Digging deeper into the USFIA GemCoin Ponzi scam
Whereas 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.
Delaware sucks. I’m finding no less than THREE “Alliance Financial Group”. Ignoring the one in Florida, that still leaves two.
One is formed 11/20/2002, and one is formed 6/26/1991. Given the rahrah in the presentations, I’m going to guess it’s the 2002 one, file number 3593706. However, Delaware wants $10 just to look at the status, and $20 if you want a report on filing history.
The immigration thing is very similar to PMX’s claim that he’ll help people do EB-5 “investment residency visas” if they hand over 500K plus his fees through his various WCM entities.
Checked with someone in DR and he never heard of a mine called Ammine either. There is no such mine in DR.
The video presentation (in various languages) are just word soup where they throw bunch of words at you that makes no sense except they sound impressive, leading you to misinterpret any way you want, so they have plausible deniability, i.e. “you understood it wrong”.
I gave up on “Alliance Financial Group” and Pinnacle, there are just way too many of them. But you can see the office in the Street View map (with writing in Chinese, but not clear enough to read).
The gem coins can be sold on the internal platform, this gemcoin is different from bitcoin or lite coin, gemcoin is centralized, not like the decentralized bit coins or lite coins.
The gemcoin is published by usfia, just similar as some points published by other companies, the points can be traded each other.
The trading price is decided by usfia. I cannot say this company is legal or illegal since I am not an attorney, based all the information from Chinese news and from the investigation of this article, it looks like the amber mine in DR has raised a lot of questions.
Chan and chen is the same word in Chinese, some people in mainland use chen but people from hong kong like to use chan.
Steve, Mo and Li Chen have all been busy –
L’Be Group
Amkey, Inc
Aborell Investors LP
Quail Ranch Golf Course LP
Abroell Reit II LLC
Apollo Reit I Inc
Aborell Management Team LLC
Aborell Investment Associates I LLC
Aborell Reit III LLC
Alliance Ngn, Inc
Ahome Real Estate
Ameritra, Inc
Alhambra Gardens LLC
Amauction
just for starters, and I’m fairly certain Steve is behind the many “Holding” corps registered in Henderson NV this year..
This ponzi point thing is pretty new.
From the description of the scam in China back in 2014, somebody arrives in town, rents an office and showroom, then start displaying amber jewelry.
Prices are slightly below market, but still expensive. Then as people start looking, they will start hinting at “you can afford this, and make money, if you join our special amber investment club”.
The more you buy, the more protoshares you get, and more $$$ you get later. This is probably individual reps though. The big shots, i.e. earlybirds do the seminar format: rent a ballroom, talk talk talk, about how the limited supply means appreciation, blah blah blah. Buy, buy, buy.
When it was busted in China, that’s when they switched to the Ponzi point / Gemcoin model, where they don’t even give you the amber jewelry any more, just these worthless gemcoins.
My source in DR is apparently familiar with the Gemcoin scam. According to him (unverifiable at the moment), some Chinese company DID buy ONE lousy mine near El Valle, kept it open for 2-3 months, can’t hack it, closed it, not too long ago (a few months).
So, take it with a few grains of salt.
@Lc
There’s nothing legal about the Ponzi points business model.
I’d be willing to bet there’s an option with the monthly autoship to instead pay for GemCoin points. And that nobody (except perhaps once or twice to have something to market with) has opted for actual amber (think EmGoldex gold).
I am trying to find more traces of this scam in China, and I managed to dig up a report in March 2014.
Apparently when they were reported on by a newspaper in Shengyang, they immediately pulled up stakes and left the province, before even MinCommerce and police can get there.
NOLINK://news.sina.com.cn/o/2014-03-14/094029706485.shtml
No city was mentioned. I has to search by the newspaper name to find it’s in Shengyang (LiaoNing province).
A previous report exposing the scam showed that the scam was promising 10X (1000%) returns in less than 3 months.
NOLINK://news.liao1.com/epaper/hscb/html/2014-03/13/content_363175.htm
USFIA is claiming they will launch a trading platform on July 1. They have posted this photo:
usfia.ch/members/seb12/activity/883
Showing stacks of plastic bins, which they say contain amber sent to the U.S. Treasury Department as a “pledge for the intrinsic value” of Gemcoin when it begins trading.
Uh… so they’re saying U.S. Treasury has some kind of vault where you can send amber for storage?
of course! that’s what the US Treasury department does for a living! – hoard amber for the gemcoin ponzi.
lets just mail the US treasury department and ask them!
after all, they’re getting all this ‘amber’ with plastic boxes free.free.free!
15 ‘billion’ asset! c’mon US treasury clarify this !
Sounds like a game of telephone being played. The Chinese above the bins actually says… “Gemcoin Release Deposited Gemstones”
In other words, they show you some bins contained who-knows-what, and claim it’s worth, what?
Why does this reminds me so much of Carlos Costa of TelexFree waving stacks of paper around, claiming it’s “insurance” for everybody’s paycheck? 🙂
Furthermore, there is no “standard” to amber pricing. Price of amber is even MORE subjective than diamonds.
