Six people involved in a cryptocurrency “Ponzi scheme” that raked in about $100 million over five years have pleaded guilty to a series of fraud and money laundering charges, each carrying a maximum sentence of 20 to 30 years in prison.
One of the founders of “AirBit Club,” Pablo Renato Rodriguez, was the latest to plead guilty to wire fraud conspiracy charges on Mar. 8.
According to a Mar. 8 statement from the United States Department of Justice (DOJ), AirBit Club was a fake cryptocurrency mining and trading company operating between 2015 to 2020, where executives and promoters induced victim investors into believing that they’d make guaranteed passive income and profits on any membership purchased.
Operators and attorney of global multi-million-dollar cryptocurrency Ponzi scheme “AirBit Club” plead guiltyhttps://t.co/MT3mM9aqPV
— US Attorney SDNY (@SDNYnews) Mar 8, 2023
According to the DOJ, the perpetrators traveled throughout the United States, Latin America, Asia and Eastern Europe to market AirBit at “lavish expos” to convince investors to purchase AirBit Club memberships.
Victims saw “profits” accumulate on the AirBit Club online portal, but no actual mining or trading was ever carried out. One victim trying to withdraw was asked to “bring new blood” into the AirBit Club scheme in order to withdraw her funds.
US Attorney Damian Williams said the operators used funds from victims to purchase luxurious cars, houses and jewelry. Some of the proceeds were used to finance more expos to recruit more victims too:
“The defendants took advantage of the growing hype around cryptocurrency to con unsuspecting victims around the world out of millions of dollars with false promises that their money was being invested in cryptocurrency trading and mining.”
“Instead of doing any cryptocurrency trading or mining on behalf of investors, the defendants built a Ponzi scheme and took the victims’ money to line their own pockets,” he added.
The representatives were first officially charged Aug. 18, 2020.
Since then, senior promoters Cecilia Millan, Jackie Aguilar and Karina Chairez each pleaded guilty to a series of wire fraud conspiracy, bank fraud conspiracy and money laundering conspiracy charges on Jan. 31, Feb. 8 and Feb. 22, while another founder, Gutenberg Dos Santos, pleaded guilty to wire fraud and money laundering conspiracy charges on Oct. 21, 2021, according to the Mar. 8 statements.
These guilty pleas send a clear message that we are coming after all of those who seek to exploit cryptocurrency to commit fraud,” Williams added.
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The operators have been ordered to forfeit their fraudulent proceeds of AirBit Club, which include fiat currency, real estate and Bitcoin (BTC), collectively valued at about $100 million.
Cointelegraph found there are still videos of the AirBit Club representatives marketing the membership scheme on YouTube.
The scheme often used the hashtag “#AirBitBillionaireClub” and shared several fake success stories of investors to try to lure in more victims.
California-licensed Attorney Scott Hughes, an attorney accused of laundering proceeds of the scheme, also pleaded guilty to money laundering charges on Mar. 2.
Rodriguez, Millan, Aguilar, Chairez and Hughes will be sentenced on different dates between June and August this year.
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