He lured investors into acquiring USFIA investment packages worth between $1,000 and $30,000 each. The packages supposedly included amber and other gemstones as well as points, which are convertible to USFIA shares when the company launched its initial public offering (IPO). However, Chen had no intention for a public offering of his company.
He also convinced investors by offering other bonuses including cash, travel, luxury cars, homes in the Los Angeles area to investors who recruited other people to purchase these “packages.” He also offered EB-5 visas as bonuses for immigrant investors.
In September 2014, the GemCoin crypto scheme mastermind and his co-conspirators started changing their promotions. Instead of points, they promoted Gem Coins as a legitimate cryptocurrency purportedly backed by USFIA’s gemstone holdings. Chen falsely told consumers that the Gem Coins were widely circulated in the finance and jewelry industries.
In June 2020, Chen pleaded guilty to one count of conspiracy to commit wire fraud and one count of tax evasion. He declared a gross income of $138,015 for 2014 when his actual income was around $4,816,193 that year.
