May 27, 2024

Operators And Attorney Of Global Multi-Million-Dollar Cryptocurrency Ponzi Scheme “AirBit Club” Plead Guilty | USAO-SDNY

Operators And Attorney Of Global Multi-Million-Dollar Cryptocurrency Ponzi Scheme “AirBit Club” Plead Guilty | USAO-SDNY

Damian Williams, the United States Attorney for the Southern District of New York, declared these days the responsible pleas of PABLO RENATO RODRIGUEZ, GUTEMBERG DOS SANTOS, SCOTT HUGHES, CECILIA MILLAN, KARINA CHAIREZ, and JACKIE AGUILAR for their roles in an internationally coordinated fraud and funds laundering ring that deceived folks into investing in AirBit Club, a purported cryptocurrency mining and investing corporation.  AirBit Club co-founder DOS SANTOS pled guilty just before United States District Decide George B. Daniels on October 21, 2021.  Senior AirBit Club promoters CHAIREZ, MILLAN, and AGUILAR pled guilty right before Decide Daniels on January 31, February 8, and February 22, 2023, respectively, and are scheduled to be sentenced by Choose Daniels on June 28, July 25, and June 27, 2023, respectively.  SCOTT HUGHES, an attorney who laundered Airbit Club fraud proceeds for RODRIGUEZ and DOS SANTOS, pled guilty ahead of Judge Daniels on March 2, 2023, and is scheduled to be sentenced on August 9, 2023.  Airbit Club co-founder RODRIGUEZ pled responsible ahead of Judge Daniels previously today and is scheduled to be sentenced on July 25, 2023.  As section of their responsible pleas, the defendants collectively have been purchased to forfeit their fraudulent proceeds of Airbit Club, which consist of seized or restrained property consisting of U.S. forex, Bitcoin, and authentic estate presently valued at about $100 million.

U.S. Legal professional Damian Williams mentioned: “The defendants took advantage of the escalating hype all-around cryptocurrency to con unsuspecting victims all-around the earth out of hundreds of thousands of dollars with phony claims that their funds was remaining invested in cryptocurrency investing and mining.  Instead of carrying out any cryptocurrency investing or mining on behalf of buyers, the defendants created a Ponzi plan and took the victims’ money to line their have pockets.  These guilty pleas mail a very clear information that we are coming right after all of those people who find to exploit cryptocurrency to commit fraud.”    

According to the Superseding Indictment, the defendants’ statements when pleading guilty, and statements manufactured in connected court docket filings and proceedings:

RODRIGUEZ, DOS SANTOS, HUGHES, MILLAN, CHAIREZ, and AGUILAR participated in a coordinated plan in which victim-investors (the “Victims”) had been induced to invest in AirBit Club based mostly on the phony assure of guaranteed revenue in exchange for cash investments in club “memberships” (the “AirBit Club Scheme” or the “Scheme”).  Starting in late 2015, AirBit Club, via its founders, RODRIGUEZ and DOS SANTOS, as perfectly as its promoters (the “Promoters”), which includes MILLAN, CHAIREZ, and AGUILAR, marketed AirBit Club as a multilevel advertising club in the cryptocurrency business.  Promoters falsely promised Victims that AirBit Club acquired returns on cryptocurrency mining and investing and that Victims would get paid passive, confirmed everyday returns on any membership bought.

RODRIGUEZ, DOS SANTOS, HUGHES, MILLAN, CHAIREZ, and AGUILAR traveled all over the United States and all over the world to sites in Latin The usa, Asia, and Japanese Europe, in which they hosted lavish expos and little neighborhood presentations aimed at convincing Victims to purchase AirBit Club memberships.  In furtherance of the AirBit Club Plan, the Victims ended up fraudulently induced to obtain memberships in hard cash, together with in the Southern District of New York.  Subsequent a Victim’s expenditure, a Promoter supplied the Sufferer with obtain to an on the internet AirBit Club portal to look at the purported returns on memberships (the “Online Portal”).  While Victims noticed “profits” accumulate on their On the web Portal, these representations have been wrong no Bitcoin mining or buying and selling on behalf of Victims in fact took put.  As a substitute, RODRIGUEZ, DOS SANTOS, MILLAN, and AGUILAR enriched themselves and spent Sufferer revenue on autos, jewelry, and luxury houses, and financed far more extravagant expos to recruit extra Victims. 

