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. He is also ordered to pay the U.S. Internal Revenue Service more than $1.8 million for tax evasion.
Scam Involving Fake Cryptocurrency
The U.S. Department of Justice (DOJ) announced Monday that a California man, Steve Chen, has been sentenced to 10 years in federal prison for his “leading role” in a major crypto fraud case. Judge John Walter called Chen’s scheme a scam of “epic proportions.”
The DOJ explained that the 63-year-old conducted “a massive investment scam where a multinational company issued a phony digital currency purportedly backed by billions of dollars’ worth of amber and other gemstones.” Chen pleaded guilty in June last year to one count of conspiracy to commit wire fraud and one count of 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. He convinced investors that USFIA was a successful multi-level marketing company that extracted amber and other gemstones from the mines it “owned” in the U.S., the Dominican Republic, Argentina, and Mexico. However, in reality, the mines did not exist. The DOJ added:
He ultimately obtained approximately $147 million from 72,000 victims, in one of the largest pyramid schemes ever prosecuted in this district.
Investors were duped into buying USFIA “packages” purportedly comprised amber and other gemstones, as well as USFIA “points.” They were told that these points could be converted to USFIA shares when the company had its IPO, which never happened. The investments range from $1,000 to
