US Fine Investment Arts, Inc.

Agency: U. S. Securities & Exchange Commission~Description:

~ The Securities and Exchange Commission (“SEC”) filed fraud charges on October 1 2015 against an alleged international pyramid scheme that defrauded investors of over $32 million. The complaint filed in a Los Angeles federal court accuses CA based US Fine Investment Arts Inc. (“USFIA”) its principal Steve Chen and 12 affiliated businesses of misleading investors about a lucrative initial public offering (“IPO”) for USFIA that never occurred and about claims to own or control amber deposits worth billions of dollars. The assets of the companies and Chen have been frozen and the SEC seeks preliminary and permanent injunctions disgorgement of allegedly ill-gotten gains with prejudgment interest and civil penalties.

~ According to the SEC’s suit since at least April 2013 USFIA and Chen’s other entities have raised more than $32 million from investors in and outside the U.S. Buy-in amounts range from $1 000-30 000. Chen falsely promoted USFIA as a legitimate multi-level marketing company that owns several valuable amber mines in Argentina and the Dominican Republic and other assets worth $50 billion. Investors were guaranteed that an investment in USFIA was guaranteed to increase in value sixty four times over a very short period that USFIA was going to conduct an IPO in the near future and that investors would receive or be entitled to receive pre-IPO shares in USFIA that would increase in value once the company went public. No IPO ever took place.

~ In September 2014 investors were told that instead of cash or shares they would receive a cryptocurrency known as "GemCoins" in exchange for their investment in USFIA which would greatly increase in value. Chen told investors that the U.S. government had purchased 70% of GemCoins in circulation and a 6 400% profit was guaranteed according to promotional material. In reality GemCoins are valueless. In addition investors typically received an amount of amber equal to 30% of their investment. Upon obtaining appraisals of the amber investors learned that the amber was practically worthless.
~ View the SEC Complaint here.

On October 1 2015 the California Bureau of Business Oversight issued a "Desist and Refrain Order" against USFIA Inc. Steve Chen Leonard Stacy Johnson and Weiwen (Wayne) Zhao alleging they engaged in the offer and sale of unqualified securities in the form of USFIA investment contracts. The order also alleges they offered and sold securities in the form of USFIA investments contracts by means of written and oral communications including untrue statements of material fact and omission of material facts necessary to make the statements not misleading in violation of the law.

They are ordered to desist and refrain from the further offer or sale of securities in the State of California including but not limited to USFIA investment contracts unless and until qualification has been made under the law or unless exempt. They are also ordered to desist and refrain from making untrue statements of material facts or ommissions of facts relating to said securities. 

Details of the order are available here.