The United States Department of Justice (DOJ) announced a prison sentence for Magdaleno Mendoza, a key figure in a fake cryptocurrency scheme called IcomTech. Mendoza has been sentenced to 71 months (almost 6 years) in federal prison. He was punished for two things: helping with the fraudulent scheme and illegally coming back to the United States after being deported several times.
Details of the Case
The sentence came from US District Judge Paul G. Gardephe. Mendoza pleaded guilty in July to two main charges: conspiracy to commit wire fraud (a crime involving lies and electronic communication to cheat people) and returning illegally after being deported (deportation).
What Was the IcomTech Scheme?
IcomTech presented itself as a business dealing in cryptocurrency (digital money) mining and trading. It started in 2018 and promised guaranteed profits to people who invested money. They claimed investors would get daily returns, but this was all false. Instead of honest investments, IcomTech operated as a Ponzi scheme. A Ponzi scheme is when money from new investors is used to pay older investors, and no real business activity happens in the background.
Mendoza’s Role
Mendoza was not new to such scams; he had been involved in similar schemes before. He played a big part in bringing new people into IcomTech. He targeted Spanish-speaking workers and regular folks unfamiliar with cryptocurrency investing.
Mendoza and other promoters traveled across the U.S., hosting big events and small community meetings. They described IcomTech as a way to achieve “financial freedom”—a chance to make easy money. To make it seem believable, they showcased a flashy lifestyle with luxury cars, expensive clothes, and other displays of wealth.
Mendoza even used his own restaurant in the Los Angeles area to promote the scheme. He held events there and collected large amounts of money in cash from people, promising them profits from their “investments.” To trick investors, IcomTech showed fake online dashboards. These dashboards displayed growing profits, but in reality, most people couldn’t withdraw their money and lost everything they had put in. Meanwhile, Mendoza and other promoters used the new investors’ funds for their personal benefit, taking away hundreds of thousands of dollars.
Fake Tokens and Collapse
When investors started complaining about not being able to withdraw their money, IcomTech introduced their own digital token called “Icoms.” Promoters said that these tokens would become valuable in the future. But the truth was that the tokens were worthless, and this only made the losses worse for investors.
By the end of 2019, IcomTech couldn’t continue paying its investors and eventually shut down. Several people who were part of the scam, including the founder David Carmona and other leaders, have already been convicted and received their own sentences in related cases.
Mendoza’s Immigration History
Besides his role in the IcomTech scam, Mendoza had a long history of living in the U.S. illegally. According to prosecutors, he had been deported and removed from the country at least four times. In one case, he even reentered the U.S. using a fake identity.
This case highlights the risks of putting trust and money into fraudulent schemes like Ponzi schemes. Always research heavily before investing and be cautious with “get-rich-quick” promises.