Cryptocurrency Trading Scheme Results in $5 Million Penalty and Prison Terms for Five Individuals.

A federal court has ordered five individuals associated with Icomtech to pay over $5 million in penalties for orchestrating a digital asset fraud scheme that targeted nearly 200 investors worldwide. The scheme promised investors unrealistic daily returns of up to 2.8% through Bitcoin and other digital assets. The defendants face significant monetary penalties and permanent trading bans. Criminal proceedings against some of the defendants remain ongoing.

The U.S. Commodity Futures Trading Commission (CFTC) recently obtained a default judgment against five individuals associated with Icomtech, a California-based digital asset fraud scheme. The defendants, David Carmona, Juan Arellano Parra, Moses Valdez, David Brend, and Marco A. Ruiz Ochoa, are accused of orchestrating a Ponzi scheme that targeted nearly 200 investors worldwide [1].

According to the CFTC's complaint, the defendants promised investors unrealistic daily returns of up to 2.8% through Bitcoin and other digital assets. Instead, they misappropriated a significant portion of the investors' funds, estimated at around $8.4 million [1].

The default judgment order found all five defendants liable for violating the Commodity Exchange Act and CFTC regulations. Carmona, Arellano Parra, Valdez, and Brend will each pay a $1 million civil monetary penalty and about $1 million in restitution to the victims, totaling over $5 million [1]. Ochoa was issued a consent order and will pay a smaller penalty [1].

Carmona, the founder and mastermind of IcomTech's Ponzi scheme, was previously sentenced to 10 years in prison for conspiracy to commit wire fraud [1]. Other operators, including Rodriguez, were also sentenced to prison terms for their involvement [1].

Operating between mid-2018 and the end of 2019, IcomTech promised investors a 100% return on their investment every six weeks [2]. The company's operators often traveled extensively, hosting "lavish expos" to lure potential investors [2]. They arrived at these events in expensive cars and wore luxurious clothing, boasting about their profits to convince potential investors they could reach the same level of financial success [2].

The CFTC's investigation and legal actions against Icomtech and its operators serve as a reminder of the importance of exercising caution when investing in digital assets and ensuring that investment opportunities are legitimate.

References:
[1] Cointelegraph. (2023, December 11). IcomTech operators ordered to pay millions in fines, restitution. https://cointelegraph.com/news/icomtech-operators-ordered-pay-millions-fines-restitution-cftc
[2] Rodriguez, J. (2020, March 2). The rise of Mert Mumtaz: ‘I probably FUD Solana’. The Block. https://www.theblockcrypto.com/news/107519/the-rise-of-mert-mumtaz-i-probably-fud-solana