LOS ANGELES (AP) — A Southern California man who bilked investors worldwide out of $147 million in a pyramid scheme was sentenced Monday to 10 years in federal prison.
Steve Chen, 63, of the Los Angeles-area suburb of Bradbury, was sentenced by U.S. District Judge John F. Walter, who said Chen's “litany of lies" promoted a scam of “epic proportions," according to a statement from the U.S. attorney's office.
Chen owned U.S. Fine Investment Arts, Inc. Between 2013 and 2015. The firm sold fake investments, “points" for shares when the company went public and a phony digital currency called “Gem Coins" that it claimed were backed by non-existent mines for amber and other gemstones in the U.S., the Dominican Republic, Argentina and Mexico, prosecutors said.
Some 72,000 victims invested. In the style of a classic pyramid scheme, some money was used to repay early investors but most lost their money to Chen, authorities said.
“The company did not generate any significant revenue from its business operations, apart from sales of investment packages to victim-investors,” the U.S. attorney’s office said.
Chen pleaded guilty last summer to one count of conspiracy to commit wire fraud and one count of tax evasion. He was ordered to repay nearly $1.9 million to the Internal Revenue Service and a July court hearing was scheduled to decide how much he must repay investors.
Leonard Johnson, 54, of Huntington Beach, who worked with Chen, pleaded guilty in 2019 to tax evasion and making a false statement on an immigration document. He awaits sentencing.