Six persons, each facing a potential term of 20 to 30 years in jail, have admitted to participating in a cryptocurrency “Ponzi scheme” that made nearly $100 million over the course of five years.
On March 8, Pablo Renato Rodriguez, one of the “AirBit Club” founders, became the most recent to admit guilt to accusations of wire fraud conspiracy. According to a statement released on March 8 by the US Department of Justice (DOJ), AirBit Club was a fraudulent cryptocurrency mining and trading company that operated between 2015 and 2020. Its executives and promoters duped unsuspecting investors into thinking that any membership they purchased would guarantee them profits and passive income.
According to the DOJ, the criminals went around the United States, Central America, Asia and Eastern Europe to advertise AirBit at “lavish expos” to induce investors to acquire AirBit Club memberships. Via the AirBit Club online platform, victims observed “earnings” accumulating, but no actual mining or selling ever took place. One victim who attempted to withdraw money was told she needed to “bring new blood” into the AirBit Club program in order to do so.
According to U.S. Attorney Damian Williams, the operators used the victims’ money to buy opulent automobiles, homes, and jewelry. “The defendants took advantage of the growing hype around cryptocurrencies 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 lawsuit reads. “Some of the proceeds were used to finance more expos to recruit more victims too.” The defendants created a Ponzi scheme and stole the victims’ money to line their own pockets, he said, rather than engaging in bitcoin trading or mining on behalf of investors.
On August 18, 2020, the lawmakers were initially formally accused. Since then, senior promoters Cecilia Millan, Jackie Aguilar, and Karina Chairez have all entered guilty pleas to charges of wire fraud conspiracy, bank fraud conspiracy, and money laundering conspiracy on January 31, February 8, and February 22, respectively, while another founder, Gutenberg Dos Santos, did the same on October 21, 2021, according to the March 8 statement.
These guilty pleas send a loud and obvious message that we will pursue anybody who attempts to use cryptocurrencies for fraudulent purposes, Williams continued.
The AirBit Club operators have been forced to relinquish their illicit earnings, which total around $100 million in fiat money, property, and Bitcoin (BTC).