Senior Promoter of IcomTech Crypto Ponzi Scheme Sentenced to Nearly Six Years in Prison
Magdaleno Mendoza, a senior promoter of the IcomTech crypto Ponzi scheme, has been sentenced to 71 months in federal prison for leading the fraudulent operation marketed as cryptocurrency mining and trading. IcomTech, launched in mid-2018 and collapsed by the end of 2019, operated as a multi-level marketing style Ponzi scheme that paid earlier investors with funds contributed by new participants.
Mendoza was ordered to pay $789,218.94 in restitution and to forfeit $1.5 million. The authorities also seized his residence in Downey, California, which was purchased with proceeds from the scheme. He had a history of illegal residence in the U.S., having lived unlawfully for decades and been removed four times, with the sentence also addressing his illegal reentry after deportation.
The scheme targeted working-class Spanish-speaking investors and involved elaborate efforts to lure victims, including hosting events at Mendoza's Los Angeles-area restaurant, traveling in luxury cars, and using flashy expos. Participants frequently experienced delayed withdrawals and fees. In August 2018, the scheme introduced a proprietary token called Icoms, promoted as valuable for future payments but ultimately worthless.
Other key figures convicted or sentenced separately include founder David Carmona, purported CEO Marco Ruiz Ochoa, web developer Gustavo Rodriguez, and senior promoters David Brend, Juan Arellano, and Moses Valdez. Experts highlighted that such schemes exploit language and cultural barriers and noted that courts increasingly focus on factors like scale, losses, and leadership roles rather than the cryptocurrency label when addressing fraud.
