Lavish Lifestyle, Fake Profits: IcomTech Promoter Jailed in Crypto Scam Case

According to the Justice Department, IcomTech falsely marketed crypto mining profits while promoters pocketed investor funds.

The U.S. Department of Justice announced that Magdaleno Mendoza, a senior promoter of the cryptocurrency Ponzi scheme IcomTech, has been sentenced to 71 months in prison for his role in the fraud and for illegally re-entering the United States after multiple deportations.

The sentence was imposed by U.S. District Judge Paul G. Gardephe following Mendoza’s guilty plea in July to conspiracy to commit wire fraud and illegal reentry.

IcomTech Ponzi scheme

According to the official statement, Mendoza was one of the most influential promoters of IcomTech, an alleged crypto mining and trading company that launched in mid-2018 and falsely promised investors guaranteed daily returns. In reality authorities saidThe company operated as a multi-level Ponzi marketing scheme that used money from new investors to pay previous participants and enrich its promoters, without conducting any legitimate trading or mining activities.

Mendoza, who had previously promoted similar schemes, played a central role in recruiting victims, especially within Spanish-speaking working-class communities with little experience investing in cryptocurrency. He and other promoters are said to have traveled throughout the United States. They organized large expos and small community gatherings, where they marketed IcomTech as a path to “financial freedom” and presented luxury cars, clothing and lifestyles to boost credibility.

Prosecutors said Mendoza personally hosted promotional events at his Los Angeles-area restaurant and collected thousands of dollars in cash from the victims as supposed investments. Investors were given access to online dashboards showing steadily growing “profits,” but most were unable to withdraw funds and ultimately lost their entire investments, while promoters siphoned off hundreds of thousands of dollars for personal use.

Worthless tokens, prison sentences and deportations

As complaints about withdrawals increased, IcomTech introduced a proprietary token known as “Icoms,” which its promoters claimed would gain significant value. But authorities said the tokens were effectively worthless and increased losses for investors.

By the end of 2019, IcomTech had stopped paying and collapsed. The Justice Department also found that several of Mendoza’s co-conspirators, including founder David Carmona and other high-ranking figures, have already been convicted in related cases.

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Prosecutors also said Mendoza had lived illegally in the United States for decades while promoting the scheme and had been deported or removed at least four times, including once under a false identity.