A federal grand jury has charged Jeremy Jordan-Jones, founder of blockchain startup Amalgam Capital Ventures, with defrauding investors of more than $1 million.
On May 21, authorities arrested Jordan-Jones and charged him with multiple counts, including wire fraud, securities fraud, making false statements to a bank, and aggravated identity theft. The Department of Justice announced the charges the same day.
False Claims of Partnerships
Prosecutors say Jordan-Jones presented Amalgam as a cutting-edge tech company that had developed blockchain-based point-of-sale payment systems.
He claimed the firm had secured multi-million-dollar partnerships with several high-profile organisations like the Golden State Warriors basketball team, an English Premier League soccer club, and a restaurant conglomerate operating over 500 locations.
None of these partnerships were real, the indictment states. Investors were led to believe their money would help Amalgam prepare to launch a non-existent cryptocurrency token on an exchange.
Solicitation of Investments
In pursuit of funding, Jordan-Jones attracted money from various investors, including at least one venture capital firm identified in a Forbes article as Brown Venture Group.
He promised that investor funds would be used to develop Amalgam’s technology and support its token listing. Instead, prosecutors allege, he diverted the funds to support a lavish personal lifestyle.
Lavish Spending
Rather than investing in the startup’s operations, Jordan-Jones used investor money for luxury expenses. He spent on upscale hotels and fine dining in Miami, costly car payments, and designer clothing.
The indictment asserts that while Jordan-Jones portrayed Amalgam as a legitimate blockchain venture, the company had no working products, few customers, and zero legitimate business relationships.
Bank Fraud Allegations
The charges also detail how Jordan-Jones provided falsified documents to a financial institution. Using these false papers, he obtained a corporate credit card and racked up a $350K balance before the bank closed his account.
Prosecutors say he misrepresented Amalgam’s financial standing to secure credit under false pretences.
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Official Statement
U.S. Attorney Jay Clayton warned that Jordan-Jones exploited the hype around blockchain technology to perpetrate his scheme. Clayton said, “He touted his company as a groundbreaking blockchain startup, backed by high-profile partnerships.
“In reality, Jordan-Jones’s company was a sham, and investors’ funds were siphoned off to bankroll his lavish lifestyle. This should be an example to would-be financial fraudsters that the Southern District and the FBI are watching and to the investing public that fraudsters often use the promise of new technology to cloak their schemes.”
Startup’s Claims
Amalgam Capital Ventures had marketed itself as offering point-of-sale systems and blockchain-based payment and security solutions.
The indictment, however, makes clear that the company had no operational products, almost no customers, and no genuine partnerships. All public claims of cutting-edge blockchain services were fabricated to entice investment.
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