Two key figures behind a cryptocurrency Ponzi scheme known as IcomTech have been sentenced to long prison sentences, according to a recent report. press release By the US Department of Justice.
The scheme defrauded thousands of investors out of millions of dollars, leaving financial devastation in its wake. The ruling represents a major legal outcome for one of the most high-profile cases of cryptocurrency fraud.
IcomTech Scheme Details
David Brind and Gustavo Rodriguez, IcomTech’s main operators, received prison sentences of 10 and eight years, respectively, imposed by Judge Jennifer L. Rochon following a March trial in which they were both convicted of conspiracy to commit wire fraud.
Prosecutors revealed that IcomTech, which launched in mid-2018, disguised itself as a cryptocurrency mining and trading company, promising high daily returns to attract investments. However, in reality, the company was not involved in any legitimate trading or mining activities.
Instead, money raised from investors was used to pay off previous investors in a “classic Ponzi scheme.” Promoters like Brind would flaunt luxury lifestyles, including expensive cars and designer clothes, to attract victims.
Investors were given access to an online portal to monitor the alleged profits, but most were unable to withdraw their money, eventually resulting in the loss of their entire investment.
The US Department of Justice also reveals that Brind and Rodriguez’s scheme did not end there. When complaints mounted among investors, they re-strategized and “began offering private crypto tokens for sale as a way to inject liquidity into IcomTech.”
However, the code, called “Icoms,” was nothing but a hoax. The US Department of Justice wrote in the press release:
Promoters of the schemes claimed that these tokens, known as “Icoms,” would eventually be worth a large sum of money when they were accepted by businesses to pay for goods and services. This was false. In reality, the Icoms were essentially worthless and resulted in further financial losses for victims. By the end of 2019 or so, IcomTech stopped making payments to victims and IcomTech collapsed.
Legal and financial ramifications
Gustavo Rodriguez, who ran the IcomTech website and developed compensation plans, was ordered to pay $40,000 in forfeitures, representing his direct proceeds from the scheme, with restitution amounts to be specified.
David Brind, one of the scheme’s promoters, also faces pending restitution and forfeiture decisions. US Attorney Damian Williams noted:
David Brind and Gustavo Rodriguez were central to the IcomTech Ponzi scheme – Rodriguez as the lead architect of its bogus website, and Brind as a face-to-face salesman promoting the bogus project and its supposedly lucrative returns to investors. Brind and Rodriguez, along with others, defrauded thousands of people out of millions of dollars. Both were found guilty by a unanimous jury. Now they will serve long prison sentences for their crimes.
Assistant U.S. Attorney Damien Williams, representing the Southern District of New York, praised the investigation led by the Department of Homeland Security’s El Dorado Task Force, along with the contributions of the Securities and Exchange Commission and the CFTC.
Williams highlighted the seriousness of the defendants’ actions, noting that they exploited their positions to enrich themselves at the expense of thousands of victims.
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