At least with diamonds you have GIA or EGI certs on grade, color purity, size, cut, and so on. There’s no such thing for amber. Not to mention there are amber from Russia and Ukraine, as well as Colorado, Burma, and various other locations.
Basically, there is no “objective” value to those amber, if they were amber AT ALL, displayed by GemCoin. It’s completely bull****.
It’s far more likely those are cheap amber jewelry they sourced from cheapest vendor in China. Check Aliexpress for some prices. It’s under $1 per gram.
K Chang, it may not even be real amber. Some USFIA investors received packets of “amber” that turned out to be plastic, see here: twitter.com/netbusinessr/status/557939158052655104
and here in French: usfia.lescigales.org/index.html
I was looking a little closer on how Johnson got invited for that Dubai event.
According to the links I can find, it says that AFG is a “Gala Dinner Sponsor”. In other words, the cheapest level of sponsorship they can find.
Furthermore, there’s also no photo of them them winning anything. Checking the list of “investment award” winners also failed to reveal AFG or USFIA or whatever.
Yet you’ll find a lot of blah blah about how Johnson was invited for his expertise in emerging economy and how AFG / USFIA won an award.
Truth hurts: 1) AFG / USFIA did not win anything in 2015.
Proof: NOLINK://www.aimcongress.com/en/features/investment-awards/
Truth hurts: 2) Johnson was “invited” because the dinner sponsorship comes with one attendee.
In 2014 Gala Dinner sponsorship costs $100K USD. That’s how much money they used to look big, as it served no legitimate purpose for “amber investing” or even “cryptocurrency”.
Great find – Sure looks like they have taken pages from the WCM playbook
They also lied in saying that Leonard Johnson held a private meeting with Fahad al Gergawi, CEO of the Dubai investment agency, during the event in Dubai, and that he endorsed Gemcoin and promised to present it to the central bank of the United Arab Emirates.
I sent a message to Mr. al Gergawi asking if that was true. Here is the response I received from Samir Nabil Khadrawi, senior executive at the agency:
ucca.alliancefinancialgroupusa.com/ucca/news/announcement.html#
today July 1st gemcoin still cannot be sold. Usfia lied again to affiliates.
Chan only person nelly appointed 30 people to trade each other to show. All the members still cannot sell their gemcoins, it is a big scam in 2015. The company is a liar, scammer.
But that’s obviously the implication via the offered investment in GemCoin points.
Might not be specifically 400% in 60 days but affiliates are investing on the implied promise of a greater than 100% ROI.
Seeing as GemCoin points are obviously a Ponzi scheme, are they going to sue themselves then?
on a french chat forum someone has commented:
i can find CPE easily which held its sixth convention recently on june 24th, chaired by secretary of state john kerry, and Chinese Vice Premier Liu Yandong.
but UCCA does not show up as government instituted body. the UCCA [Ullens Center for Contemporary Art], i found in china has to do with art and art shows and art galleries.
so, UCCA is a fake and solomon yang’s denials about his gemcoin involvement is fake, and of course the gemcoin is also fake.
It’s pretty funny that UCCA is putting out a statement saying they weren’t involved. If you click on the link and then click through to the main website there are lots of photos of Steve Chen and the USFIA headquarters in Arcadia.
Just found out the SEC LA is investigating this company now. Just filed complaint.
If anyone realized its a scam, please look up sec.gov/contact/addresses.htm, and find the email address for LA office.
Use the subject like as “USFIA – Investigete”. It will be directed to a right attorney. More people provide evidence and support, the faster the Investigetion can be done, and less people will be scammed!
UCCA is not “fake” in that it doesn’t exist. It’s “fake” in the sense it’s not in any way endorsed or authorized by government, but a private business that made itself SOUND like something quasi-governmental, esp. in Chinese.
To investigate ….
gemcoin.bzh/usfia.html
ucca.alliancefinancialgroupusa.com/ucca/memeber/Ezhichao1.html
The bull**** is strong on the AFG website.
Under John Wuo, this is what AFG wrote:
鄂志超(中美政协常委／美国议员／雅凯迪市市长)
John Wuo (Standing member of UCCA / American Lawmaker / Mayor of Arcadia)
This sure the heck implied that he’s a congressman, doesn’t it? Obfuscation at work.
Back to the UCCA, which we sort of cover before, this supposedly explains the composition of UCCA
本会是由中国政协委员、美国国会议员和世界各地各领域的精英组成。
Which Google translate says:
This will be composed of Chinese CPPCC members, the US Congress and the elite around the world in various fields.
Do you see any CPPCC members or US congresspersons as members of UCCA? I don’t. What we have here is relative of members, former Chinese actress, and some self-pub author (Leonard Johnson). Even Solomon Yang allegedly quit them.
Hello, I am a journalist with Bloomberg Businessweek magazine. I’ve been doing some research on USFIA and the Gemcoin, and I’m interested in speaking with investors and friends & families of investors, about their experience.
The moderator of this forum has kindly agreed to post my email address so you can contact me: (Ozedit: removed 25th July) (This address will only be posted here for a week, so please make a note of it if you plan to contact me.) Thank you.