IcomTech executives to pay $5 million in compensation for defrauding investors with false crypto promises

Five people associated with IcomTech, a cryptocurrency Ponzi scheme that defrauded investors of $8.4 million, were ordered by a federal court to pay more than $5 million in restitution and penalties.

The Dec. 11 ruling by the United States District Court for the Central District of California also included prison terms for three of the defendants.

Operating from 2018 to 2019, IcomTech marketed itself as a cryptocurrency platform offering daily returns of up to 2.8%. Investors were convinced that their funds were being used for cryptocurrency trading and mining, facilitated through “Icoms,” a proprietary token. However, the researchers found no evidence of these activities. Instead, the defendants misused the funds for personal expenses, including luxury items and luxury vacations.

David Carmona, the ringleader of the scheme, along with his partner David Brend, received 10-year prison sentences. Another conspirator, Marco A. Ruiz Ochoa, was sentenced to five years. Two additional defendants, Juan Arellano Parra and Moses Valdez, were found liable through financial penalties and permanently prohibited from engaging in any activity regulated by the CFTC.

The Commodity Futures Trading Commission (CFTC) began its investigation into IcomTech in 2023 following complaints from defrauded investors. The case highlighted a common pattern in cryptocurrency fraud, where victims are lured by promises of exorbitant returns and persuaded to recruit others, fueling a cycle of deception.

The court also ordered the forfeiture of more than $1.2 million in assets linked to the defendants. Despite this recovery, it is unlikely that many victims will recover all their losses.

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