A New York jury has convicted two former promoters of alleged cryptocurrency mining and trading company IcomTech of conspiracy to commit electronic fraud - both now face a maximum sentence of 20 years for their roles in a Ponzi scheme.
On March 14, a New York District Court jury found David Brenda and Gustavo Rodriguez guilty on one count each of conspiracy to commit electronic fraud, ending a two-week trial.
The U.S. Attorney's Office for the Southern District of New York said in a March 15 press release that IcomTech founder David Carmona hired Rodriguez in mid-2018 to create a website for the newly launched IctomTech, which advertised itself as a cryptocurrency mining and trading company.
Carmona, Brend and others claimed to ItomTech investors that the company's cryptocurrency trading and mining would provide guaranteed daily profits.
However, prosecutors claim that the company did not actually trade or mine cryptocurrencies - instead, it was a "Ponzi" scheme , in which investors' funds were used to pay other investors.
Rodriguez also advised on the pricing of "investment packages" and false daily returns that investors could access through the site and portal he ran.
Meanwhile, Brend and other supporters of the scheme "in some cases defrauded victims of hundreds of thousands of dollars in funds," the US Attorney's Office said.
The looted funds were used to purchase real estate, travel and organize "lavish exhibitions and presentations for small communities," during which promoters appeared in "expensive cars and luxury clothing" to lure more investors with promises of "financial freedom."
IcomTech investors saw an increase in their fake profits on the portal, but couldn't back out, causing them to "face excuses, delays and hidden fees." As complaints mounted, IcomTech offered a token called "Icoms" to raise additional cash based on the false claim that it would be accepted by companies in payments.