HUGHES, an attorney certified to observe regulation in California, experienced previously represented RODRIGUEZ and DOS SANTOS in a Securities and Exchange Fee investigation relevant to a different expense plan regarded as Vizinova.  He then aided RODRIGUEZ and DOS SANTOS in perpetrating the AirBit Club Plan by, amongst other things, assisting to take away unfavorable info about AirBit Club and Vizinova from the web. 

In quite a few cases, as early as 2016, Victims who attempted to withdraw cash from the AirBit Club On the net Portal and complained to a Promoter were being met with excuses, delays, and concealed expenses amounting to additional than 50% of the Victim’s requested withdrawal, if they had been in a position to make any withdrawal at all.  In one occasion, AGUILAR instructed a single Sufferer of the AirBit Club Scheme who was complaining about her incapacity to withdraw AirBit Club returns that she really should “bring new blood” into the AirBit Club Plan in order to get her returns.

In April 2020, one more target received a see on the AirBit Club On-line Portal that his account was shut – and principal expense dropped – thanks to “execution of economical sustainability Reserve, policy #34 of the Airbit Club Conditions and Disorders, thanks to the financial and economic disaster brought about by (Covid-19).”

RODRIGUEZ, DOS SANTOS, HUGHES, CHAIREZ, and MILLAN sought to conceal the AirBit Club Plan, as well as their respective handle of the proceeds of that Plan, by requesting that Victims acquire memberships in cash, utilizing third-bash cryptocurrency brokers, and by laundering the Scheme’s proceeds by a number of domestic and foreign lender accounts, which includes an legal professional belief account managed by HUGHES (the “Hughes Trust Account”).  The Hughes Believe in Account was ostensibly intended to maintain custody of HUGHES’s law practice’s consumer funds.  Instead, the Hughes Belief Account was made use of by RODRIGUEZ, DOS SANTOS, HUGHES, CHAIREZ, and MILLAN to conceal the character and origin of the AirBit Club Scheme’s illicit proceeds.  By means of that account, HUGHES directed Target cash to the own bills of RODRIGUEZ, DOS SANTOS, CHAIREZ, MILLAN, and himself, and funded marketing activities and sponsorships created to even more market the AirBit Club Plan. 

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RODRIGUEZ, 40, of Irvine, California, DOS SANTOS, 48, of Panama Metropolis, Panama, MILLAN, 41, of Greensboro, North Carolina, CHAIREZ, 47, of Modesto, California, AGUILAR, 58, of Plano, Texas, and HUGHES, 47, of Newport Seaside, California, have pled guilty to charges which includes wire fraud conspiracy, which carries a most likely sentence of 20 yrs in prison income laundering conspiracy, which carries a optimum potential sentence of 20 yrs in jail and lender fraud conspiracy, which carries a highest potential sentence of 30 years in prison.  

The maximum prospective penalties are prescribed by Congress and are supplied in this article for informational reasons only, as the sentencing of the defendants will be determined by the choose.

Mr. Williams praised the exceptional investigative do the job of Particular Brokers from Homeland Security Investigations’ (“HSI”) El Dorado Activity Force, HSI Panama, the HSI Panama Town Transnational Criminal Investigative Device, and HSI New Orleans.  Mr. Williams further thanked the attorneys and investigators at the Securities and Trade Commission whose expertise and diligence ended up integral to the growth of this investigation.

If you feel you are a victim of the AirBit Club fraud, current details pertaining to the scenario and victims’ rights as perfectly as call information for the sufferer witness coordinator is out there below.

The scenario is staying dealt with by the Office’s Money Laundering and Transnational Criminal Enterprises Unit.  Assistant U.S. Attorneys Kiersten A. Fletcher, Samuel L. Raymond, and Cecilia E. Vogel are in cost of the prosecution.