Release Number 8706-23
CFTC Charges Five Defendants with Fraudulent Digital Assets Trading Scheme
May 24, 2023
Washington, D.C. — The Commodity Futures Trading Commission today filed a civil enforcement action in the U.S. District Court for the Central District of California against David Carmona formerly of Elmhurst, New York, Juan Arellano Parra formerly of Chino, California, Moses Valdez of Hesperia, California, David Brend of Tampa, Florida and Marco A. Ruiz Ochoa of Nashua, New Hampshire, all jointly doing business as Icomtech.
The complaint charges the defendants with fraudulently soliciting hundreds of thousands of dollars from more than 170 individuals in the U.S. and other countries for Icomtech to supposedly trade bitcoin and other digital asset commodities for them, and for misappropriating customer funds. The complaint alleges the defendants’ fraud and misappropriation scheme predominately targeted Spanish-speaking communities.
In its continuing litigation against the defendants, the CFTC seeks restitution, disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations, as charged.
The complaint alleges from approximately August 2018 through December 2019, to get actual and prospective customers to give them money, the defendants and other Icomtech agents falsely represented they would use the money to trade Bitcoin and other digital asset commodities for the customers; that Icomtech would provide “daily returns” of between 0.9% to 2.8% on the customers’ money from trading; and Icomtech would double the customers’ money in approximately four to eight months from trading. As alleged in the complaint, in actuality, the defendants did not trade Bitcoin or other digital asset commodities for the customers as they said, and did not earn daily returns nor double the customers’ investments based on trading. Instead, the defendants misappropriated the customer funds, and some customers lost all of their money.
Parallel Criminal Action
On October 13, 2022, the U.S. Attorney’s Office for the Southern District of New York (SDNY) unsealed an indictment charging Carmona, Arellano, Valdez, Brend and Ruiz with wire fraud in connection with the Icomtech scheme. United States v. Carmona, 1:22-cr-00551-JLR (S.D.N.Y October 13, 2022), ECF No. 2 (indictment).
The CFTC appreciates the assistance of the SDNY and Homeland Security Investigations.
The CFTC also acknowledges the assistance of the Florida Office of Financial Regulation.
The Division of Enforcement staff members responsible for this case are Kathleen Banar, Jim Deacon, Kara Mucha, Rick Glaser, and former staff member Philip Tumminio.
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Customers and other individuals can report suspicious activities or information, such as possible violations of commodity trading laws, to the Division of Enforcement via a toll-free hotline 866-FON-CFTC (866-366-2382), file a tip or complaint online, or contact the CFTC Whistleblower Office. Whistleblowers are eligible to receive between 10 and 30 percent of the monetary sanctions collected paid from the CFTC Customer Protection Fund financed through monetary sanctions paid to the CFTC by violators of the CEA.