Key Points
- Five individuals involved in the IcomTech Ponzi scheme have been mandated to pay $5 million for defrauding investors.
- The scheme involved a fraudulent cryptocurrency trading platform that promised high returns.
The IcomTech Ponzi scheme’s promoters have been hit with a $5 million penalty for defrauding investors through a bogus cryptocurrency trading platform.
Details of the Penalty
On December 11, it was revealed that David Carmona, the founder of IcomTech, and four other promoters of the scheme were found guilty of violating the Commodity Exchange Act and Commodity Futures Trading Commission regulations. The court ruled that they are to jointly pay over $1 million in restitution to the deceived customers and each of the four individuals will face a $1 million civil monetary penalty.
Marco A. Ruiz Ochoa, who confessed his involvement in the scheme, was given a consent order to pay restitution jointly with the others, pushing the total penalties to over $5 million. Furthermore, the accused also face a permanent ban from registering with the CFTC and trading in any CFTC-regulated markets.
The IcomTech Scheme
IcomTech was presented as a Bitcoin mining and trading company that promised periodic returns of up to 100%. The scheme was operational for just over a year between 2018 and 2019 and managed to defraud hundreds of victims by promising daily returns between 0.9% and 2.8%. However, the scheme crumbled in 2019 when the company failed to meet withdrawal requests and issued a practically worthless token called “Icoms” as a supposed solution, causing even larger losses for investors.
The complaint alleges that the five individuals solicited over $1 million from 190 individuals, promising to trade Bitcoin and other digital assets on their behalf. Instead of using the funds for trading as promised, the defendants misappropriated the money, leaving victims with significant losses. The funds were used to fund lavish lifestyles and host extravagant expos to attract more victims.
The CFTC initially filed a civil enforcement action in May 2023, leading to significant legal repercussions, including jail sentences and penalties for those involved. Carmona and Brend were each sentenced to 10 years in prison for their roles in the IcomTech Ponzi scheme, while Ochoa, who admitted his involvement, received a 5-year sentence.
Carmona and Ochoa also forfeited over $1.2 million in unlawfully obtained funds, with Carmona surrendering $329,450 and Ochoa forfeiting $914,000. Brend was fined $40,000 as part of his sentencing. Earlier this year, Gustavo Rodriguez, who managed an online portal for IcomTech, was convicted for his role in setting up fraudulent investment packages and manipulating daily returns.
