- According to USFIA’s ponzi and multi-level marketing scheme , the cryptocurrencies were backed by non-existent gems which were traded on the same platform
- During 2013-2015 he captured 70,000 investors located across the globe, ultimately resulting in a fraud case being registered against him
- He was held guilty of tax evasion and wire fraud conspiracy ensuing a minimum imprisonment of 10 years
- The court ordered him to pay a fine of $1,885,094 for tax evasion
The week’s opening day witnesses ten years of California Court’s sentence to Steve Chen, founder of GemCoin. He is accused in the case of defrauding many investors in the scam of investment schemes.
It is one of the biggest and earliest cryptocurrency investment schemes. The federal prison has sentenced him to 10 years.
About Chen and his business
63 Years old Chen accepted that he owned the U.S. Fine Investment Arts (USFIA) and peddled gem coins worth $147 million.
Many vulnerable investors got targeted with the advent of GemCoin along with the false promises of higher returns. GemCoin was established as one of the preliminary schemes in the crypto world.
After the final judgment, the judges scheduled one more restitution hearing to discuss the compensation for Chen’s victim investors as an entity.
Prosecutors have registered a case against Chen from the report of his mere annual income of $138,000,however, he actually had earned $4.8 million in the same year. The FBI Assistant Director said that Mr.Chen tried his level best to lure all the innocent investors globally by creating dynamic strategies of marketing cryptocurrency.
Moreover, in the year 2017 , Securities and Exchange Commission (SEC) settled a civil charge of a lawsuit worth $71 against Chen. The charges got approved when Chen admitted and pledged that he would liquidate the companies and return all ill-gained funds to the innocent investors who got fooled by him.
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