A court in California has sentenced five individuals involved in IcomTech's Ponzi scheme to pay over $5 million for fraud and misappropriation of funds stolen through a fraudulent Bitcoin trading scheme.
The default judgment concludes that David Carmona, Juan Arellano Parra, Moses Valdez, and David Brend are liable for all violations of the Commodity Exchange Act and regulations of the Commodity Futures Trading Commission (CFTC) as charged in the lawsuit, while Marco A. Ruiz Ochoa was given a consent order, according to the CFTC statement on December 11.
The default judgment was issued on October 21 from the CFTC's lawsuit filed on May 24, 2023.
These five defrauded over $1 million from 190 individuals in the United States and other countries after falsely promising that they would invest their money in Bitcoin and other cryptocurrencies through a non-existent mining and trading platform.
Instead, they embezzled a large portion of the victims' funds, estimated at around $8.4 million as of December 2022.
Carmona, Arellano Parra, Valdez, and Brend will each pay a civil penalty of $1 million and together with Ochoa, pay about $1 million in restitution to the victims – totaling over $5 million.
All five individuals have been permanently banned from registering with the CFTC and trading on any market regulated by the CFTC.
This comes as Carmona, the founder and 'brain' behind IcomTech's Ponzi scheme, was sentenced to 10 years in prison for conspiracy to commit internet fraud in October.
Rodriguez was sentenced to 8 years on October 31 for participation, while Brend received a 10-year sentence on December 2.
Ochoa was also sentenced to 5 years in prison in January for conspiracy to commit internet fraud.
Operating from mid-2018 to the end of 2019, IcomTech promised a 100% profit after each six-week investment, and the operators often moved throughout the United States and abroad, hosting lavish exhibitions to lure victims into the Ponzi scheme.
They often appeared at these events in expensive cars, dressed in luxury clothing while boasting about profits to convince potential investors that they too could achieve a similar level of financial success.