IcomTech cryptocurrency Ponzi scheme mastermind sentenced to nearly six years in prison, involved in millions of dollars

The U.S. Department of Justice recently issued a verdict on a well-known cryptocurrency Ponzi scheme. The Southern District of New York Federal Prosecutor’s Office announced that Magdaleno Mendoza, one of the core promoters of the IcomTech cryptocurrency scam, was sentenced to 71 months in federal prison, approximately nearly six years, and is also liable for substantial financial restitution.

Prosecutors disclosed that IcomTech was established in mid-2018, claiming to be a cryptocurrency mining and trading company, promising investors “daily stable returns.” In reality, the project operated entirely as a pyramid-style Ponzi scheme, using funds from new investors to pay early participants, while core members continued to cash out. The scam primarily targeted Spanish-speaking wage earners, resulting in millions of dollars in losses, and collapsed at the end of 2019.

The court ordered Mendoza to pay approximately $789,000 in restitution to victims, confiscate $1.5 million in illegal proceeds, and seize a property he purchased in California’s Dony area, which was directly bought with scam funds. Investigations also revealed that Mendoza had promoted at least two other cryptocurrency Ponzi projects prior to IcomTech, making him a typical “professional” crypto scam promoter.

During the operation of the scam, Mendoza used his restaurant in the Los Angeles area to hold offline roadshows, collecting large amounts of cash directly. Meanwhile, the IcomTech promotional team toured across the U.S. hosting luxurious promotional events to create an image of “successful wealth,” while investor accounts’ so-called earnings remained unwithdrawable. To delay issues, IcomTech also launched an internal token called “Icoms,” claiming it could be used for payments in the future, but its value eventually plummeted to zero, further increasing losses.

Blockchain intelligence company TRM Labs’ Global Policy Director and former federal prosecutor Ali Redbod pointed out that such crypto scams often exploit the real-world barriers faced by immigrant groups in language, financial services, and regulatory information access, reducing victims’ vigilance through cultural and trust relationships. He stated that the 71-month sentence aligns with the current sentencing trend in U.S. courts for large-scale cryptocurrency Ponzi schemes, where authorities are no longer focusing solely on the “crypto” label but are paying more attention to the scale of fraud, duration, and degree of victimization.

It is noteworthy that the verdict also involves Mendoza’s illegal entry into the U.S. after multiple deportations. Several accomplices, including IcomTech founders and senior promoters, have already been convicted. This case sends a clear signal to the market: promoters repeatedly involved in cryptocurrency scams will ultimately pay a heavy price for their actions.