On October 4, 2024, U.S. District Judge Jennifer L. Rochon sentenced David Carmona, the founder of the fraudulent cryptocurrency scheme IcomTech, to 121 months in prison. This significant announcement was made by Damian Williams, the United States Attorney for the Southern District of New York, as part of ongoing efforts to combat financial fraud within the burgeoning cryptocurrency sector.
What was the Crypto Ponzi Scheme IcomTech?
Carmona’s Ponzi scheme, which began around 2018, targeted vulnerable working-class individuals by promising them financial freedom through investments in cryptocurrency trading and mining.
U.S. Attorney Williams stated, “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.”
He emphasized that Carmona’s claims of doubling victims’ investments within six months were entirely fabricated and highlighted the devastating impact on those who fell victim to the scheme.
IcomTech presented itself as a reputable cryptocurrency mining and trading business, according to court filings. Investors were misled by Carmona and his accomplices into believing that their money would yield daily profits.
IcomTech was not involved in any reputable mining or trading of cryptocurrencies. Instead, the plan used a traditional Ponzi structure, which ultimately caused its collapse, by using money from new investors to settle debts from previous ones.
The promoters of IcomTech made long trips both domestically and abroad, putting up opulent fairs and community talks to draw in new victims. Carmona and his allies presented a picture of wealth and success at these gatherings, coming in fancy cars and dressing opulently to support their claims to be legitimate.
With IcomTech’s alleged investment products, victims were urged to invest their hard-earned money because they believed they were making wise financial decisions and becoming financially independent.
Investors Failed to Withdraw Funds
There were other ways to make investments approved, including wire transfers, cash, checks, and even cryptocurrencies. The victims were given access to an internet site where they were supposed to be able to track their earnings.
The majority of investors, however, discovered that they were unable to take any of the purported benefits, which caused them to become increasingly frustrated and lose money.
While victims saw “profits” accumulating on IcomTech’s legitimate-looking internet platform, many ultimately lost their whole investments. Carmona and other IcomTech marketers embezzled large sums of victim money for their use, which included ostentatious promotional events and opulent luxury purchases.
Several victims reported encountering difficulty when trying to take money out of their accounts as early as August 2018. Promoters frequently responded to complaints with a variety of justifications, delays, and extra charges. Despite these concerns, Carmona and his co-promoters continued to promote IcomTech and make investments.
A proprietary crypto-token called “Icoms” was introduced by IcomTech in a desperate attempt to bring liquidity into the collapsing scheme. The misleading claims made by the token’s promoters were that they would increase in value and be accepted by a number of businesses as payment for products and services. The truth was that “Icoms” were practically useless.
The Prison Time for the Founder
IcomTech stopped paying victims before the end of 2019 and eventually failed as a result of its fraudulent activities. Numerous people who had put their trust in Carmona and his accomplices were impacted by the scheme’s aftermath, which had disastrous financial repercussions for many families.
Carmona, 41, of Queens, New York, was also given a three-year supervised release sentence in addition to her prison term. “Carmona’s days of scamming honest people are at an end, and he now faces substantial time in prison,” stated U.S. Attorney Williams in closing. This instance serves as a clear warning of the dangers of investing in cryptocurrencies and the ability of dishonest schemes to take advantage of gullible people.