IcomTech Scheme Collapses as Senior Promoter Sentenced for Fraud

A senior promoter of the IcomTech cryptocurrency Ponzi scheme, Magdaleno Mendoza, was sentenced to 71 months in prison for defrauding primarily working-class, Spanish-speaking investors. Mendoza, who had previously promoted multiple crypto scams, collected investments through in-person events, online portals, and even his own restaurant, promising guaranteed returns that never existed.

IcomTech, launched in 2018, claimed to trade and mine cryptocurrency. In reality, it used incoming investments to pay earlier participants and fund personal expenses, including luxury cars, real estate, and promotional events. Investors saw “profits” in an online portal, but most were unable to withdraw funds. When complaints increased, the promoters introduced a proprietary token called Icoms, falsely marketed as valuable, further exacerbating investor losses. The scheme collapsed by the end of 2019.

Mendoza was ordered to pay $789,218 in restitution and forfeit $1.5 million in illicit gains, including his home in Downey, California. His prosecution highlights the scale and sophistication of modern cryptocurrency fraud, which relies on digital platforms, marketing events, and social networks to reach vulnerable investors.

The IcomTech scheme illustrates how coordinated promotion, technology, and promises of high returns can mask the absence of underlying value. Even as law enforcement pursues perpetrators, the ongoing expansion of crypto-based financial products creates opportunities for similar schemes to emerge rapidly.