Venezuelan Investors File Lawsuit With US Court in Connection With $30M Crypto Fraud

A group of Venezuelans has filed a lawsuit with a Florida Federal Court in connection with a Ponzi scheme. The scheme purportedly involved $30 million in cryptocurrency promoted by Canadian investment radio host Harold Seigel.

Payment and commerce news outlet Pymnts.com reported today, July 16, that seven Venezuelans claim to have been lured into a $30 million worth digital currency Ponzi scheme conducted by companies such as Eagle Financial Diamond Group Inc. and Argyle Coin. The cryptocurrency involved into the fraud was reportedly pegged to diamonds.

The frauds allegedly used raised funds to pay back earlier investors

The plaintiffs accuse Canadian financial commentator Harold Seigel, his son Jonathan Seigel and his partner Jose Angel Aman — the principal behind Argyle Coin — of misleading with promises of huge returns on the investments.

The plaintiffs have reportedly never seen documentation indicating allocation of the invested funds, nor have they had access to their crypto wallets holding claimed Argyle Coins. The fraudulent investment scheme operators allegedly used the raised funds to pay back earlier investors. The complaint reportedly reads:

“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 U.S. SEC’s crackdown on the confirmed cryptocurrency Ponzi scheme

In late May, the United States Securities and Exchange Commission (SEC) halted the aforementioned crypto Ponzi scheme after it had taken funds worth $30 million, with Aman becoming subject to legal action in connection with the fraud. Eric I. Bustillo, director of the SEC’s Miami Regional Office, said at the time:

“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.”

That same month, the SEC initiated court proceedings against California resident Daniel Pacheco for allegedly operating a multimillion-dollar crypto pyramid scheme. The SEC accused Pacheco of conducting a fraudulent, unregistered offering of securities through two California-based companies, IPro Solutions LLC and IPro Network LLC, from January 2017 through March 2018.