IcomTech Crypto Ponzi Promoter Sentenced to Nearly Six Years in Prison

A senior promoter who helped orchestrate a multimillion-dollar crypto Ponzi scheme targeting Hispanic, working-class investors was sentenced Thursday to 71 months in prison.

Magdaleno Mendoza was sentenced for his role in IcomTech, an alleged crypto mining and trading company that launched in mid-2018 and went bankrupt in late 2019. statement of the United States Attorney’s Office for the Southern District of New York.

The scheme falsely promised guaranteed daily returns from crypto trading mining; instead, it functioned like a classic MLM-style Ponzi scheme, recycling new investor funds to pay previous participants while promoters siphoned off hundreds of thousands of dollars for personal use.

He was also ordered to pay $789,218.94 in restitution and forfeit $1.5 million, along with his home in Downey, California, which was purchased with the proceeds of the scheme.

Mendoza, who had previously promoted at least two other crypto Ponzi schemes, was among IcomTech’s top promoters and maintained regular contact with founder David Carmona.

He even used his own restaurant in the Los Angeles area to host pitch events, raising thousands in cash as promoters toured the country with flashy exhibits, arriving in luxury cars and designer clothes, while victims watched the phantom profits grow in dashboards they had no access to.

Starting in August 2018, withdrawal requests were met with delays, excuses and hidden fees, prompting IcomTech to roll out a proprietary token, “Icoms”, which was falsely touted as valuable for future payments but ultimately worthless, increasing losses for investors.

Ari Redbord, global head of policy at blockchain intelligence firm TRM Labs and former U.S. attorney, said Declutter that such programs exploit real barriers that immigrant communities face.

“Promoters often share a language or cultural background with victims, which reduces skepticism and increases credibility,” Redbord noted. “These programs also exploit real barriers: limited access to traditional financial services, less exposure to warnings from regulators in a person’s primary language, and a heavy reliance on word of mouth.”

Redbord said the 71-month prison sentence is “broadly consistent with how courts treat large-scale crypto-Ponzi fraud today, especially where there is clear intent, significant harm to the victim and sustained promotion.”

“Courts are increasingly focused less on the ‘crypto’ label and more on traditional fraud factors such as size, duration, losses and leadership role,” he added.

The sentence also covered Mendoza’s illegal return after deportation, as he had lived unlawfully in the US for decades, been removed four times (once under a false identity), and then promoted at least three more crypto-Ponzi schemes after IcomTech collapsed.

Several co-conspirators have been separately convicted for their roles in the scheme, including founder David Carmona, alleged CEO Marco Ruiz Ochoa, web developer Gustavo Rodriguez and senior promoters David Brend, Juan Arellano and Moses Valdez.

Redbord noted that repeat promoters remain “one of the toughest challenges” in crypto fraud.

“Many are moving from one plan to another, rebranding the field and targeting new communities, often across platforms and jurisdictions,” he said. “The IcomTech case shows that even when promoters reemerge, their history eventually catches up with them.”