Damian Williams, the USA Legal professional for the Southern District of New York, introduced {that a} jury returned a responsible verdict yesterday in opposition to DAVID BREND and GUSTAVO RODRIGUEZ on one rely of conspiracy to commit wire fraud in reference to BREND’s and RODRIGUEZ’s participation in a large-scale cryptocurrency Ponzi scheme generally known as IcomTech. U.S. District Decide Jennifer L. Rochon presided over the two-week trial.
U.S. Legal professional Damian Williams mentioned: “IcomTech defrauded tens of hundreds of individuals out of tens of thousands and thousands of {dollars}. It supplied the false promise of straightforward riches based mostly on supposed cryptocurrency investments however wound up dishonest working individuals out of their hard-earned cash. Yesterday, David Brend and Gustavo Rodriguez – two people who had been central to the IcomTech Ponzi scheme – had been swiftly convicted by a unanimous jury for his or her function in defrauding IcomTech buyers. This verdict ought to ship a transparent message to those that have interaction in Ponzi schemes — whether or not within the cryptocurrency markets or elsewhere — that this Workplace is dedicated to rooting out fraud in all its varieties and holding these accountable to full account. Now, because of this of their lies to hardworking individuals, Brend and Rodriguez stand convicted of a federal crime and face substantial time in jail.”
In response to the Indictment, public filings, public court docket proceedings, and the proof offered at trial:
IcomTech launched in mid-2018, when co-defendant DAVID CARMONA employed RODRIGUEZ to construct a web site for the scheme. IcomTech was a purported cryptocurrency mining and buying and selling firm that promised to earn its victim-investors earnings in alternate for his or her buy of purported cryptocurrency-related funding merchandise. CARMONA, BREND, and the opposite promoters of IcomTech falsely promised their respective victims, amongst different issues, that earnings from the businesses’ cryptocurrency buying and selling and mining would lead to assured each day returns on victims’ investments. In actuality, IcomTech didn’t have interaction in cryptocurrency buying and selling or mining for its Traders, and BREND and IcomTech’s different promoters used sufferer funds to pay different victims, to additional promote the schemes, and to counterpoint themselves.
IcomTech promoters, together with BREND, traveled all through the USA and overseas, the place they hosted lavish expos and small neighborhood shows geared toward luring victims to put money into the schemes, together with within the Southern District of New York. Throughout larger-scale occasions, IcomTech promoters offered on purported funding merchandise and the compensation plan, inspired victims to speculate as a method of reaching monetary freedom, and boasted concerning the quantity of cash they had been incomes. IcomTech promoters typically confirmed up at larger-scale occasions in costly vehicles and sporting luxurious clothes as a approach of exhibiting their purportedly respectable success from IcomTech. The ambiance of these occasions was festive and designed to generate pleasure concerning the schemes.
Victims invested in IcomTech by buying funding merchandise from promoters utilizing money, checks, wire transfers, and precise cryptocurrency. Following a sufferer’s funding, a sufferer can be supplied with entry to a web-based portal the place the sufferer might monitor the purported returns. Whereas victims noticed “earnings” accumulate on the net portal, most victims had been unable to withdraw any of these so-called earnings and in the end misplaced their total investments. Against this, IcomTech’s promoters, together with BREND, siphoned off, in some instances, lots of of hundreds of {dollars} in sufferer funds, which they withdrew as money, spent on IcomTech promotional bills, and used for private expenditures corresponding to luxurious items and actual property.
RODRIGUEZ labored with CARMONA to run IcomTech’s web site and on-line portal, the place victims had been supplied with private accounts. CARMONA and RODRIGUEZ mentioned the best way to construction IcomTech’s compensation plan and funding merchandise; for instance, RODRIGUEZ suggested CARMONA on the place CARMONA ought to set the purported each day returns on victims’ funding packages and on the dimensions of the funding packages that CARMONA ought to provide on the market.
At least as early as August 2018, victims who tried to withdraw cash from their on-line portal accounts had problem doing so, and after they complained to promoters, they had been met with excuses, delays, and hidden charges, in the event that they had been capable of make any withdrawals in any respect. Regardless of these complaints, IcomTech promoters, together with BREND, continued to advertise IcomTech and settle for victims’ investments, and RODRIGUEZ continued to keep up the web site. As complaints mounted, IcomTech started providing proprietary crypto-tokens on the market as a method of injecting liquidity into IcomTech. Promoters of the schemes claimed that these tokens, generally known as “Icoms,” would ultimately be value a major quantity of cash after they had been accepted by firms for cost for items and companies. This was false. In actuality, “Icoms” had been primarily nugatory and resulted in additional monetary loss to victims. By in or concerning the finish of 2019, IcomTech stopped making funds to victims, and IcomTech collapsed.
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BREND, 49, of Tampa, Florida, and RODRIGUEZ, 47, of North Hollywood, California, had been every convicted of one rely of conspiracy to commit wire fraud, which carries a most sentence of 20 years in jail.
The statutory most sentence is prescribed by Congress and is offered right here for informational functions solely, because the sentencing of the defendants will likely be decided by the choose. BREND is scheduled to be sentenced by Decide Rochon on June 27, 2024, at 10:00 a.m., and RODRIGUEZ is scheduled to be sentenced by Decide Rochon on June 28, 2024, at 10:00 a.m.
Mr. Williams praised the excellent investigative work of Particular Brokers from Homeland Safety Investigations’ El Dorado Process Power. Mr. Williams additionally thanked the Securities and Change Fee and the Commodity Futures Buying and selling Fee for his or her help.
In case you imagine you’re a sufferer of the IcomTech fraud, up to date info relating to the case and victims’ rights, in addition to contact info for the sufferer witness coordinator is obtainable here.
The case is being dealt with by the Workplace’s Illicit Finance & Cash Laundering Unit. Assistant U.S. Attorneys Michael D. Maimin, T. Josiah Pertz, Benjamin A. Gianforti, and Cecilia E. Vogel are in cost of the prosecution.