Co-Founder of AirBit Club Sentenced to 12 Years for Cryptocurrency Ponzi Scheme

Key Takeaways

  1. Pablo Renato Rodriguez, co-founder of AirBit Membership, sentenced to 12 years in jail.
  2. Rodriguez and co-defendants ordered to forfeit roughly $100 million in belongings.
  3. Co-defendants await sentencing; earlier involvement in pyramid schemes revealed.

Background and Conviction

Pablo Renato Rodriguez, co-founder of AirBit Membership, was sentenced to 12 years in jail on September 26, 2023, by U.S. District Decide George B. Daniels. The sentencing was introduced by Damian Williams, america Legal professional for the Southern District of New York. Rodriguez was convicted for his function in orchestrating a world pyramid scheme by way of AirBit Membership, a purported cryptocurrency mining and buying and selling firm. The co-defendants, Gutemberg Dos Santos, Scott Hughes, Cecilia Millan, and Karina Chairez, have pled responsible and are awaiting sentencing.

Misleading Practices

AirBit Membership was based in 2015 by Rodriguez and Dos Santos. They falsely promised traders assured income in trade for money investments in membership memberships. The corporate was marketed as a multilevel advertising membership within the cryptocurrency trade. Nonetheless, no precise Bitcoin mining or buying and selling happened on behalf of the traders. As a substitute, Rodriguez and his co-conspirators used the cash for private bills and to finance extra recruitment occasions.

Asset Forfeiture

Rodriguez and his co-defendants have been ordered to forfeit their fraudulent proceeds, which embody belongings consisting of U.S. forex, Bitcoin, and actual property at present valued at roughly $100 million.

Earlier Authorized Troubles

Earlier than AirBit Membership, Rodriguez and Dos Santos have been sued by the Securities and Alternate Fee (SEC) for an additional pyramid scheme generally known as Vizinova, and paid $1.7 million in disgorgement and fines.

Upcoming Sentencings

Dos Santos, Millan, Chairez, and Hughes have pled responsible to expenses together with wire fraud conspiracy, cash laundering conspiracy, and financial institution fraud conspiracy. They’re scheduled to be sentenced in early October 2023.

Cryptocurrency Ponzi schemes are usually not unusual in a world the place regulatory oversight continues to be catching up. On September 28, 2022, the U.S. Legal professional’s Workplace introduced the eighth distribution of over $4 billion to victims of the Madoff Ponzi scheme, which was not cryptocurrency-related however serves as a reminder of the recurring nature of such fraudulent schemes.

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Picture supply: Shutterstock

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