Scam Alert: The Brain Behind 147 Million Dollar Crypto Scam Sentenced to 10 Years in US Prison

By: Mike Williams

January 14, 2021 1:02 PM

The U.S Department of Justice (DOJ) has sentenced the mastermind behind the $147M scam, defrauding over 72K investors in the process.

Steve chen who duped investors with his crypto scheme collecting $147M has been sentenced to 10 years in prison and sanctioned to pay a fine of $1.8M to the U.S Internal Revenue Service (IRS) for evading tax.

U.S. Department of Justice announced on 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. Judge John Walter called Chen’s scheme a scam of “epic proportions.”

The DOJ explained that 63-year-old Steve Chen conducted “a massive investment scam where an international company issued a fake 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 tax evasion.

From September 2014, Chen and others substituted points for “Gem Coins,” which “had no circulation in any industry, were not accepted by any merchants, and had no economic value,” the DOJ continued, adding:

Chen was the owner and CEO of U.S. Fine Investment Arts Inc. (USFIA) along with six others. The DOJ documented that he fraudulently promoted and asked for investments from July 2013 until September 2015. He persuaded investors that USFIA was a successful MLM company that extracted amber and other gemstones from the mines it “owned” in Dominican Republic, Argentina, and Mexico and U.S.

However, in reality, the mines did not exist. The DOJ added:
They falsely promoted these ‘coins’ as a legitimate digital currency backed by the company’s gemstone holdings. Chen also falsely represented that these ‘coins’ already were in wide circulation in the jewelry and finance.

In  addition, Chen, therefore, owed the U.S. Internal Revenue Service (IRS) $1,885,094 – before interest and penalties. The DOJ notice concludes:

Judge Walter ordered Chen to pay restitution of $1,885,094 to the IRS on the tax evasion as well.