12/11/2024 | Press release | Distributed by Public on 12/11/2024 12:30
December 11, 2024
WASHINGTON, D.C.- The Commodity Futures Trading Commission today announced U.S. District Court, Central District of California, issued a consent order against Marco A. Ruiz Ochoa of Nashua, New Hampshire, and an order of default judgment on Oct. 21, 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.
The orders stem from the CFTC's May 24, 2023, complaint charging the defendants, jointly doing business as Icomtech, with fraud in connection with their digital asset scheme and misappropriation. [See CFTC Press Release No. 8706-23].
The default judgment order finds Carmona, Arellano, Valdez and Brend liable for all violations of the Commodity Exchange Act and CFTC regulations alleged in the complaint including that they fraudulently solicited over $1 million from 190 individuals in the U.S. and other countries to supposedly trade bitcoin and other digital asset commodities for them, and for misappropriating customer funds. They are required to pay jointly and severally over $1 million in restitution to defrauded customers and to each pay a $1 million civil monetary penalty. The default judgment order also permanently enjoins them from engaging in conduct that violates the CEA, as charged, and permanently bans them from registering with the CFTC and from trading in any CFTC-regulated markets.
The consent order finds, and Ochoa admits, that Ochoa engaged in the fraud scheme with the other defendants. and requires him to pay jointly and severally with the other defendants over $1 million in restitution to defrauded customers. The consent order also imposes a permanent injunction and permanent trading, solicitation, and registration bans against Ochoa.
The court's orders resolve the CFTC's enforcement action against the defendants.
Case Background
The default judgment order against the four defendants and consent order against Ochoa both find that 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 within eight months. The default judgment order and consent order also find 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 their money.
Parallel Criminal Action
On Oct.13, 2022, the U.S. Attorney's Office, Southern District of New York, unsealed an indictment charging the defendants with wire fraud in connection with a much larger scheme, of which the Icomtech scheme the Commission charged was a subset. United States v. Carmona, 1:22-cr-00551-JLR (S.D.N.Y October 13, 2022), ECF No. 2 (indictment).
As a result of that indictment, Carmona and Ochoa pled guilty to the wire fraud charges. Arellano pled guilty to superseding indictment for wire fraud and conspiracy to commit money laundering. After a jury trial, Brend was found guilty of wire fraud. The indictment against Valdez for wire fraud, has yet to be resolved.
In criminal judgments, Carmona was sentenced to 10 years in prison, three years of supervised release, and forfeited over $329,450; Ochoa was sentenced to five years in prison, two years of supervised release, and forfeited $914,000. Both were ordered to pay restitution to victims in an amount yet to be determined. Most recently on Dec. 2, Brend was sentenced to 10 years in prison, three years of supervised release and fined $40,000. The criminal judgment against Arellano is yet to be resolved.
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 responsible for this case are Kathleen Banar, Jim Deacon, Kara Mucha, Erica Bodin, Rick Glaser, and former staff member Philip Tumminio.
-CFTC-