- Magdaleno Mendoza was sentenced to 71 months in federal prison for his role in a crypto Ponzi scheme.
- The scheme promised guaranteed returns from mining and trading but collapsed, causing millions in losses.
- Mendoza was ordered to pay nearly $800,000 in restitution and forfeit $1.5 million, including his California home.
- The case highlights the exploitation of immigrant communities by crypto fraudsters who share cultural ties.
- Mendoza’s sentence also covers his illegal reentry into the U.S. after multiple deportations.
Magdaleno Mendoza, a senior promoter of a crypto Ponzi scheme, was sentenced to 71 months in federal prison for his role in defrauding investors. The scheme, linked to IcomTech, operated from mid-2018 until its collapse at the end of 2019 in the U.S. The company falsely promised guaranteed daily returns from cryptocurrency trading and mining.
The scheme was a multi-level marketing (MLM) style Ponzi, where funds from new investors were used to pay earlier participants. Promoters, including Mendoza, took hundreds of thousands of dollars for personal use. Victims, mostly Spanish-speaking working-class investors, faced millions of dollars in losses after withdrawal requests were denied or delayed.
Mendoza was additionally ordered to pay $789,219 in restitution and forfeit $1.5 million, including his residence in Downey, California, bought with the scheme’s proceeds. He had previously promoted at least two other crypto Ponzi schemes and held a senior position within IcomTech. Mendoza maintained frequent contact with the company’s founder, David Carmona, and used his Los Angeles restaurant to host investment pitch events.
Starting August 2018, investor withdrawal requests were met with persistent delays and fees. IcomTech also introduced a proprietary token called “Icoms,” claimed to hold value for future payments but which proved worthless, increasing investor losses.
Ari Redbord, global head of policy at blockchain intelligence firm TRM Labs and former U.S. attorney, remarked to Decrypt that these schemes often exploit immigrant communities. “Promoters often share a language or cultural background with victims, which lowers skepticism and increases credibility,” Redbord said, noting barriers such as limited access to traditional financial services and reduced exposure to regulatory warnings contribute to vulnerability.
The sentence further included Mendoza’s illegal reentry into the U.S. after deportation, given his decades of unlawful residence, four removals—including one under false identity—and promotion of additional Ponzi schemes after IcomTech failed.
Several co-conspirators have been separately convicted, including founders and senior promoters such as David Carmona, Marco Ruiz Ochoa, Gustavo Rodriguez, David Brend, Juan Arellano, and Moses Valdez. Redbord cautioned that repeat promoters pose ongoing challenges in combating crypto fraud. “Many move from one scheme to the next, rebranding the pitch and targeting new communities, often across platforms and jurisdictions,” he stated.
The case demonstrates how persistent enforcement actions can eventually hold such fraudsters accountable.
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