AirBit Club Co-Founder Sentenced to 12 Years for $100M Crypto Pyramid Scheme
Summary:
The co-founder of AirBit Club, a cryptocurrency platform, has been sentenced to 12 years in prison for his role in a $100 million pyramid scheme that falsely claimed to involve crypto mining. He was also ordered to forfeit over $165 million, including various assets. The remaining defendants have pleaded guilty and are awaiting sentencing. The AirBit Club persuaded investors that they would earn daily returns from cryptocurrency trading and mining and resulted in major losses when withdrawal attempts were met with obstacles and delays.
The co-creator of AirBit Club, a deceptive cryptocurrency platform that defrauded investors of over $100 million, has received a 12-year prison sentence for his involvement in a $100 million deceitful arrangement that falsely claimed to engage in crypto mining. This judgment follows Rodriguez's admission of guilt to charges of conspiracy to commit wire fraud in a US District Court in March, almost seven months ago. The United States Attorney for the Southern District of New York, Damian Williams, expressed in a Sep 26 public announcement that Rodriguez malevolently exploited naive investors with unfounded claims that their investments were funnelled into genuine cryptocurrency dealing and mining operations. “Rather than investing for the investors, Rodriguez concealed the victims’ funds in a sophisticated money laundering operation using Bitcoin, a law firm's trust account, as well as international surrogate and phantom corporations while selfishly squandering the victims’ money," he stated. District Court Judge George B. Daniels also declared that Rodriguez will be supervised for three additional years upon completion of his 12-year prison sentence.
Rodriguez has been mandated to forfeit $65 million, 3,800 Bitcoins (amounting to $100 million), his property in Irvine, California, $900,000 in US currency confiscated from the property, and almost $1 million previously committed to a Gulfstream Jet. The remaining culprits - Dos Santos, Scott Hughes, Cecilia Millan, and Karina Chairez - have admitted guilt and are now waiting for their individual judgments. Established in 2015, AirBit Club falsely promised potential investors that it gained profits from cryptocurrency trading and mining, and investors were guaranteed daily returns on any membership purchased. However, club members encountered problems, delays, and unexpected charges when attempting to withdraw proceeds as early as 2016, and were coerced to bring in new members to secure the projected returns. After an investigation by the United States Homeland Security Investigations, the exploiters of the club, including Rodriguez, were indicted for fraud and money laundering by the Department Of Justice in August 2020. According to a report published on June 28 by blockchain analytics firm TRM Labs, frauds related to cryptocurrency Ponzi and pyramid schemes led to a loss of $7.6 billion in 2022.
Published At
9/27/2023 2:19:00 AM
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