Report: Alleged Arcadia-based ‘Gemcoin’ scam garnered more than $164 million in bogus investments

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A massive Arcadia-based suspected pyramid scheme revolving around a fraudulent, precious stone-backed digital currency called “Gemcoin” has grown five-fold in scope since federal authorities filed their allegations last year, now encompassing $164 in alleged fraud, according to court documents.
The U.S. Securities and Exchange Commission filed a federal lawsuit in October alleging Steven Chen and his company, U.S. Fine Investment Arts Inc., and their affiliates promised investors a sound investment in Gemcoin, which USFIA claimed was a burgeoning digital currency backed by precious gem reserves and amber mines. But officials, and investors, allege the claims were bogus, and the so-called investment amounted to nothing more than a “worldwide pyramid scheme” of epic proportions targeting primarily Chinese investors.
Investigators initially linked Gemcoin to $32 million in fraudulent investments. Authorities seized USFIA’s assets and the court appointed a receiver, Thomas Seaman, to oversee the seized assets.
“To date, the accounting indicates the Receivership Entities received funds from external sources in the approximate amount of $164 million,” Seaman wrote in his 3rd report, filed July 7 in federal court. “The accounting is ongoing and the Receiver’s goal for completion is September 30, 2016,” he continued. The amount will likely increase as the accounting process continues, he added.
Furthermore, the report found no source of income, other than the alleged scheme.

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