Five promoters behind the IcomTech Ponzi scheme have been ordered to pay $5 million in civil penalties and restitution for defrauding investors via a fake cryptocurrency trading platform.
According to a Dec. 11 statement, IcomTech founder David Carmona, along with four promoters of the scheme, namely Juan Arellano Parra, Moses Valdez, and David Brend, for violations of the Commodity Exchange Act and Commodity Futures Trading Commission regulations.
The court ordered them to jointly pay over $1 million in restitution to defrauded customers and imposed a $1 million civil monetary penalty on each of the four individuals.
Additionally, Marco A. Ruiz Ochoa, who admitted to his role in the scheme, was issued a consent order requiring him to pay restitution jointly with the others, bringing the total penalties to over $5 million.
Further, the accused also faces a permanent ban from registering with the CFTC and trading in any CFTC-regulated markets.
IcomTech was touted as a Bitcoin mining and trading company that offered periodic returns of up to 100%. The scheme was active for a little over a year between 2018 and 2019 and managed to defraud hundreds of victims by promising daily returns between 0.9% and 2.8%.
The scheme fell apart in 2019 when the company couldn’t keep up with withdrawal requests. Instead, they handed out a token called “Icoms” as a so-called solution, but it turned out to be practically worthless, leaving investors with even bigger losses.
The complaint alleges that five individuals solicited over $1 million from 190 individuals, promising to trade Bitcoin and other digital asset commodities on their behalf. Instead of using the funds for trading as advertised, the defendants misappropriated the money, leaving victims with significant losses.
Meanwhile, the funds were used to bankroll lavish lifestyles and host extravagant expos to lure more unsuspecting victims into their scheme.
The CFTC initially filed a civil enforcement action in May 2023, leading to significant legal fallout, including jail sentences and penalties for those involved.
Carmona and Brend have each been sentenced to 10 years in prison for their roles in the IcomTech Ponzi scheme, while Ochoa, who admitted his involvement, received a lighter sentence of 5 years.
Together, Carmona and Ochoa have also forfeited over $1.2 million in illicitly obtained funds, with Carmona surrendering $329,450 and Ochoa forfeiting $914,000, the statement noted, adding that Brend was fined $40,000 as part of his sentencing.
In March this year, Gustavo Rodriguez, who managed an online portal for IcomTech, was convicted of his role in setting up fraudulent investment packages and manipulating daily returns.