Magdaleno Mendoza, a key player in the elaborate IcomTech cryptocurrency Ponzi scheme, was sentenced to 71 months in prison for conning investors and reentering the U.S. illegally after deportation. The announcement came from United States Attorney for the Southern District of New York, Jay Clayton. According to a press release from the U.S. Attorney's Office, Southern District of New York, Mendoza pled guilty in July to wire fraud conspiracy and illegal reentry, and on December 18th, he faced his reckoning in court.
Falling in step with his co-conspirators who have already been convicted and sentenced, Mendoza took a prominent role in bilking investors—many of whom were working-class, Spanish-speaking New Yorkers with limited investment savvy. In a statement obtained by the U.S. Attorney’s Office, Jay Clayton laid it down simply: "By exploiting trust and the promise of ‘crypto,’ he and his co-conspirators stole millions from working-class people. Today’s sentence provides a measure of justice."
The scheme, which began in mid-2018 and collapsed by the end of 2019, roped in victims with the allure of guaranteed daily returns from cryptocurrency mining and trading. As it turned out, IcomTech did not to actually engage in any of the promised activities. Instead, investors' money was used to pay other investors, maintaining the facade of a profitable venture and lining the pockets of Mendoza and others involved. Mendoza's personal take included hosting promotional events at his Greater Los Angeles restaurant and flashing luxury status symbols, thus seducing further investment from his unsuspecting victims.
Chalked up with smooth talk and high promises, the loss to victims was tangible—houses, life savings, trust. These IcomTech events, heavily geared towards audiences inexperienced in cryptocurrency, were flamboyant lies on wheels, cruising from the Southern District of New York to Los Angeles, with Mendoza at the helm. The court documents reveal that most investors were unable to withdraw any "profits" from their online portals, and when IcomTech introduced its own valueless crypto-token, "Icoms," it only deepened the financial injury inflicted.
Mendoza, not content to simply to fall down after IcomTech's demise, promoted at least three other cryptocurrency Ponzi schemes. The 56-year-old Mexico native was residing and operating illegally in the U.S., already booted out of the country four times beforehand, once under a false name. The punishment extends beyond prison time: he must also pay restitution to the tune of $789,218.94 and give up $1,500,000 in forfeiture, not to mention his Downey, CA residence—a fruit of his fraudulent labor.
Praise for the case’s resolution was directed toward the Special Agents from Homeland Security Investigations’ El Dorado Task Force, by Mr. Clayton. The U.S. Attorney's Office also acknowledged the aid of the Securities and Exchange Commission and the Commodity Futures Trading Commission. The prosecution was brought to a close by Assistant U.S. Attorneys Michael D. Maimin, T. Josiah Pertz, and Cecilia E. Vogel of the Office's Illicit Finance and Money Laundering Unit.
