Last Updated on 2 weeks by Ameer Hamza
The co-founder of the cryptocurrency Ponzi scheme AirBit Club, who defrauded investors of over $100 million, has recently been sentenced to a 12-year prison term.
Seven months earlier, in March, Pablo Rodriguez, one of the co-founders of AirBit Club, pleaded guilty to wire fraud plot charges in a U.S. district court.
Cryptocurrency Ponzi Scheme: AirBit Club Co-Founder Gets 12-Year Prison Sentence
In a statement on September 26, the United States Attorney for the Southern District of New York, Damian Williams, detailed how Rodriguez had taken advantage of inexperienced investors by making false promises that their money would be invested in legal cryptocurrency trading and mining companies.
Instead of investing on behalf of these individuals, Rodriguez used an elaborate money-laundering plan that included Bitcoin, an attorney trust account, international front companies, and shell companies. He then misappropriated these funds for his gain.
According to District Court Judge George Daniels, Rodriguez will serve a further three years of supervised release after a 12-year jail term.
The largest anti-money laundering task force in the U.S., @HSINewYork’s El Dorado Task Force, stated in a tweet posted on their “X,” formerly Twitter, page on September 26, 2023, that they are pleased to have contributed significantly to bringing justice to the victims of Pablo Renato Rodriguez and the fraudulent “AirBit Club” Ponzi Scheme.
The convicted scammer was also ordered to forfeit a total of 3,800 Bitcoin, valued at about $100 million, Rodriguez’s Irvine, California, home, $900,000 in cash that was seized from the property, and almost $1 million that had been held in escrow for a Gulfstream jet.
The remaining defendants, Dos Santos, Scott Hughes, Cecilia Millan, and Karina Chairez, have also pleaded guilty and are awaiting sentencing.
The journey with AirBit Club began in 2015 when it was initially pitched to possible investors. They were attracted by the promise of passive, guaranteed daily profits on their membership investments through cryptocurrency mining and trading.
However, those who attempted to withdraw their profits from the club discovered a different reality by 2016. Instead of straightforward transactions, customers faced many excuses, delays, and undisclosed fees. They were also informed that they needed to bring in new members before receiving the promised returns.
After an investigation by U.S. Homeland Security Investigations, the club owners, including Rodriguez, were charged by the U.S. Department of Justice in August 2020 with fraud and money laundering.
In 2022, according to a report released on June 28 by blockchain intelligence company TRM Labs, cryptocurrency Ponzi and pyramid schemes cost investors $7.6 billion.
Takeaways
Pablo Rodriguez’s sentencing is an important one that sends a clear message that cryptocurrency Ponzi schemes will not go unpunished. It also marks a huge triumph for justice in the cryptocurrency industry. This instance serves as a reminder of the value of caution and diligence while investing in digital assets as the crypto ecosystem changes. The tenacious efforts of law enforcement organizations have once again shown how committed they are to preserving the integrity of the crypto ecosystem.
