A complaint filed in the Southern District of Florida by the Securities Exchange Commission has accused three South Florida men of perpetrating a $30 million Ponzi scheme said to have claimed more than 300 investors as victims.

According to court documents unsealed on Monday, the federal agency is alleging Miami resident Angel Aman and co-defendants Jonathan Seigel and Harold Seigel unlawfully misled lenders regarding investments into their purported diamond vendors Natural Diamonds Investment Co. and Eagle Financial Diamond Group Inc. The SEC is alleging the trio similarly deceived investors into contributing funds into a cryptocurrency venture, Argyle Coin.

The complaint said from May 2014 through December 2018, the defendants “engaged in the unregistered offering of securities in the form of investment contracts in Natural Diamonds,” and later Eagle.

“They told prospective investors that Natural Diamonds would use investor funds to acquire raw colored diamonds known as “fancy colored diamonds,” which they would then cut, polish, and resell for profits that would result in investment returns of 24% and the full return of investors' principal within two years,” the complaint said. “ln reality, Natural Diamonds was a Ponzi scheme. Aman and Natural Diamonds used investor funds to pay prior investors their purported returns.”

The SEC's suit contends the “fancy colored diamonds” used by the defendants to attract investors to Natural Diamonds and Eagle were also used as a selling point for Argyle Coin. The enterprise allegedly touted itself as “offering the first investment in cryptocurrency backed by fancy colored diamonds.”

“They tell investors they will use investor funds to develop Argyle Coin's cryptocurrency business, and the investment is risk-free because investors' principal is protected by valuable diamonds,” the complaint said. “This is false. ln truth, Aman has been using Argyle Coin investor funds to continue the Ponzi scheme by using Argyle Coin investor funds to pay Natural Diamonds and Eagle investors their purported investment returns. As for the valuable diamonds that purportedly protect investors' money, Argyle Coin has none.”

Read the complaint: 

The lawsuit asserted Natural Diamonds, Eagle and Argyle Coin collectively brought in more than $30 million from investors, and as of March 31, had “a combined negative balance of about $120,000.” A press release shared by the SEC on Tuesday said Aman used his allegedly ill-gotten gains for personal expenses, including horseback riding lessons for his adult son.

“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 Bustillo, director of the SEC's Miami regional office, said in the release. “The SEC's diligent investigative work uncovered the Ponzi schemes and our goal is to bring justice to the harmed investors.”

The Coral Springs attorney representing the Siegels, solo practitioner Ellen Kaplan, told the Daily Business Review, “I have every confidence that my clients will be vindicated.”

“[The Seigels] vehemently deny the allegations lodged against them and refute any contention they participated in a Ponzi scheme or otherwise misled their friends, family and long standing clients in any way,” she said. “Mr. Harold Seigel has a long-standing, sound and trustworthy reputation in both the diamond and gold industries and has been interviewed by Bloomberg, and others, in the past for his expertise.”

Kaplan said corporate monitors have been appointed to oversee the defendants' companies. She added, ”My clients will continue to cooperate with the corporate monitor and the SEC in their efforts to clear their name and otherwise help account for and protect the assets of their clients.”

An SEC motion for notice of a related case made mention that two of the companies at the center of the alleged scheme, Natural Diamonds and Eagle, have also been named as defendants in Round v. Natural Diamonds Investment Co., a case pending before U.S. District Judge Donald Middlebrooks. Chicago-based attorney Kevin O'Reilly said his clients “Jose Aman, Natural and Eagle have been cooperating with the corporate monitor investigation in the Rounds Matter.” The lawyer, who is also representing Argyle Coin, added, “They will continue to cooperate with the SEC to get these matters resolved amicably.”

On May 14, U.S. District Judge Judge Robin Rosenberg granted the SEC's emergency motion for a temporary restraining order and temporary asset freeze against the defendants. The respondents have been ordered to appear before the court for a show cause hearing on Thursday to argue against a preliminary injunction requested by the agency.

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