Two central figures behind the cryptocurrency Ponzi scheme generally known as IcomTech have been sentenced to substantial jail phrases, in line with a current press launch by the US DoJ.
The scheme defrauded 1000’s of buyers out of tens of millions of {dollars}, leaving monetary devastation in its wake. The sentencing marks a serious authorized conclusion to one of many extra distinguished circumstances of cryptocurrency fraud.
Particulars of the IcomTech Scheme
David Brend and Gustavo Rodriguez, key operators of IcomTech, obtained jail sentences of 10 and eight years, respectively, handed down by Decide Jennifer L. Rochon following a March trial the place each have been convicted of conspiracy to commit wire fraud.
Prosecutors revealed that IcomTech, launched in mid-2018, masqueraded as a cryptocurrency mining and buying and selling agency, promising excessive each day returns to draw investments. Nevertheless, in actuality, the corporate didn’t have interaction in any reputable buying and selling or mining actions.
As an alternative, funds collected from buyers have been used to pay earlier buyers in a “basic Ponzi scheme” trend. Promoters like Brend flaunted luxurious life, together with costly automobiles and designer clothes, to lure victims.
Buyers have been offered entry to an internet portal to observe alleged earnings, however most have been unable to withdraw their cash, in the end shedding their whole investments.
The US DoJ additionally reveals that Brend and Rodriguez’s scheme didn’t finish there. When complaints heightened amongst the buyers, they restrategized and “started providing proprietary crypto-tokens on the market as a way of injecting liquidity into IcomTech.”
Nevertheless, the token dubbed “Icoms”, was additionally nothing apart from a sham. The US DoJ wrote within the press launch:
Promoters of the schemes claimed that these tokens, generally known as “Icoms”, would ultimately be price a big sum of money after they have been accepted by corporations for cost for items and providers. This was false. In actuality, “Icoms” have been primarily nugatory and resulted in additional monetary loss to Victims. By in or concerning the finish of 2019, IcomTech stopped making funds to Victims and IcomTech collapsed.
Authorized and Monetary Repercussions
Gustavo Rodriguez, who managed IcomTech’s web site and crafted compensation plans, was ordered to pay $40,000 in forfeiture, representing his direct proceeds from the scheme, with restitution quantities to be decided.
David Brend, a promoter of the scheme, additionally faces pending restitution and forfeiture determinations. U.S. Legal professional Damian Williams famous:
David Brend and Gustavo Rodriguez have been central to the IcomTech Ponzi scheme – Rodriguez because the chief architect of its sham web site, Brend as a face-to-face salesman who peddled the bogus enterprise and its supposed profitable returns for buyers. Along with others, Brend and Rodriguez defrauded 1000’s of individuals out of tens of millions of {dollars}. Each have been discovered responsible by a unanimous jury. Now they’ll serve substantial jail sentences for his or her crimes.
Assistant U.S. Legal professional Damian Williams, representing the Southern District of New York, counseled the investigation led by Homeland Safety’s El Dorado Process Drive, alongside contributions from the SEC and CFTC.
Williams highlighted the gravity of the defendants’ actions, noting that they exploited their positions to complement themselves on the expense of 1000’s of victims.
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