The co-founder of AirBit Club, Rodriguez, played a pivotal role in the $100 million “pyramid scheme” that purported to engage in cryptocurrency mining. This sentencing comes nearly seven months after Rodriguez, also known as the co-founder of AirBit Club, pleaded guilty to wire fraud conspiracy charges in a United States District Court back in March.
In a statement issued on September 26, Damian Williams, the United States Attorney for the Southern District of New York, emphasized how Rodriguez targeted unsophisticated investors with deceptive assurances that their investments were being used for legitimate cryptocurrency trading and mining operations. However, instead of investing on behalf of these investors, Rodriguez concealed their funds within a convoluted money laundering scheme involving Bitcoin, an attorney trust account, international front companies, and shell corporations, ultimately enriching himself at the expense of his victims.
District Court Judge George B. Daniels added an extra three years of supervised release to Rodriguez’s sentence, extending the period of legal scrutiny following his 12-year incarceration.
In addition to his prison sentence, Rodriguez has been ordered to forfeit $65 million, along with a total of 3,800 Bitcoins (BTC) valued at $100 million. Other assets subject to forfeiture include Rodriguez’s Irvine residence in California, $900,000 in U.S. dollars seized from his property, and nearly $1 million that was previously held in escrow for the acquisition of a Gulfstream Jet.
Notably, other co-defendants, including Dos Santos, Scott Hughes, Cecilia Millan, and Karina Chairez, have also entered guilty pleas and are currently awaiting their sentencing verdicts.
AirBit Club, which debuted in 2015, lured prospective investors with promises of returns generated through cryptocurrency mining and trading. Victims were assured of passive, guaranteed daily returns on their memberships. However, as early as 2016, members seeking to withdraw their earnings encountered excuses, delays, and concealed fees. They were even told that recruiting new members was a prerequisite to receiving returns.
The club’s operators, including Rodriguez, faced charges of fraud and money laundering from the Department of Justice (DOJ) in August 2020, following an investigation by the United States Homeland Security Investigations.
According to a report by blockchain intelligence firm TRM Labs on June 28, 2022, cryptocurrency ponzi and pyramid schemes led to losses totaling $7.6 billion in funds during the year.
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