This Crypto Scheme Targeted Working-Class Investors – And Has Landed A Second Executive In Prison

The sentencing comes amid growing scrutiny of crypto scams that have cost investors over $40 billion globally.

• IcomTech promoter Magdaleno Mendoza was sentenced to 71 months in prison and ordered to pay restitution for defrauding investors in a crypto Ponzi scheme.
• The scheme targeted Spanish-speaking, working-class investors, falsely promising daily returns from crypto trading and mining.
• The case highlights persistent risks in high-yield crypto scams, even as digital adoption grows. 

A senior promoter of the collapsed cryptocurrency platform IcomTech has been sentenced to nearly six years in federal prison, marking another high-profile conviction tied to crypto Ponzi schemes that targeted working-class, Spanish-speaking investors with false promises of guaranteed daily returns.

Magdaleno Mendoza, a senior promoter for IcomTech, was sentenced to 71 months in federal prison on Thursday. He was charged with defrauding investors through a fraudulent crypto-mining and trading operation, the Attorney's Office for the Southern District of New York announced.

What Was The IcomTech Scheme?

IcomTech was launched in mid-2018 and collapsed by the end of 2019, and targeted mainly working-class Spanish-speaking investors, leaving many unable to withdraw funds.

The scheme guaranteed daily returns from purported cryptocurrency trading and mining, but instead used new investor funds to pay earlier participants and enrich promoters, the US Attorney’s Office reported.

The report by the United States Attorney’s Office stated that Mendoza was ordered to pay $789,218.94 in restitution and forfeit approximately $1.5 million, including his home in Downey, California, which prosecutors say was purchased with the proceeds of the fraud. 

Second Conviction In Crypto Scheme 

Last year, David Carmona, the founder of IcomTech, was sentenced to 10 years in federal prison after pleading guilty to conspiracy to commit wire fraud for orchestrating a scheme that defrauded investors by falsely promising profits from crypto trading and mining.

The total crypto market cap is over $3 trillion, with Bitcoin dominating 57%. Bitcoin’s price was trading at $88,152.47, up 0.1% over the last 24 hours. On Stocktwits, Bitcoin’s retail sentiment remained in ‘extremely bearish’ territory, accompanied by ‘low’ levels of chatter.

Global Crypto Crime Remains A Major Risk

Separate from the IcomTech case, regulators and blockchain analysts continue to flag similar high-yield crypto schemes operating globally.

Chainalysis 2025 Crypto Crime Report stated that illegal activities in the crypto ecosystem cost about $40.9 billion. The research touched on ongoing high-yield investment scams (HYIS). One of them is Smart Business Corp, a Ponzi scheme that has been going on for ten years and targeted Spanish-speaking countries, especially Mexico. Smart Business Corp added BTC to its investment options in 2022 and guaranteed extremely high profits through a tiered affiliate structure.

That same year, Mexico’s consumer protection agency, CONDUSEF, warned the public that Smart Business Corp was not registered to offer securities in the country. Despite the warning, Chainalysis data shows the scheme has received approximately $1.5 billion in on-chain funds to date.

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