Former IcomTech CEO Marco Ruiz Ochoa has pleaded guilty to plotting a crypto Ponzi scheme. The Commodity Futures Trading Commission (CFTC) has also brought charges against other IcomTech executives and individuals involved in the case.
The case is currently handled by the Money Laundering and Transnational Criminal Enterprises Unit of the United States Justice Department. According to court filings, IcomTech, founded in 2018 by David Carmona, promised investors daily returns on crypto investment products offered by the entity.
However, this claim was false, as the company did not engage in any crypto trading or mining. “In reality, IcomTech did not engage in cryptocurrency trading or mining for its investors,” prosecutors said, “and OCHOA and IcomTech’s other promoters used victim funds to pay other victims to further promote the schemes and to enrich themselves.”
This makes IcomTech a Ponzi scheme, which is an investment fraud that repays existing investors with funds collected from new investors.
To entice victims, IcomTech dressed in luxury apparel when they hosted events, arriving there in expensive cars. In these events, IcomTech promoters would introduce investment products and compensation plans to potential customers, presenting them as a means of achieving financial freedom.
“The atmosphere of these events was festive and designed to generate excitement about the schemes,” prosecutors said.
In 2018, when victims attempted to withdraw their funds, they encountered several roadblocks — excuses, delays and extra charges.
“Despite these complaints, IcomTech promoters, including Ochoa, continued to promote IcomTech and accept victims’ investments,” prosecutors said.
As complaints mounted, IcomTech began issuing proprietary crypto-tokens for sale, which were promoted as profitable investments once they were widely accepted by companies for payment for goods and services. In reality, the Icom tokens were created to inject liquidity into the company. Prosecutors explained that the tokens were “essentially worthless and resulted in further financial loss.”
By the end of 2019, IcomTech had stopped sending funds to both victims and promoters. They also stopped responding to the complaints from their user base.
Pleading guilty before the U.S. District Judge Jennifer L. Rochon, Ochoa is facing a maximum sentence of 20 years behind bars. His trial is scheduled for February 12, 2024.
The U.S. Justice Department remarked that this case sends a clear message that anyone who seeks to exploit cryptocurrency to commit fraud will face consequences. Individuals and businesses must adhere to regulatory standards to build a safe digital asset market.
“Again and again, we see perpetrators taking advantage of the hype around cryptocurrency to con unsuspecting victims into investing in pyramid schemes,” U.S. Attorney Damian Williams said.
“IcomTech was one of these large-scale copycat cryptocurrency scams, and Ochoa, as the purported CEO, played an important role in taking IcomTech to scale and ultimately harming more victims. Today’s guilty plea sends a clear message that we are coming after all of those who seek to exploit cryptocurrency to commit fraud.”
Victims of the IcomTech fraud are now encouraged to consult the United States Justice Department for updated information regarding the case, victims’ rights and contact information for the victim and witness coordinator.
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