A Mexican national who lured individuals to invest hundreds of thousands of dollars by promising guaranteed daily returns from a fictitious cryptocurrency mining and trading company was sentenced to 71 months in prison, the US Attorney for the Southern District of New York said in a press release.
Crypto Ponzi-Scheme Promoter Gets 71-Month Prison Term in US
19 December 2025 - 11:04 CET
By Sandmark staff
False promises
Magdaleno Mendozo, 56, pled guilty in July 2025 to conspiracy to commit wire fraud, and was also convicted for illegal reentry into the US after he was deported, prosecutors said. He was ordered to pay almost $800,000 in restitution to his victims and forfeited another $1.5mn plus an interest in his Downey, CA residence, they said.
Six of Mendoza’s co-conspirators were sentenced previously. They promoted a company they called IncomTech, which falsely promised that profits from its cryptocurrency trading and mining would result in "guaranteed daily returns on victims’ investments,” the release said.
Lavish expos
The scheme mostly targeted working-class, Spanish-speaking victims “who had little to no prior experience with cryptocurrency," the US Attorney’s office said. The group did not engage in actual crypto trading or mining but used investors' funds to repay other victims, a classic Ponzi tactic.
The scheme used “lavish expos and small community presentations” to attract victims, with the promoters spending the funds they received on expensive cars and luxury clothing to present the illusion that the company was successful. Mendoza was described as a senior promoter, who moved on to shill at least three other cryptocurrency Ponzi schemes after IncomTech stopped making payments to victims by around the end of 2019, and collapsed.
Crypto fraud uptick
Financial fraud using digital assets as a lure has been on the rise globally. In the US, total reported losses from all cryptocurrency-related crimes in 2024 was about $9.3bn, a 66% increase from the previous year, according to the FBI. Cryptocurrency investment fraud alone amounted to more than $5.8bn.
In another case of a cryptocurrency investment fraud, federal agents seized nearly $8.5mn worth of the stablecoin Tether after tracing the seized funds to a cryptocurrency address allegedly linked to money stolen from victims of “pig butchering” scams, according to a press release from the US Attorney's Office for the Eastern District of North Carolina.
Tether tactic
The scheme involved criminals who built trust with victims through a business or romantic relationship, claiming they could help generate large profits trading cryptocurrency. The fraud included fictitious crypto trading platforms which “displayed fabricated investment portfolios with abnormally large returns to entice victims to invest more money”.
The victims were unable to withdraw their funds as the fraudsters sometimes demanded a tax or penalty, and even sometimes offered cryptocurrency recovery services for an upfront fee, “further compounding the injury”, the release said.
