Gemcoin founder Steve Chen appeared in court and pleaded guilty to charges of conspiracy to commit wire fraud charges and tax evasion. He and other perpetrators duped some 70,000 unsuspecting individuals out of a cool $147 million to invest in USFIA.

Californian resident Steve Chen, aged 62, the architect behind the Gemcoin scam has pled guilty in his ongoing prosecution. He was facing charges of tax evasion and Conspiracy to commit wire fraud. Chen was the founder of Gemcoin.

Gemcoin was a Ponzi scheme hatched by the Gemcoin founder and his team between 2013 to 2015 before they were uncovered. They had conned some 70,000 individuals in an amount totaling up to $147million.

The perpetrators duped unsuspecting individuals with a multilevel marketing scheme whereby they misled them to invest in U.S. Fine Investment Arts (USFIA) where the investors would not only receive points but would later on be rewarded with virtual currency Gemcoin that could be traded on their platform according to an SEC report. The price of the coin was suppose to increase all depending on the sales of the Gemstones.

While in fact they were not truthful as the group were not operators of a single mine, nor were they owners of any either but instead purchased the gemstones from merchants selling the precious stones and then inflated the prices.

“The SEC’s complaint alleges that Chen and his companies misled investors about a lucrative initial public offering for USFIA that never happened and about claims to own or control amber deposits worth billions of dollars.”

The early investors were urged to invest amounts ranging from $1000 and $30000. They would in turn get more profits based on the number of other investors they brought into the fold which is a classic hallmark of a pyramid scheme.

Mr. Chen also understated his income where he reported $138,000 in 2014 instead of the actual $4.8 million he took from the scheme that year.

Mr. Chen acknowledged that he will have to pay $1,885,094 in tax returns for 2014 as well as fines with interests accrued. He has also been court ordered to refund all the victims of the scheme.

He is also facing a possible jail term of up to 10 years and a fine of not less than $500,000.

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