Emily Walker
Two main individuals involved in the IcomTech cryptocurrency Ponzi scheme have received lengthy prison sentences, as reported in a recent press release from the US Justice Department.
This fraudulent scheme tricked countless investors, leading to significant financial losses. The sentencing concludes one of the notable cases of cryptocurrency deception.
Overview of the IcomTech Fraud
David Brend and Gustavo Rodriguez were sentenced to 10 and 8 years in prison, respectively, by Judge Jennifer L. Rochon after their conviction for wire fraud conspiracy in March.
Authorities indicated that IcomTech, which began in 2018, presented itself as a cryptocurrency trading and mining business, luring investments with promises of high daily profits. However, the firm did not conduct any real trading or mining.
Investment funds were diverted to pay previous investors in a typical Ponzi scheme manner. Among the tactics used to attract investors, Brend displayed a lavish lifestyle, showcasing luxury cars and high-end fashion.
Investors received access to an online platform to track supposed profits, though most were ultimately unable to retrieve their investments, leading to total financial loss.
As investor complaints increased, Brend and Rodriguez shifted tactics, proposing the sale of exclusive crypto-tokens to restore liquidity to IcomTech.
However, these tokens, known as “Icoms,” were also a fraudulent ruse. In the press release, the US DoJ stated:
Proponents of the scheme claimed that “Icoms” would later hold significant value as they were accepted for transactions. This assertion was false, as “Icoms” held no real worth, causing further losses for investors. By late 2019, IcomTech ceased payments and subsequently collapsed.
Consequences of the Scheme
Rodriguez, who was responsible for managing the IcomTech website and designing its compensation plans, was ordered to forfeit $40,000, which represented his earnings from the scheme, with restitution yet to be determined.
Brend, who promoted the operation, also faces pending decisions on restitution and forfeiture. U.S. Attorney Damian Williams commented:
Brend and Rodriguez were instrumental to the IcomTech Ponzi scheme. Rodriguez created the fraudulent website while Brend actively marketed the scheme and its supposed investor profits. They collectively defrauded many individuals of millions. A unanimous jury convicted both, leading to their substantial prison sentences.
Assistant U.S. Attorney Damian Williams praised the investigation undertaken by Homeland Security’s El Dorado Task Force, along with the involvement of the SEC and CFTC.
Williams emphasized the severity of their actions, stating that they exploited their roles for personal gain at the cost of many victims.
Image created with DALL-E; Chart data sourced from TradingView