A senior promoter who helped orchestrate a multimillion-dollar crypto Ponzi scheme targeting working-class Spanish-speaking investors was sentenced Thursday to 71 months in federal prison.
Magdaleno Mendoza received a sentence for his role in IcomTech, a purported crypto-mining and trading company that launched in mid-2018 and collapsed by the end of 2019, according to a statement from the U.S. Attorney’s Office for the Southern District of New York.
The scheme falsely promised guaranteed daily returns from crypto trading and mining; instead, it operated as a classic MLM-style Ponzi scheme that recycled new investor funds to pay earlier participants, while promoters siphoned 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 Downey, California, residence, which was purchased with scheme proceeds.
Mendoza, who had previously promoted at least two other crypto Ponzi schemes, was among IcomTech’s most senior promoters and maintained regular contact with founder David Carmona.
He even used his own restaurant in the Los Angeles area to host pitch events, collecting thousands in cash, as promoters toured the country with flashy expos, arriving in luxury cars and designer clothes while victims watched phantom “profits” grow in dashboards they couldn’t access.
Beginning in August 2018, withdrawal requests were met with delays, excuses, and hidden fees, prompting IcomTech to roll out a proprietary token, “Icoms,” falsely touted as valuable for future payments but ultimately worthless, deepening investor losses.
Ari Redbord, global head of policy at blockchain intelligence firm TRM Labs and former U.S. attorney, told Decrypt that such schemes exploit real barriers facing immigrant communities.