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The co-founder of AirBit Club \u2014 a cryptocurrency pyramid scheme that swindled investors of over $100 million \u2014 has been sentenced to 12 years in prison for his role in a $100 million “pyramid scheme”\u00a0 that purported to be involved in crypto mining.\u00a0<\/p>\n
The sentencing comes nearly seven months after Rodriguez \u2014 the co-founder of AirBit Club \u2014 pleaded guilty to wire fraud conspiracy charges<\/a> in a United States District Court in March. <\/p>\n In a Sept. 26 statement, Damian Williams, United States Attorney for the Southern District of New York said<\/a> Rodriguez \u201cpreyed\u201d on unsophisticated investors with false promises that their funds were invested into legitimate cryptocurrency trading and mining operations.<\/p>\n \u201cInstead of investing on behalf of investors, Rodriguez hid victims\u2019 money in a complex laundering scheme using Bitcoin, an attorney trust account, and international front and shell companies and used victims\u2019 money to line his own pockets.\u201d<\/p><\/blockquote>\n District Court Judge George B. Daniels imposed an additional three years of supervised release for Rodriguez, which will follow his 12-year prison sentence.<\/p>\n .@HSINewYork<\/a>‘s El Dorado Task Force, the largest anti-money laundering task force in the US, is proud to have played a vital role in delivering justice to the victims of Pablo Renato Rodriguez and the fraudulent “AirBit Club\u201d Ponzi Scheme #HomelandSecurityInvestigations<\/a> #HSINY<\/a> https:\/\/t.co\/UVco4ai3rI<\/a><\/p>\n \u2014 HSI New York (@HSINewYork) September 26, 2023<\/a><\/p><\/blockquote>\n The convicted fraudster was ordered to pay a forfeiture of $65 million and to forfeit other items, including a total of 3,800 Bitcoins (BTC)<\/a> (worth $100 million), Rodriguez\u2019s Irvine residence in California, $900,000 in U.S. dollars seized from the property and nearly $1 million previously held in escrow for a Gulfstream Jet.<\/p>\n The other defendants \u2014 Dos Santos, Scott Hughes, Cecilia Millan and Karina Chairez have also pleaded guilty and are awaiting sentencing verdicts.<\/p>\n Related: <\/em><\/strong>How to tell if a cryptocurrency project is a Ponzi scheme<\/em><\/strong><\/a><\/p>\n AirBit Club was launched in 2015. Prospective investors were told that AirBit Club earned returns on cryptocurrency mining and trading and that victims would earn passive, guaranteed daily returns on any membership purchased.<\/p>\n However, as early as 2016, club members wishing to withdraw proceeds were met with excuses, delays and hidden fees<\/a> and told they must recruit new members if they wanted to receive the returns.<\/p>\n The operators of the club, including Rodriguez were charged<\/a> with fraud and money laundering by the DOJ in August 2020 after a probe by the United States Homeland Security Investigations.<\/p>\n In 2022, $7.6 billion in funds were lost<\/a> to cryptocurrency ponzi and pyramid schemes<\/a>, according to a June 28 report by blockchain intelligence firm TRM Labs.<\/p>\n Magazine: <\/em><\/strong>Unstablecoins: Depegging, bank runs and other risks loom<\/em><\/strong><\/a><\/p>\n<\/div>\n\n