Six People involved in a cryptocurrency “Ponzi scheme” which brought in $100 million have pleaded guilty to fraud and money laundering charges. Each of them could face between 20 and 30 years in prison.
Pablo Renato Rodriguez, one of the founders of AirBit Club, was the latest defendant to plead guilty to wire fraud conspiracy charges on Mar. 8.
According to the United States Department Of Justice (DOJ), AirBit Club was a fraudulent cryptocurrency mining and trading firm that operated from 2015 to 2020. Executives and promoters convinced victims to believe that they would receive guaranteed passive income and profits on any membership purchased.
The DOJ noted that the operators traveled to the United States, Latin America, Asia, and Eastern Europe to promote AirBit Club at “lavish expos” and advertise their memberships as a way to make money.
Victims reported that they were unable to withdraw funds when they attempted to do so and were asked to “bring new blood” into the AirBit Club network.
U.S. Attorney Damian Williams said that the perpetrators used the proceeds from the scheme to buy luxury cars, houses, and jewelry, while some of the money was used to finance more expos to find new victims.
“The defendants exploited the rising hype surrounding cryptocurrency to scam people out of millions of dollars with false promises that their money would be used for cryptocurrency trading and mining.”
“Instead of trading or mining, the defendants ran a Ponzi scheme and used the victims’ money to line their own pockets,” he added.
The representatives were officially charged Aug. 18, 2020, and since then, senior promoters Cecilia Millan, Jackie Aguilar, and Karina Chairez have all pled guilty to a range of wire fraud conspiracy, bank fraud conspiracy, and money laundering conspiracy charges, while another co-founder, Gutenberg Dos Santos, pled guilty to wire fraud and money laundering conspiracy charges on October 21, 2020, according to the Mar. 8 statement.
The guilty pleas are meant to send the message that “we are coming after all of those who seek to exploit cryptocurrency to commit fraud,” Williams said.
The perpetrators have been ordered to forfeit their fraudulent proceeds from AirBit Club, which include fiat currency, real estate and Bitcoin (BTC), collectively valued at around $100 million.
Cointelegraph discovered that there are still videos of the AirBit Club representatives advertising the membership scheme on YouTube.
The hashtag #AirBitBillionaireClub is often used by the scheme, and false success stories were shared with investors to entice more people to join.
California-licensed attorney Scott Hughes, who is accused of laundering proceeds in the scheme, was also charged with money laundering on Mar. 2.
Rodriguez, Millan, Aguilar, Chairez, and Hughes will be sentenced at different times between June and August 2021.
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