AirBit Club 'ponzi' co-founder gets 12 years prison

The co-founder of AirBit Club — a cryptocurrency pyramid strategy that swindled investors of implicit $100 cardinal — has been sentenced to 12 years successful situation for his relation successful a $100 cardinal "pyramid scheme"  that purported to beryllium progressive successful crypto mining. 

The sentencing comes astir 7 months aft Rodriguez — the co-founder of AirBit Club — pleaded blameworthy to ligament fraud conspiracy charges successful a United States District Court successful March.

In a Sept. 26 statement, Damian Williams, United States Attorney for the Southern District of New York said Rodriguez “preyed” connected unsophisticated investors with mendacious promises that their funds were invested into morganatic cryptocurrency trading and mining operations.

“Instead of investing connected behalf of investors, Rodriguez hid victims’ wealth successful a analyzable laundering strategy utilizing Bitcoin, an lawyer spot account, and planetary beforehand and ammunition companies and utilized victims’ wealth to enactment his ain pockets.”

District Court Judge George B. Daniels imposed an further 3 years of supervised merchandise for Rodriguez, which volition travel his 12-year situation sentence.

.@HSINewYork's El Dorado Task Force, the largest anti-money laundering task unit successful the US, is arrogant to person played a captious relation successful delivering justness to the victims of Pablo Renato Rodriguez and the fraudulent "AirBit Club” Ponzi Scheme #HomelandSecurityInvestigations #HSINY https://t.co/UVco4ai3rI

— HSI New York (@HSINewYork) September 26, 2023

The convicted fraudster was ordered to wage a forfeiture of $65 cardinal and to forfeit different items, including a full of 3,800 Bitcoins (BTC) (worth $100 million), Rodriguez’s Irvine residence successful California, $900,000 successful U.S. dollars seized from the spot and astir $1 cardinal antecedently held successful escrow for a Gulfstream Jet.

The different defendants — Dos Santos, Scott Hughes, Cecilia Millan and Karina Chairez person besides pleaded blameworthy and are awaiting sentencing verdicts.

Related: How to archer if a cryptocurrency task is simply a Ponzi scheme

AirBit Club was launched successful 2015. Prospective investors were told that AirBit Club earned returns connected cryptocurrency mining and trading and that victims would gain passive, guaranteed regular returns connected immoderate rank purchased.

However, arsenic aboriginal arsenic 2016, nine members wishing to retreat proceeds were met with excuses, delays and hidden fees and told they indispensable enlistee caller members if they wanted to person the returns.

The operators of the club, including Rodriguez were charged with fraud and wealth laundering by the DOJ successful August 2020 aft a probe by the United States Homeland Security Investigations.

In 2022, $7.6 cardinal successful funds were lost to cryptocurrency ponzi and pyramid schemes, according to a June 28 study by blockchain quality steadfast TRM Labs.

Magazine: Unstablecoins: Depegging, slope runs and different risks loom