David Carmona, the founder of IcomTech, has been sentenced for 10 years in prison after prosecutors accused the firm of operating as a cryptocurrency Ponzi scheme. U.S. District Judge Jennifer L. Rochon sentenced Carmona, 41, to 121 months in prison on Friday, according to a statement from the U.S. Attorney’s Office for the Southern District of New York. Carmona previously pleaded guilty to conspiracy to commit wire fraud.
Carmona established IcomTech in 2018, organizing its crypto mining and trading firm operation. He and his co-conspirators stated that entities would make massive returns by buying “cryptocurrency-related investment products.” However, prosecutors explained after that that IcomTech never pursued crypto mining or trading to benefit its investors. However, they spent the money back to earlier investors and took their repayment as a profit, which is also in the structure of a Ponzi scheme.
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Lavish Events Used to Attract Investors
Carmona and his team organized extravagant expos to generate excitement and attract more investors by showcasing IcomTech’s supposed success. Prosecutors stated that the promoters would approach such events in fancy cars, well-dressed, and displaying wealth. The intention was to create an impression of legal and secured revenue generated by IcomTech. But in the background, no real investments in cryptocurrencies were going on.
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U.S. Attorney Damian Williams said in a statement, “David Carmona masterminded the IcomTech cryptocurrency Ponzi scheme, which preyed upon working-class people by promising them complete financial freedom in exchange for parting with their hard-earned money.”
However, as was mentioned, investors started experiencing problems in the second half of 2018 when they tried to cash out. Instead of getting their money back, investors were given tales of woe, diversions, and other shocks in excessive charges. The scheme continued into 2019, but by the end of that year, IcomTech had collapsed, leaving many investors with substantial losses.
Carmona and his promoters continued to accept investments even as the company’s ability to deliver on its promises dwindled. By the time the company failed, many working-class investors had lost their life savings, unable to recover their investments. The sentencing marks a significant step in addressing the fraudulent practices in cryptocurrency, especially for schemes that prey on unsuspecting individuals seeking financial security.
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Maxwell Mutuma
Maxwell is a crypto-economic analyst and Blockchain enthusiast, passionate about helping people understand the potential of decentralized technology. He writes extensively on topics such as blockchain, cryptocurrency, tokens, and more for top publications such as Coingape, Coin Edition, and The Coin Republic. His goal is to spread knowledge about this revolutionary technology and its implications for economic freedom and social good.