnson’s sentencing is scheduled for May 24.
More on Crime
The Latest
Supplier BulletinApr 18, 2024
Discover History’s Hidden Gems at the Las Vegas Antique Jewelry & Watch ShowSponsored by the Las Vegas Antique Jewelry & Watch Show
WatchesApr 18, 2024
Watch E-tailer Collectability Hires Kelly YochThe Patek Philippe expert will serve as personal curator for the brand-focused company.
Brought to you by
The Blueprint for Success in Scalable, Personalized Jewelry RetailWith Ho Brothers, you can unlock your brand's true potential and offer customers the personalized jewelry experiences they desire.
WatchesApr 18, 2024
TAG Heuer Opens Its Largest Standalone Boutique at SeaThe 553-square-foot shop is aboard the Carnival Jubilee cruise ship.
Weekly QuizApr 11, 2024
This Week’s QuizTest your jewelry news knowledge with this seven-question quiz.
Policies & IssuesApr 17, 2024
NDC Prevails in U.K. Case Over Lab-Grown Diamond AdvertisingNDC filed a complaint against Skydiamond for use of phrases like “diamonds made entirely from the sky.”
Events & AwardsApr 17, 2024
And the 2024 Winner of the Shipley Award Is … John Carter received the AGS’s highest honor Tuesday afternoon at Conclave in Austin, Texas.
Brought to you by
How Jewelers of America Represents Your BusinessFor over 30 years, JA has advocated for the industry, fought against harmful legislation and backed measures that help jewelry businesses.
FinancialsApr 17, 2024
LVMH’s Q1 Jewelry Sales Fall 5%LVMH said the company performed well despite an uncertain geopolitical and economic environment.
MajorsApr 17, 2024
Stuller’s B&D Opens New HeadquartersB&D Sales and Service held a ribbon-cutting event for its new location in Cranston, Rhode Island.
CollectionsApr 16, 2024
Akaila Reid Launches ‘Eat Cake’ CollectionIt’s ultra-feminine and filled with gold, pearls, and soft pastels.
MajorsApr 16, 2024
Loudr Adds 2 DirectorsEmily Highet Morgan and Emily Bennett have joined the agency’s team.
MajorsApr 16, 2024
Stuller Releases First Lab-Grown Diamond Jewelry CatalogIts updated book for mountings is also now available.
SourcingApr 16, 2024
Karen Rentmeesters Takes Over as Interim CEO of AWDCShe has been with the organization since 2010, most recently serving as its chief officer of PR and industry relations.
TechnologyApr 15, 2024
Judge Rules Jeweler’s Lawsuit Against PNC Bank Can Move ForwardJoyce’s Jewelry sued the bank after cybercriminals drained its accounts of nearly $1.6 million through a series of wire transfers.
IndependentsApr 15, 2024
Alfred W. DeScenza of DeScenza Diamonds Dies at 95He is remembered by loved ones for his loyalty, integrity, and kindness.
AuctionsApr 15, 2024
Madeleine K. Albright Jewelry, Pins Coming to AuctionHosted by Freeman’s | Hindman, the sale will take place May 7-8.
AuctionsApr 15, 2024
All of Sotheby’s ‘Rough Diamonds’ Sold in Less Than an HourThe auction house said all 24 timepieces offered in its underground sale of rare and avant-garde watches quickly found buyers.
Events & AwardsApr 15, 2024
10 Can’t-Miss Sessions at AGS Conclave 2024From lab-grown diamonds and AI to the inevitable Taylor Swift mention, here are some of Conclave’s most intriguing educational offerings.
Recorded WebinarsApr 12, 2024
Watch: What Jewelers Need to Know About InsuranceFrom cybersecurity liability to trade show coverage, insurance experts share tips on how to build the right policy.
CollectionsApr 12, 2024
Piece of the Week: Lionheart’s Evil Eye Gemstone CharmThe charm is a modern rendition of the evil eye amulet that has been worn for thousands of years.
Events & AwardsApr 12, 2024
The Jewelry Symposium Announces 4 Scholarship WinnersAhead of its trade show next month, TJS awarded free registration and accommodations to one jewelry professional and three students.
Policies & IssuesApr 11, 2024
SRK Exports’ Journey Toward Net Zero Impact By the end of this year, SRK’s diamond manufacturing complexes will achieve net zero emissions, one of an impressive array of achievements.
Lab-GrownApr 11, 2024
AGTA Bans Lab-Grown Diamonds, Gemstones at GemFairMembers can still sell lab-grown stones, it said, but only natural gems are allowed on the show floor.
IndependentsApr 11, 2024
Steven Rosdal, Co-Founder of Hyde Park Jewelers, Dies at 77He is remembered for his charisma, passion, integrity, kindness, and wit.
MajorsApr 11, 2024
Macy’s Opens Books for Possible BuyoutThe retailer also appointed two new board members, avoiding a proxy fight from a potential buyer.
CollectionsApr 10, 2024
Sylvie Launches New Nature-Inspired Collection, ‘Tulira’The bridal collection consists of 35 engagement rings and seven wedding bands.
