- AirBit Club executives to forfeit assets worth $100M after defrauding investors for five years.
- AirBit founders have previously been accused of money laundering scheme by the SEC.
- The six perpetrators are set to be sentenced on different dates between June and August this year.
Six executives of AirBit club have pleaded guilty to fraud and money laundering charges. The executives have been ordered to forfeit their U.S. currency, Bitcoin, and real estate assets valued at $100 million.
According to a report by the Department of Justice, AirBit Club was a sham cryptocurrency mining and trading company operating from 2015 to 2021. They convinced investors they’d make guaranteed passive income in exchange for buying AirBit club memberships.
“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,” the report said.
Investors were given access to the AirBit Club online portal, where they could view their accumulating profit. But in truth, no mining was being carried out. Instead, the perpetrators traveled extravagantly throughout the United States, Asia, Latin America, and Europe.
When investors began demanding their funds, they were asked to bring in new members to make withdrawals. Others were taxed with heavy hidden fees that left them with a fraction of their initial investment. Nevertheless, this is not AirBit’s first Ponzi scheme rodeo.
In 2017, AirBit founders were involved in an SEC investigation related to an investment scheme known as Vizinova. According to the SEC, they had secured investments from 100 investors, with the promise that said investments would yield returns.
However, the SEC revealed that the advertised products did not exist and points accumulated by the victims were worthless. Rodriguez and Santo agreed to pay $1.4 million plus $160,00 in penalties each, although they did not admit to the charges.
AirBit Executives Plead Guilty
AirBit club co-founder Dos Santos was the first to plead guilty in 2021. Senior executives Chairez Millán and Auguliar followed suit on January 31 and February 8. The Ponzi company co-founder, Pablo Remató Rodríguez, was the latest to plead guilty to wire fraud conspiracy charges on March 8.
Scott Hughes, a California attorney who represented the founders in the Vizinova case and assisted in covering up negative comments by netizens, also pleaded guilty to the charges.
Each charge brought against them carries a maximum potential sentence of 30 years in prison.
In a statement, U.S. Attorney Damian Williams said-
“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 pockets. These guilty pleas clearly show that we are coming after all of those who seek to exploit cryptocurrency to commit fraud.”
