Convicted of a wire fraud conspiracy, Gustavo Rodriguez and David Brend helped promote and administer the now-collapsed fraudulent cryptocurrency mining and trading business.
Two ex-promoters of the “Ponzi” scam, IcomTech, are now facing up to 20 years in prison after a New York jury found them guilty of wire fraud conspiracy. IcomTech was a claimed cryptocurrency mining and trading firm.
After two weeks of trial, a jury in a New York District Court convicted Gustavo Rodriguez and David Brend of one count each of conspiracy to conduct wire fraud on March 14.
The U.S. Attorney’s Office for the Southern District of New York released a statement on March 15 stating that in mid-2018, IcomTech CEO David Carmona engaged Rodriguez to create a website for the newly-launched IctomTech, which advertised itself as a cryptocurrency mining and trading company.
Carmona, Brend, and others assured ItomTech investors of daily profits guaranteed via crypto trading and mining.
But the government claims the business was running a “Ponzi” scheme that was paying out other investors using the money that investors had put into it rather than selling or mining cryptocurrency.
Investors could visit the site and a portal that Rodriguez ran and get advice from him on the price of “investment packages” as well as falsified daily returns.
Meanwhile, the U.S. Attorney’s Office said that Brend and the other promoters of the scam “siphoned off, in some instances, hundreds of thousands of dollars in victim cash.”
In an effort to entice more investors with the promise of “financial freedom,” the pilfered funds were used to purchase real estate, travel, and host “lavish expos and small community presentations,” where promoters appeared in “luxurious vehicles and wore luxury apparel.”
Investors in IcomTech saw their fake gains rise on the site, but they were “met with excuses, delays, and secret fees” when they tried to transfer the funds. As the number of complaints increased, IcomTech made the unfounded assertion that firms would take a token called “Icoms” as payment in order to generate more funds.
Due to IcomTech’s failure and subsequent stoppage of payment in 2019, Icoms were “basically worthless” and contributed to further losses.
Also Read: Vanguard CEO Opposes Bitcoin ETFs Despite Customer Backlash and Market Volatility
