California man Steve Chen, the mastermind of what the U.S. Department of Justice calls a scam of “epic proportions” has been sentenced to 10 years in prison. His crypto scheme collected over $147 million, duping 72,000 investors in the process.
Chen pleaded guilty last June to one count of conspiracy to commit wire fraud and one count of tax evasion. He has been ordered to pay the U.S. Internal Revenue Service more than $1.8 million for tax evasion.
Chen was the owner and CEO of U.S. Fine Investment Arts Inc. (USFIA) and six other companies. The DOJ detailed that he fraudulently promoted and solicited investments from July 2013 until September 2015.
Chen convinced investors that USFIA was a successful multi-level marketing company that extracted amber and other gemstones from the nonexistent mines it “owned” in the U.S., the Dominican Republic, Argentina and Mexico.
Investors were tricked into buying USFIA “packages” comprised of amber and other gemstones, as well as USFIA “points.” They were told these points could be converted to USFIA shares when the company had its IPO, which never happened.
Then beginning in September 2014, Chen and others substituted points for “Gem Coins,” which “had no circulation in any industry and were not accepted by any merchants.
They falsely promoted these ‘coins’ as a legitimate digital currency backed by the company’s gemstone holdings. Chen also falsely stated the ‘coins’ were in wide circulation in the jewelry and finance industries.
Founded in 2015, Coinchapter.com has become one of the leading resources for the crypto asset community. Created by a small group of cryptocurrency enthusiasts, Coinchapter.com was built to provide new members of the crypto asset community with unbiased listings of cryptocurrency exchanges and retail options that would allow them to buy the crypto assets that they wanted, how they wanted and at the price they wanted.