US Court Hands Down Prison Term as Crackdown on Crypto Investment Fraud Intensifies
A US federal court has sentenced a senior promoter of the IcomTech crypto Ponzi scheme to nearly six years in prison, marking another major conviction tied to one of the most prominent cryptocurrency fraud cases in recent years. The ruling underscores growing enforcement efforts against deceptive crypto investment operations targeting retail investors.
Magdaleno Mendoza, 56, was sentenced to 71 months in prison after pleading guilty to conspiracy to commit wire fraud and illegal reentry into the United States. Prosecutors said Mendoza played a central role in expanding the scheme by recruiting investors and organizing promotional events across multiple states.
Authorities highlighted that Mendoza focused heavily on Spanish-speaking and working-class communities, leveraging trust and limited financial literacy to promote false promises of guaranteed crypto returns.
IcomTech launched in 2018 claiming to operate a crypto mining and trading platform. In reality, investigators determined the business functioned as a classic Ponzi scheme, using funds from new investors to pay earlier participants and finance promoters’ lifestyles.
Court records describe Mendoza as one of the organization’s most senior promoters, who coordinated closely with company leadership and traveled extensively to attract new victims.
Mendoza’s sentence follows stiff penalties for other IcomTech leaders. The scheme’s founder received nearly 10 years in prison, while the former chief executive was sentenced to five years.
In addition to prison time, Mendoza was ordered to pay nearly $790,000 in restitution, forfeit $1.5 million, and surrender ownership of a California property purchased with illicit proceeds.
The case reinforces warnings from regulators that crypto-related fraud carries severe criminal consequences.
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