AirBit Club “ponzi” co-founder sentenced to 12 years in prison ScrgruppEn
The co-founder of AirBit Club — a cryptocurrency pyramid scheme that scammed investors out of more than $100 million — has been sentenced to 12 years in prison for his role in a $100 million “pyramid scheme” allegedly involved in cryptocurrency mining.
The ruling comes nearly seven months after Rodriguez – co-founder of AirBit Club – pleaded guilty to wire fraud conspiracy charges in a US District Court in March.
In a statement on September 26, Damien Williams, US Attorney for the Southern District of New York, said He said Rodriguez “preyed” on inexperienced investors with false promises that their money was invested in legitimate cryptocurrency trading and mining operations.
“Instead of investing on behalf of investors, Rodriguez hid victims’ funds in a complex laundering scheme using Bitcoin, a lawyer’s trust account, international front companies and shell companies, and used the victims’ funds to line his own pockets.”
District Court Judge George B. Daniels ordered three additional years of supervised release for Rodriguez, which will follow a 12-year prison sentence.
.@HSINewYorkThe El Dorado Task Force, the largest anti-money laundering task force in the United States, is proud to have played a vital role in bringing justice to the victims of Pablo Renato Rodriguez and the “AirBit Club” Ponzi scheme. #Homeland Security Investigations #Hosseini https://t.co/UVco4ai3rI
– HSI New York (@HSINewYork) September 26, 2023
The convicted fraudster was ordered to pay forfeiture of $65 million and forfeit other items, including a total of 3,800 bitcoins (BTC) (worth $100 million), Rodriguez’s residence in Irvine, California, $900,000 seized from the property and nearly $1. $1 million was previously held in escrow for a Gulfstream jet.
The other defendants – Dos Santos, Scott Hughes, Cecilia Milan and Karina Shires have also pleaded guilty and are awaiting their sentences.
Related: How to know if a cryptocurrency project is a Ponzi scheme
AirBit Club was launched in 2015. Potential investors were told that AirBit Club generated returns on cryptocurrency mining and trading, and that victims would receive guaranteed negative daily returns on any membership purchased.
However, as early as 2016, club members wanting to withdraw proceeds were met with excuses, delays and hidden fees, and were told they had to recruit new members if they wanted to receive the proceeds.
The club’s operators, including Rodriguez, were charged with fraud and money laundering by the Department of Justice in August 2020 following an investigation by U.S. Homeland Security Investigations.
In 2022, $7.6 billion in money was lost to cryptocurrency Ponzi schemes and pyramid schemes, according to a report released June 28 by blockchain intelligence firm TRM Labs.
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