Pablo Renato Rodriguez, the co-founder of the cryptocurrency venture AirBit Club, has been handed a 12-year prison sentence by US District Judge George B. Daniels, following the club's involvement in a vast cryptocurrency scheme.
Promoted as a platform promising sizable returns from and , AirBit Club attracted numerous investors under Rodriguez's leadership. However, instead of genuine cryptocurrency operations, the funds procured were allegedly channeled towards personal expenditures. The scheme also involved a sophisticated to mask the sources of their income.
The Department of Justice (DOJ) that investors were enticed into buying AirBit Club memberships, promised lucrative returns. Rodriguez's associates, Gutemberg Dos Santos, Scott Hughes, Cecilia Millan, and Karina Chairez, have entered guilty pleas and are pending their sentencing. Resulting from the investigation, assets worth around $100 million, encompassing US currency, , and real estate, have been mandated for forfeiture.
US Attorney Damian Williams, addressing the verdict, pointed out the significance of this case in curbing fraudulent cryptocurrency ventures and underscored the misuse of the emerging digital asset class for deceptive means:
"Rodriguez co-founded and led an international multimillion-dollar pyramid scheme that preyed on mostly unsophisticated investors with false promises that their money was being invested in cryptocurrency trading and mining. Instead of investing on behalf of investors, Rodriguez hid victims’ money in a complex laundering scheme using Bitcoin, an attorney trust account, and international front and shell companies and used victims’ money to line his own pockets."
Court filings reveal that Rodriguez, in partnership with Dos Santos, founded the AirBit Club in 2015. They aggressively positioned it as a crypto-centric multilevel marketing club. Globally, they hosted lavish events and presentations, encouraging attendees to . In return, they were provided access to an online dashboard, which displayed fictitious investment returns.
By 2016, investors seeking to retrieve their funds were met with hurdles, delays, and hidden charges. Funds extracted under deceptive pretenses were towards luxury purchases, further promotional events, and funneled through an elaborate web of bank accounts, both domestically and internationally.
Significantly, Scott Hughes's attorney trust account was identified by the DOJ as instrumental in obscuring the dubious proceeds from the AirBit Club operations.
Before AirBit Club's inception, both Rodriguez and Dos Santos had faced legal challenges with the US Securities and Exchange Commission (SEC) over their involvement in another investment scheme named Vizinova. Scott Hughes, their attorney in the Vizinova litigation, was later implicated in assisting them in the AirBit Club operation by eliminating negative digital footprints concerning both ventures from the web.
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