Saturday, June 27, 2015

Scam Tactics: Evolution of a Scam, from Proto-Share to Investment Fund to Cryptocurrency

A scam, like a specie, must evolve in face of pressure, such as law enforcement, spreading information about how scammy it was, and so on. To this end, it will often adopt the following tactics:
  • Language barrier -- spread to an area that speaks a very different language, like from US to Asia
  • Jargon barrier -- adopt modern buzzwords and drop buzzwords out of favor 
  • Obfuscation barrier -- have multiple company names, then intentionally mistranslate them to create even more confusion. 
Today, we will document one such scam, chronologically, including various names and translations, to show you how a scam evolved.

The scam went by various names. In China it is best known as American Continental Mining Industries 美洲矿业, but it's known elsewhere as USFIA

In November 2014, Chinese media covered that several scammers were extradited from Thailand that were scammers of something called 美洲矿业 that scammed people in Changde 常德, a city in Hunan province, China, as a part of International Fugitive Apprehension program known as "Operation Foxhunt 2014 獵狐2014". Changde police after receiving word that many downlines of the scam is traveling to Thailand for a special promo event, also travelled to Thailand and received cooperation from Thai police. Changde police then infiltrated the event on October 29th, 2014 in Thailand and filmed various promoters attending and speaking at the event, all talking about earn kaboodles of money without doing anything (if you invest now). After gathering the evidence, which was handed to Thai police, Thai police then made the arrests and handed two suspects over to Chinese police who brought them back to China. 

Just to break down the title:

美洲 -- American Continent
矿业 -- Mining Industry

So again, the name of the scam is American Continental Mining Industries 美洲矿业 Searching for this term on Chinese media yielded various newspaper reports, as well as Chinese affiliate promotional material. Another Chinese coverage stated:

(2014) May 13th, Mr. Liu of Changde reported he was victim of a scam. He handed 32500 RMB to "American Continental Mining Industries" to participate in supposedly Amber fund and proto-share investment. However, after a long time, there was no returns, and realized he had been scammed. 
After receiving the report, Changde MinSec started its investigation. 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. 
Up to June 2014, this criminal group has developed over 180 levels of downlines of over 80000 members, and illegally solicited funds of nearly 1 billion RMB (~161 million USD)
This news item explained that 2 members, a Mr. Chen (陈某) and a Mr. Lu (陆某) left the country before the police swept up the organization and arrested 22 leaders. Mr. Lu apparently changed the organization name to American Continental Amber (美洲琥) and continue to "remote" manage from afar. As two were arrested in Thailand, we assume both were extradited back to China, but that's not the end of this scam.

Also keep in mind that the Chinese equivalent of Senate is called Chinese People's Political Consultive Conference  and scam's parent organization (中美政治协商促进会) may have been picked to be a soundalike and official-sounding.

So here we have the following events:

2014 -- scam started as American Continental Mining Industries 美洲矿业

2013-2014: American Continental Mining Industries 美洲矿业 Searching for this term on Chinese media yielded various newspaper reports, as well as Chinese affiliate promotional material. Another Chinese coverage stated:

2014 June -- arrests in Changde, China related to 美洲矿业, leader escaped (to Thailand? US?) and renamed operation to American Continental Amber 美洲琥

2014 October -- arrests in Thailand in cooperation between Thai and Chinese police related to 美洲矿业, subjects extradited to China

From here, the scam went quiet in China... Because it was apparently relaunched in the US.

2014-2015  American Investment Alliance Group / Gemcoin

Upon the end of the "American Continental Mining Industries" or American Amber" in China and Thailand, a very similar operation started in the US, aimed at Chinese-American communities.

There were multiple "press-release" type coverage in Chinese newspapers (example 1 in NorCal, example 2 on East Coast, example 3 in Toronto, Canada), touting a "美國投資聯盟集團" (literally American Investment Alliance Group") though it apparently calls itself "Alliance Financial Group", or AFG .  And under that it launched a USFIA Currency Fund which goes by the Chinese name (美國富豪貨幣基金, American Regal Currency Fund)

What is this USFIA? According to its own website stands for "US Fine Investment Arts"

However, on their own "about us" page, they used the Chinese name (美国富豪集团公司)   or American Regal Group Company. It also claimed to be "founded and owned by US China Consultation Association" 中美政治协商促进会

Oh, gee, it's the SAME backer claimed by that "American Continental Mining Industries" 美洲矿业, in China. What a coincidence! What are the chances that two scams would claimed to be backed by the same organization?!  Let's check the timeline though.

Searching for 中美政治协商促进会 revealed that there is such an organization in the Great LA area in SoCal, in the city of Arcadia. It's registered as a US Corporation, and its full name is actually "US-CHINA CONSULTATION ASSOCIATION LIAISON/CONSULTING SERVICES" registered July 2013. Its head is "Steve Chen".

