Houston Man Admits to $6.5M Diamond Scam

DALLAS – A brazen scheme to defraud investors out of $6.5 million in a supposed diamond venture has landed a Houston man in federal court. Christopher Arnold Jiongo, 55, admitted guilt to one count of wire fraud this morning before U.S. Magistrate Judge Paul D Stickney, according to a statement from U.S. Attorney John Parker of the Northern District of Texas.

Jiongo now faces a potential twenty-year federal prison sentence and a hefty $250,000 fine. He remains free on bond while awaiting sentencing on September 11, 2017, before U.S. District Judge David C. Godbey. The case unravels a complex web of deceit involving Stonebridge Advisors, Worldwide Diamond Ventures, and JBH Securities, all operating out of the Dallas area.

Court documents reveal that Craig Allen Otteson, 64, of McKinney, acted as Managing Member and Chief Compliance Officer of Stonebridge Advisors, the managing partner of Worldwide Diamond Ventures. Jay Bruce Heimburger, 58, of Dallas, was a Principal Partner of Worldwide Diamond and also controlled JBH Securities, which provided investment advice. Worldwide Diamond, ostensibly in the business of buying and reselling diamonds internationally, filed for bankruptcy in the Northern District of Texas on October 1, 2013 – a collapse that came after years of alleged fraudulent activity.

The scam kicked off in the summer of 2011 when Jiongo drafted $50,000 “diamond notes” used to lure investors. Jiongo, Otteson, and Heimburger initially promised investors that their funds would be solely used to purchase and resell diamonds, fully secured by the company’s inventory. But when the business plan faltered, the trio allegedly began diverting funds for personal gain. Approximately $2.4 million in investor money was funneled into loans to third parties and to Global Reach Industries Limited, with no disclosure to those who had invested.

The deceit deepened with a planned $1 million loan of investor funds to Global Reach Industries Limited, a company established and controlled by Jiongo himself. In July and August 2011, the defendants allegedly wired $400,000 and $600,000 of investor funds, respectively, into accounts designated by Jiongo. Documents indicate millions of dollars were fraudulently collected from Worldwide Diamond investors between 2011 and 2012. Otteson and Heimburger, scheduled for trial on July 17, 2017, could face similar charges.

This case is part of a larger Bankruptcy Fraud Initiative in the Northern District of Texas, which has already seen 17 convictions, one mistrial, and eight pending trials out of 26 defendants charged. The U.S. Postal Inspection Service led the investigation, with Assistant U.S. Attorney David Jarvis prosecuting the case. This isn’t just about diamonds; it’s about trust betrayed and fortunes stolen.

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