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- Four IcomTech executives have been ordered to pay $5 million for running a scam
- The executives stole over $1 million from victims
- IcomTech persuaded the victims to invest in a fake crypto mining and trading platform
The Los Angeles federal court has ordered five IcomTech executives to pay $5 million for running a scam and defrauding victims more than $1 million. IcomTech persuaded victims to invest in a fake crypto mining and trading project with a promise to receive a percentage of the profits. The court found the five guilty of violating the U.S. Commodity Exchange Act and other regulations set by the country’s commodities watchdog, CFTC, marking another instant when regulators catch up with malicious actors in the crypto world.
No Interacting With CFTC-Regulated Products?
The $5 million penalty, however, is the cumulative amount across the five individuals with each paying $1 million. Apart from the fine, the five are prohibited from interacting with any CFTC-regulated products or seeking to be registered by the commodities regulator.
The court said that 190 individuals fell for the IcomTech scam, adding that the victims are from different countries including the United States. Instead of putting the funds into the project as promised, they misused most of it.
Three of the five have already been sentenced to between five and ten years in prison for their roles in running the Ponzi scheme. The scam’s promoter, Gustavo Rodriguez, who is among the five, for example, was in November sentenced to eight years in prison. IcomTech founder David Carmona was sentenced to 10 years in prison in October.
CFTC Fines More Ponzi Scammers
In May 2023, CFTC charged IcomTech operators with fraud. In September 2023, the former IcomTech CEO Marco Ruiz admitted to operating a Ponzi scheme. The fine comes three months after the CFTC ordered an Oregon man to pay $209 million for operating a Ponzi scheme.
With the court imposing a fine and sentencing most, if not all, IcomTech operators, it’s to be seen how much of the stolen funds will be recovered and returned to victims.
