usfia-logoWhereas our recently published BehindMLM review of USFIA primarily concentrated on their business model, in this article we take a deeper look into the origins of the scheme, what management have been up to and what’s been going on with USFIA outside of the US.

There’s a lot of information to get through (sourced from readers and my own research), so let’s get right into it.Our journey deeper into USFIA begins with a closer look at the origins of the scheme itself.

We’d previously covered suggestions that USFIA originated out of China, with a news report claiming USFIA had been busted twice before.

Things in China apparently began to heat up following a bust in Thailand last year.

Following a complaint filed in Changde, China back in May 2014, Chinese regulators began to investigate “American Continental Mining Industries” (commonly shortened to just “American Mining”).

American Continental Mining Industries also claimed to source ROIs from the sale of amber, however

after a long time, there was no returns, and realized he had been scammed.

The Changde Ministry of State Securities headed up the investigation, who concluded that American Continental Mining Industries was indeed a resurrection of the long-running amber-based scam.

This (criminal) organization claimed to be started by a “China US Political Consultive Promotional Committee” and holds a Chinese “direct sales” license, and engaged in pyramid sales activities in Shandong, Liaoning, Zhejiang, Guangdong, Guangxi, Yunnan, Henan, Hunan, and various provinces, and many times using the name “American Continental Mining Industries” to hold several promotional meetings in China.

“China US Policial Consultive Promotional Committee” now goes by “US China Consultation Association”, who today USFIA claim they are owned by.

Changde MinSec estimated that as of June 2014, American Continental Mining Industries had sucked in over 80,000 victims to the tune of 1 billion RMB ($161 million USD).

Learning of their imminent arrest, two leaders referred to as Mr. Chen and Mr. Lu fled China.

Twenty two other individuals connected to the scheme were arrested, but with Chen and Lu on the run it persisted.

American Continental Mining Industries was renamed to “American Continental Amber”, with operations continuing in China but managed offshore.

Continuing to investigate the scam, Changda police became aware of an American Continental Amber event scheduled to take place in Thailand on October 29th.

Working with Thai police, the event was raided and Mr. Chen and Mr. Lu were arrested and extradited back to China.

I’m not sure if this is the same Steve Chan of USFIA fame, as I’ve seen his name spelt both ways.

In any event, those arrests in Thailand finally saw the end of American Continental Mining Industries operations in China. Shortly after however, those who escaped arrest in China, relaunched the scheme in the US.

Primarily targeting the Chinese-American community, ads began appearing in local community papers touting an investment opportunity with “American Investment Alliance Group”.

That’s the literal translation of the Chinese name, with the scheme’s formal English name being “Alliance Financial Group”.

Alliance Financial Group, headed up by Steve Chan, then launched USFIA, which was advertised in Chinese as “American Regal Currency Fund”.

Today the Chinese-language of the USFIA website still uses “American Regal Currency Fund” to refer to the scheme, and claims it is owned by “US China Consultation Association” (the same company behind American Continental Mining Industries and American Continental Amber in China).

Does your head hurt yet?

Breaking all of this down in as simple a timeline as possible, mid last year USFIA’s predecessor scam fell apart in China. They tried to keep going with what was left of management by holding an event in Thailand, which failed.

Management who weren’t arrested then relocated to the US, whereupon they relaunched their scheme with new names and targeted the Chinese-American community.

Being primarily promoted in Chinese and having so many name-changes and diversionary shell companies involved (Steve Chan is connected to eleven known companies alone), USFIA has up until recently managed to fly under the radar.

Through these shell companies, there’s evidence of Chan laundering USFIA funds into golf courses and who knows what else. Not unlike what we saw Phil Ming Xu do with stolen WCM777 investor funds.

My take is Steve Chan (who probably isn’t working alone) somehow avoided Chinese regulators, and with his US China Consultation Association have been running this amber scam for some time now.

The current status of USFIA as a Ponzi scheme is unclear.

A recent Chinese news report (June 26th) suggests the scheme is not paying out its members, with those scammed planning legal action against the company.

Members are urged Chinese shipping company, paid out, if the company still refuses delivery date specified, will seek legal means to prosecute.

As I understand it the current price of GemCoins is 24 cents a point (they are/were sold to initial Chinese investors for 5 cents a point), however investors are only able to sell 10% of their balances.

At least on paper, with it looking like USFIA are currently not honoring withdrawal requests (might be selective payments).

There’s also talk of USFIA operating a fraudulent immigration scheme, somehow attached to their GemCoin investment opportunity. That too appears to have or be in the process of collapsing:

Chinese members requested withdrawal, the growing store of money refund request, people some investment immigration to the United States seeks a refund.

All signs are pointing to your typical Ponzi points collapse, which is likely due to a limited pool of Chinese-American investors and USFIA’s history in China.

I believe that’s behind the recent push to attract English-speaking investors, which has led to USFIA popping up on our radar.

If indeed withdrawals are frozen or being paid out selectively, it probably won’t be long before enough complaints are filed to trigger a regulatory investigation in the US. And given USFIA’s past in China, that’s not likely to end well.

Regulators in Spain have already cottoned on to the scheme, with the Comisión Nacional del Mercado de Valores issuing a warning just last month:

The Comisión Nacional del Mercado de Valores (CNMV) warns (about the) company USFIA INC .

CNMV (records) show that the Company is not registered in the corresponding records of this Commission and, therefore, it is not authorized to provide investment services.

Spain appears to be a potential emerging source of new investors for USFIA, with Alexa currently estimating Spain generates around 10% of traffic to the USFIA website domain.

Meanwhile there’s also a chance  that Steve Chan and the gang might look to reboot the scheme yet again, with the GemCoin Ponzi points renamed to “WealthCoins”.

Back in April a trademark application for WealthCoin was submitted by Quail Ranch Gold Course LLC, which is owned by Steve Chan.

The reason for the request reads identical to the failed trademark application for GemCoin:

Currency exchange services; Currency trading; Currency transfer services; Financial services, namely, providing a virtual currency for use by members of an on-line community via a global computer network; Financial services, namely, providing electronic transfer of a virtual currency for use by members of an on-line community via a global computer network; On-line real-time currency trading.

A decision on the application has yet to be made.

Looking forward we’ll try to keep you updated on what’s happening (not easy given most information concerning USFIA is in Chinese). And for those looking to do their own research, you’ll probably also find the comments below and on our USFIA review of interest too.