IcomTech Executives to Pay $5 Million in Restitution for Defrauding Investors with False Crypto Promises

A federal court ordered five people associated with IcomTech, a cryptocurrency Ponzi scheme that defrauded investors of $8.4 million, to pay more than $5 million in restitution and penalties.

The Dec. 11 ruling by the U.S. District Court for the Central District of California also included prison sentences for three of the defendants.

Operating between 2018 and 2019, IcomTech promoted itself as a cryptocurrency platform offering daily returns of up to 2.8%. Investors were convinced that their funds were being used for cryptocurrency trading and mining, facilitated through “Icoms,” a proprietary token. However, researchers found no evidence of such activities. Instead, the defendants misused the funds for personal expenses, including luxury items and high-end vacations.

David Carmona, leader of the plan, together with his partner David Brend, received Prison sentences of 10 years. Another conspirator, Marco A. Ruiz Ochoa, was sentenced to five years. Two additional defendants, Juan Arellano Parra and Moisés Valdez, were held liable through financial sanctions and were permanently prohibited from engaging in any activity regulated by the CFTC.

The Commodity Futures Trading Commission (CFTC) began its investigation into IcomTech in 2023 following complaints from defrauded investors. The case highlighted a common pattern in cryptocurrency fraud, where victims are lured by promises of outsized returns and persuaded to recruit others, fueling a cycle of deception.

The court also ordered the forfeiture of more than $1.2 million in assets linked to the defendants. Despite this recovery, many victims are unlikely to recover all of their losses.