The problem with this registration is the address given is a business  park building. With no suite number, the letters likely go to "Arcadia Business Solutions"... an accountant that also register companies and apparently provides maildrop too.

Checking "Steve Chen", using Arcadia, CA as a filter yielded that Steve Chen is also head of

  • AHome Real Estate LLC
  • Aborell Management Team LLC
  • Aborell Investment Associates LLC
  • Aborell REIT III LLC
  • AmAuction Inc. 
  • USFIA Inc
  • Apollo Real Estate Investments I LLC
  • Aborell Advisors I LLC
  • Aborrell MGMT I LLC
  • Ameritra Inc. 
  • Amkey Inc. 
ALL of these are at the SAME building with exact same address (either no suite or Suite 100). 

Suspicious, but nothing illegal. On the other hand, this is the SAME pattern that Phil Ming Xu did, by establishing lots of different companies that supposedly dabbled in everything from golf courses to fashion to immigration...

Any way, back to Mr. Steve Chen, whose Chinese name is apparently 陳力. Too generic to search though.

Is there a link between USFIA and 美洲矿业 (US Continental Mining Industries)? Google says... it's the same thing. Search for "usfia inc 美洲矿业" scroll down past the videos, and you'll get...

CCYP = Chinese Commercial Yellow Pages

So, there's really no doubt that they are the SAME operation. Here are the links:
  • Died in China, resurrected in the US only months later
  • Claimed to have same parent "China US Political Consultive Promotional Committee"
  • Claimed to be investing in amber
  • Same Chinese name 美洲矿业
Don't touch this with a ten foot pole.

Instead of just "mining backed proto-shares" they now claimed that they need investment into their "fund", then it's mixed up with these cryptocurrency "gemcoins" now backed by amber mining in Dominican Republic.

What a mess.


  1. Unfortunately, someone close has already invested at least USD60K into this scam.
    I can't convince the person because he is desperate, prideful and greedy. They've already establish a strong emotional connection with him... nothing gets through. Point-blank facts don't even stir him to think. At this point, I can only reach out for help from the authorities. Hopefully, they can put a stop to their operations. It's going to be more painful if this scam drags out for another 2 or 3 years.

    1. Report to your local authorities, as well as to California Department of Business Oversight, and California Attorney General's Office.

    2. Hi Kasey, thanks for this tips but this is taking place elsewhere. This scam has been operating in Malaysia and Singapore since the start of this year.

    3. Still, wouldn't hurt to complain about them on their home turf: California.

      They will blah blah about how they are a Delaware corporation, but with HQ in California, they are still bound by California law. So, go ahead, write your letter, layout how they have deceived you, or you are bring to the authorities attention this scam is based in California, and lay out your victim story.

    4. Hi Kasey, I was taking my mind off this matter recently because of my schedules... but I'm surprised to see your slew of updates about this scam. Thanks cos' it pushed me to find other victims (on local forums) to file a police report for commercial crime. I'll definitely be writing in to CDBO and CAGO as well.

  2. First of all, sorry for my poor english. I'm from Indonesia. Some of my relatives have joined gemcoin. My uncle is the first person who introduce gemcoin to them. He got the info about gemcoin from his friend from China, since he always make trips to china. Then introducing to his friend (named AB). AB then got paid a lot of money. AB then introduced gemcoin to his friends and the network become larger and larger. Now AB has invested about $US 20.000 and very active in finding new members.
    Few weeks ago AB came to my home. We discussed about gemcoin. Then he showed me his ambers those he got from gemcoin. He said that some ambers worth about $US10.000. I took some and verified. I noticed those ambers were not so valuable. No certificate of original or something like that. At least the weight, carat, color, or origin.
    That time, i felt something went wrong and my had been cheated. But i kept silent because he looked very optimistic about gemcoin.
    AB get the chance to visit US because of his achievement in gemcoin. But US rejects his visa. He may re-apply visa in November. I confuse why such a big firm like USFIA could not sponsor his visa as Amway company does for its member. It triggers my suspicion.
    Until now my uncle and AB still promoting their gemcoin. They know some isues about gemcoin's scam repots but keep their ears shut off. I don't know how to tell them the truth.

    1. Your uncle and AB probably already lost their money. According to LA Times newspaper, FBI is investigating USFIA/Gemcoin / Steve Chen.

      "The FBI is now investigating the claims of investors, according to documents reviewed by The Times. At least one disgruntled investor said he has been interviewed by federal agents, and others have received letters from the bureau alerting them that they might be victims of a securities fraud."

      If this does not shock them into reporting their being scammed... doubt anything will. Denial does not make the problem go away.

      You will want to keep up by doing Google searches yourself. This will get VERY ugly.

    2. Thank you for your information, Kasey Chang. I'll try my best to tell them about the truth.
      Please update latest information regarding this issue. My friend AB is not a rich man. He only own a coffee shop without any assistant. It will be a hard blow to him by knowing that he has been cheated.