- Pablo Renato Rodriguez, co-founder of the cryptocurrency ponzi scheme AirBit Club, has been sentenced to 12 years in prison for his role in the worldwide scheme.
- Rodriguez is also required to forfeit a significant amount of money and property, including nearly $1 million, Bitcoin, cash, his Irvine home, watches, jewelry, and more Bitcoin from various wallets.
- Other executives and promoters involved in AirBit Club have also pleaded guilty. They are yet to be sentenced and may face a maximum of 70 years in prison.
More than half a year after its executives pleaded guilty, the co-founder of the global multimillion-dollar cryptocurrency ponzi scheme AirBit Club, Pablo Renato Rodriguez, was sentenced to 12 years in prison for orchestrating the worldwide scheme.
Prior to the sentencing, Rodriguez pleaded guilty last March to charges of wire fraud conspiracy, money laundering conspiracy and bank fraud conspiracy.
The announcement of the sentence was made via a press release on the website of the United States Attorney’s Office for the Southern District of New York.
In addition to the 12 years of imprisonment, he was also sentenced to three years of supervised release as part of his punishment. Rodriguez also has to give up a lot of money and property, including nearly $1 million, some Bitcoin, cash, his home in Irvine, watches, jewelry, and more Bitcoin from different wallets.
“Rodriguez co-founded and led an international multimillion-dollar pyramid scheme that preyed on mostly unsophisticated investors with false promises that their money was being invested in cryptocurrency trading and mining. Instead of investing on behalf of investors, Rodriguez hid victims’ money in a complex laundering scheme using Bitcoin, an attorney trust account, and international front and shell companies and used victims’ money to line his own pockets,” U.S. Attorney Damian Williams stated.
Williams also emphasized that Rodriguez is one of many recent cases of people exploiting cryptocurrency to commit fraud. According to him, his sentence should deter anyone who may be tempted to defraud others with false promises of cryptocurrency investments.
What Happened to the Other Executives?
The remaining executives of AirBit, with co-founder Gutemberg Dos Santos, who was extradited to Panama in 2020, have all entered guilty pleas. Earlier this year, promoters of the platform, Cecilia Millan, Karina Chairez, and Jackie Aguilar, also pleaded guilty.
Additionally, Scott Hughes, the attorney who assisted the founders in money laundering, entered his guilty plea on March 2.
As a part of their plea, the defendants had to surrender their unlawfully obtained proceeds, which encompass U.S. currency, bitcoin, and real estate.
Moreover, the lawyers noted that Rodriguez and Dos Santos were previously sued by the SEC for perpetrating a pyramid investment scheme known as Vizinova and paid $1.7 million in disgorgement and fines. Hughes, represented them in the Vizinova SEC action and then aided them in perpetrating the AirBit Club Scheme by helping to remove negative information about AirBit Club and Vizinova from the internet.
Dos Santos, Millan, Chairez, and Hughes are yet to be sentenced, each of them may face a maximum 70 years in prison. Millan, Chairez, and Hughes are set to be sentenced on October 3, 2023, while Dos Santos is scheduled for sentencing on October 4, 2023.
(Read more: Philippines SEC Issues Advisory Against Airbit Club)
What is the AirBit Club Scheme?
AirBit Club was founded in 2015 by Rodriguez and Dos Santos; they persuaded victim-investors to invest in AirBit Club under the false promise of guaranteed profits through cash investments in club “memberships.” They marketed it as a cryptocurrency multilevel marketing club, falsely claiming that AirBit Club generated returns through cryptocurrency mining and trading, offering victims passive, guaranteed daily returns.
Along with promoters like Millan and Chairez, the two traveled globally to host events and convince victims to purchase memberships. After investing, victims were given access to an online portal displaying supposed membership returns.
The Attorney’s Office highlighted that the offered returns were fictitious, with no actual Bitcoin mining or trading occurring. Instead, the people behind Airbit enriched themselves, buying luxury items, cars, and homes, and funding expos to recruit more victims.
Victims who attempted to withdraw funds faced delays, hidden fees, and excuses. In April 2020, some victims were falsely told that their accounts were closed due to the COVID-19 pandemic.
According to the statement, the defendants used a variety of methods to hide their scheme and the proceeds, including having victims purchase memberships with cash, using third-party cryptocurrency brokers, and laundering funds through various bank accounts, including an attorney trust account managed by Hughes. This account was intended to be used for Hughes’ law practice’s client funds, but it was instead used to conceal the illicit proceeds and finance AirBit Club’s promotion.
In 2018, the Philippine SEC issued an advisory against AirBit Club, noting that the company was offering illegal online investments to the public. The SEC warned that AirBit Club was not registered with the commission and that its investment scheme resembles Ponzi.
This article is published on BitPinas: AirBit Club Co-Founder Sentenced To 12 Years In Prison
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