Key takeaways:
- Two former promoters of the purported crypto mining and trading company IcomTech were found guilty of a wire fraud conspiracy by a New York jury.
- Carmona, Brend, and others assured investors in ItomTech that the company’s cryptocurrency mining and trading would yield daily returns.
Two former promoters of the purported cryptocurrency mining and trading company IcomTech were found guilty of a wire fraud conspiracy by a New York jury. As a result, they both face a maximum sentence of 20 years for their roles in the “Ponzi” scheme.
The two-week trial of David Brend and Gustavo Rodriguez concluded on March 14 when a jury in a New York District Court found them guilty of one count each of conspiracy to conduct wire fraud.
In a news statement dated March 15, the US Attorney’s Office for the Southern District of New York stated that IcomTech founder David Carmona engaged Rodriguez in the middle of 2018 to create a website for the recently established IctomTech, which billed itself as a cryptocurrency mining and trading company.
Carmona, Brend, and others assured investors in ItomTech that the company’s cryptocurrency mining and trading would yield daily returns.
Prosecutors, however, contend that the business was a “Ponzi” scam that utilized investor money to pay other investors, not really trading or mining cryptocurrency.
Along with providing advice on pricing, Rodriguez also oversaw the phony daily returns and “investment packages” that clients could access through his portal and the website.
Meanwhile, the US Attorney’s Office claimed that Brend and the other scheme organizers embezzled hundreds of thousands of dollars from victim funds.
The embezzled money was used to travel, purchase real estate, and organize opulent expos and small-scale community presentations. The promoters would show up in “expensive cars and wearing luxury clothing” in an attempt to get more people to invest by promising them “financial freedom.”
When their fictitious earnings increased on the platform, IcomTech investors encountered delays, hidden costs, and justifications when attempting to withdraw their money. IcomTech raised additional funds by offering a token called “Icoms” on the false pretense that businesses would accept it as payment as complaints escalated.
Icoms were “essentially worthless,” which resulted in additional losses when IcomTech failed and stopped paying out in 2019.
The plan, according to US Attorney Damian Williams for the Southern District of New York, scammed “working people out of their hard-earned money” and conned tens of thousands of people out of tens of millions of dollars. He continued, saying:
“As a result of their lies to hardworking people, Brend and Rodriguez stand convicted of a federal crime and face substantial time in prison,”
Brend is expected to be sentenced on June 27, and Rodriguez is expected to be sentenced the day after, June 28. After entering a guilty plea to wire fraud conspiracy in December, IcomTech founder Carmona and former CEO Marco Ochoa were both sentenced to five years in prison in January.
