Ex-Executives of Crypto Firm IcomTech Convicted for Wire Fraud Conspiracy in Ponzi Scheme
Summary:
Two former executives of alleged crypto firm IcomTech have been convicted by a New York jury for wire fraud conspiracy. Founders David Brend and Gustavo Rodriguez misled investors with false promises of guaranteed daily returns from crypto trading and mining. Instead, they ran a "Ponzi" scheme to pay off earlier investors with funds from new ones. They also misappropriated sizable sums for luxury spending. The pair faces a sentence of up to 20 years and are set for sentencing in June. The firm's ex-CEO and founder have also previously pleaded guilty to similar charges.
Two ex-executives of the purported crypto mining and trading firm, IcomTech, have been found guilty of wire fraud conspiracy by a New York jury. The conviction ensues from their involvement in a "Ponzi” swindle and now could see them each serving a maximum sentence of two decades. On March 14, following a two-week trial, David Brend and Gustavo Rodriguez were found guilty by a New York District Court jury of one count each of conspiracy to commit wire fraud. The U.S. Attorney’s Office for the Southern District of New York stated on March 15 that David Carmona, the founder of IcomTech, engaged Rodriguez in mid-2018 to create a website for the newly established ItcomTech, positioning itself as a crypto mining and trading company. Carmona, Brend, and others represented to ItomTech's investors that guaranteed daily returns would follow the company’s crypto trading and mining. Prosecutors, however, claim that the firm was not actually engaged in any trading or mining of crypto, but rather, operated a “Ponzi” plot using investor money to pay off other investors. Rodriguez also had a hand in setting the “investment package” prices and the fabricated daily returns, which investors could view on the website and a portal that he operated. Meanwhile, Brend and other promoters of the scheme, according to the U.S. Attorney’s Office, “drained off, in some instances, hundreds of thousands of dollars from victim money.” They used these stolen funds to acquire real estate, fund travels, and throw “lavish expos and small community gatherings,” during which they appeared in “high-end cars and wearing pricey clothing” to attract more investors with the allure of “financial liberation.” While IcomTech investors witnessed their artificial profits grow in the portal, they were unable to withdraw and faced "excuses, delays, and hidden costs.” In the face of mounting complaints, IcomTech offered a token named “Icoms” to bring in additional funds under a false claim that it would be recognized by companies in payment transactions. The "Icoms" were ultimately “worthless” and led to deeper financial losses when IcomTech collapsed in 2019 and ceased making payments. The U.S. Attorney for the Southern District of New York, Damian Williams, condemned the scheme that “swindled tens of thousands of people out of tens of millions of dollars,” depriving “working-class individuals of their hard-earned money.” He added, “Due to their deceit targeted at hardworking people, Brend and Rodriguez stand accused of a federal crime and confront significant prison time.” Brend is set for sentencing on June 27, with Rodriguez slated for June 28. Previously in January, Marco Ochoa, the former CEO of IcomTech, was given a five-year prison sentence after admitting to conspiracy to wire fraud conspiracy, and in December, Carmona, the founder, admitted guilt to wire fraud conspiracy.
Published At
3/18/2024 8:24:38 AM
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