The US District Court for the Central District of California has ordered five individuals to pay more than $5 million in penalties and restitution for their roles in a fraudulent digital asset scheme. The Commodity Futures Trading Commission (CFTC) announced the rulings today, which resolve the enforcement action initiated in May 2023.

The court issued a consent order against Marco A. Ruiz Ochoa of Nashua, New Hampshire, and a default judgment against David Carmona, formerly of Elmhurst, New York; Juan Arellano Parra, formerly of Chino, California; Moses Valdez of Hesperia, California; and David Brend of Tampa, Florida. 

These individuals, operating under the name Icomtech, were found to have solicited over $1 million from 190 individuals by falsely claiming to trade Bitcoin and other digital asset commodities on their behalf.

According to court findings, the defendants promised daily returns of 0.9% to 2.8% and assured customers that their investments would double within eight months. However, no trading occurred as promised. Instead, the funds were misappropriated, causing significant losses for many investors.

The court’s rulings require Carmona, Arellano, Valdez, and Brend to pay over $1 million in restitution to defrauded customers and an additional $1 million in civil monetary penalties each. 

They are also permanently banned from trading in CFTC-regulated markets and registering with the CFTC. Ochoa, who admitted to his role in the scheme, was ordered to pay restitution jointly with the other defendants and faces a lifetime ban on trading and solicitation activities.

The fraudulent activities occurred between August 2018 and December 2019. During this period, the defendants and other Icomtech agents lured customers by falsely claiming they would use funds to trade digital assets and generate high returns. Court documents reveal that some customers lost all their investments due to the scheme.

Parallel criminal proceedings have also resulted in significant penalties. In October 2022, the US Attorney’s Office for the Southern District of New York indicted the defendants for wire fraud related to the Icomtech scheme and broader activities. 

Carmona was sentenced to 10 years in prison and forfeited $329,450, while Ochoa received a five-year sentence and forfeited $914,000. Brend was recently sentenced to 10 years in prison and fined $40,000. Arellano and Valdez await the resolution of their cases.