In a cautionary tale for investors, David Carmona, founder of the notorious iComTech Ponzi scheme, has recently pleaded guilty to conspiracy to commit wire fraud, facing up to 20 years in prison. This case underscores a worrying trend that we at FinTelegram expect to see more of, particularly in the wake of the SEC’s recent approval of crypto ETFs. Scammers are typically very competent in using new trends for their fraud business.
iComTech, launched by David Carmona in 2018, was a classic example of a crypto-based MLM (Multi-Level Marketing) Ponzi scheme. It lured investors with the promise of high returns from crypto trading and mining activities. However, the reality was far from the pitch. Investors were promised daily returns of up to 2.8%, a rate that collapsed when the inflow of new investments dried up.
The scheme came undone as co-defendant Marco Ruiz-Ochoa, who was once represented as the CEO of iComTech, pled guilty in September 2023. While Ruiz-Ochoa awaits sentencing, Carmona’s other co-defendants, Juan Arellano, Moses Valdez, and David Brend, are set to face trial in February 2024.
The iComTech saga is a textbook example of how such schemes operate. They offer inflated promises of guaranteed returns from non-existent crypto trading and mining activities. In reality, funds from new investors are used to pay off earlier investors while the promoters enrich themselves. As the scheme grew, victims faced increasing difficulties in withdrawing their investments, encountering excuses, delays, and hidden fees.
An additional layer of deceit was added when iComTech introduced a proprietary crypto token, “Icoms,” falsely claiming it would accrue significant value. This only led to further losses for the investors as these tokens were essentially worthless. By the end of 2019, iComTech collapsed, ceasing all payments to its victims.
The guilty plea of David Carmona is a significant development in this saga, highlighting the risks inherent in the crypto market, especially MLM schemes. With the SEC’s recent approval of crypto ETFs, the market may see a surge in such fraudulent schemes. Investors are advised to exercise due diligence and be wary of schemes offering unrealistic returns.
This case serves as a reminder of the importance of regulatory vigilance and investor education in the evolving landscape of cryptocurrency investment. As the crypto market continues to mature, it is imperative for investors to remain informed and cautious about where and how they choose to invest their funds.
Share Information
If you have any information about crypto or MLM schemes, their actors, and activities, please let us know via our whistleblowing system, Whistle42.
