IcomTech promoters found guilty by jury in crypto ponzi scheme, potentially sentenced to 20 years
Two individuals associated with IcomTech, a New York-based company specializing in cryptocurrency mining and trading, have been convicted by a jury in a District Court. David Brend and Gustavo Rodriguez now face the possibility of up to 20 years in prison for their involvement in a fraudulent scheme that has been likened to a “Ponzi” scheme.
The verdict, delivered on March 14, revealed that David Carmona, the founder of IcomTech, recruited Rodriguez in mid-2018 to create a website for the company. IcomTech promised its investors guaranteed daily returns from its cryptocurrency trading and mining activities. However, the prosecution argued that these activities never actually took place. Instead, the company operated a Ponzi scheme, using funds from new investors to pay earlier ones.
Rodriguez was implicated in setting up fraudulent investment packages and manipulating daily returns accessible to investors through an online portal that he managed.
Brend, along with other promoters, was accused of diverting significant amounts of investor funds for personal use. This included purchasing real estate, funding extravagant travels, and organizing extravagant events to attract more investment. These events were characterized by the display of luxury vehicles and clothing to create an illusion of wealth and financial success.
The scheme eventually collapsed in 2019 when the company failed to fulfill withdrawal requests. Instead, it offered investors a token called “Icoms” as a supposed solution. However, these tokens were found to be essentially worthless, causing further losses for investors.
Damian Williams, the U.S. Attorney for the Southern District of New York, highlighted the scale of the deception, stating that the scheme defrauded tens of thousands of people out of tens of millions of dollars. This emphasizes the significant financial damage inflicted on investors who were seeking to grow their savings.
Sentencing for Brend is scheduled for June 27, followed by Rodriguez’s on June 28.
This conviction of Brend and Rodriguez is reminiscent of another cryptocurrency-related legal case involving Roman Sterlingov, the co-founder of Bitcoin Fog. On March 12, Sterlingov was convicted of money laundering through a service designed to obscure the origins of illegally obtained Bitcoin. His operation facilitated nearly $400 million in illegal transactions. This case, along with that of Brend and Rodriguez, highlights the potential for fraud within the cryptocurrency sector.
In a similar vein, the U.S. Securities and Exchange Commission (SEC) filed a lawsuit last year against Utah-based firm Green United. The company was accused of violating federal securities laws by selling $18 million worth of fake cryptocurrency mining equipment.
