Security & Fraud

Venezuelans Seek $30M In Crypto Ponzi Scheme Lawsuit

bitcoin with dice pyramid

A group of Venezuelan nationals filed a fraud suit in Florida federal court claiming they were duped into a Ponzi scheme involving cryptocurrency purportedly backed by diamonds.

Persuaded by the promise of sky-high returns, the plaintiffs accuse Eagle Financial Diamond Group Inc. and cryptocurrency venture Argyle Coin of making bogus claims, Law360 reports.

The seven Venezuelans said they were amateur investors and misled with lofty promises by Canadian investment radio host Harold Seigel, his son Jonathan Seigel and his partner Jose Angel Aman. The investors say they never received any documentation showing where their money actually went nor could they access their digital wallets said to be full of Argyle Coins, the report says.

The defendants were reportedly running two diamond companies — Natural Diamonds and Eagle Financial — as well as Argyle Coins. Instead of being invested, the collected funds were allegedly used to pay back earlier investors.

“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 civil complaint says.

A Securities and Exchange Commission (SEC) civil enforcement action unsealed in May accused the Seigels and Aman of luring people with fraudulent assurances of ambitious short-term profits in a Ponzi scheme that allegedly dated to 2014.

“[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 SEC complaint said.

A lawyer speaking on behalf the Seigels at the time said they denied any wrongdoing or participation in the alleged scheme.

Of the 90 cryptocurrency cases pursued by the SEC, regulators have only tracked down $36 million for investors. The investigations are aimed at stopping illegal initial coin offerings (ICOs), Ponzi schemes and pump-and-dump scams.

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