David Carmona, the founder of IcomTech, was sentenced to 10 years in jail for mishandling the funds of investors. The US federal court stated that the CEO would be facing 121 months for running a Ponzi scheme that defrauded numerous investors between 2018 and 2019.
Launched in 2018, IcomTech gained popularity through its promotional events. Carmona promised about 1% daily returns on investments. This scheme was mainly targeted at working-class members. Subsequently, the scheme became a ‘Ponzi’ scheme, where funds from new investors were used to pay off earlier members.
However, several investors raised complaints about the scheme, when they couldn’t withdraw the profits, which accumulated on the portal, citing hidden fees and delays. To curb the situation, a new token called Icoms was released. Carmona stated that this token could be used as a mode of payment, however, it turned out to be a bigger failure. By 2019, the scheme was facing a financial loss and collapsed, leaving many devastated.
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Judge Damian Williams of the Attorney’s Office for the Southern District of New York presided over the case. Williams stated that the IcomTech scheme preyed on vulnerable communities, leaving them in financial ruin. Carmona was ordered to forfeit his assets and provide reparation to the victims. Further, in addition to his prison term, Carmona was sentenced to undergo three years of supervised release.
Ponzi scheme cases are on the rise in the cryptocurrency economy. Earlier in August, Yang Bin, who was once the second richest man in China was sentenced to six years in prison by a Singapore court for mishandling the funds of over 700 investors. The sexagenarian pleaded guilty to eight charges and was fined S$16,000 (approximately $12,000 US dollars.)
