LOS ANGELES (AP) — A Southern California man charged with bilking nearly $150 million out of 70,000 investors worldwide through a phony digital currency scheme has agreed to enter a guilty plea to federal charges, it was announced Wednesday.
Steven Chen, 62, of Bradbury agreed Tuesday to plead guilty to one count of conspiracy to commit wire fraud and one count of tax evasion, the U.S. Attorney's office announced. He has a court appearance scheduled for next month and could face up to 10 years in federal prison.
According to his plea agreement, Chen owned U.S. Fine Investment Arts Inc. and six other companies, all based in Arcadia, California. The companies issued a sham digital currency called "Gem Coins" that supposedly was backed by amber and precious gems from mines that Fine Investment Arts owned in several countries.
"Mr. Chen's promises to investors were as worthless as his non-existent mines and phony digital currency," U.S. Attorney Nick Hanna said in a statement. "This case should remind all investors that trappings of success may convey legitimacy, but everyone should exercise extreme care when considering giving hard-earned money to any outfit promoting trendy products and extravagant profits."
Chen used millions of dollars in proceeds to buy homes and pay for a gambling habit, authorities said.
Another company executive, Leonard Stacy Johnson, 53, of Huntington Beach, pleaded guilty last year to tax evasion and making a false statement on an immigration document. He is scheduled to be sentenced in June.