Convicted fraudster Pablo Renato Rodriguez has been sentenced to 12 years in prison and an additional three years of supervised release. The court has sentenced the co-founder of the AirBit Club pyramid scheme to 12 years in prison for defrauding investors of more than $100 million.
The co-founder pleaded guilty to wire fraud conspiracy charges in a United States District Court seven months ago, in March.
In a statement on September 26, Damian Williams, United States Attorney for the Southern District of New York, explained that Rodriguez had preyed on vulnerable investors by making false promises of high returns on their investments. He falsely claimed that legitimate cryptocurrency trading and mining operations would invest their money.
“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.”
Judge Daniels not only sentenced Rodriguez to 12 years in prison but also added a three-year term of supervised release after his prison sentence.
The court also ruled that he must forfeit substantial assets, including $65 million in forfeiture, 3,800 Bitcoins (valued at over $100 million), his California home, $900,000 in U.S. dollars seized from the property, and nearly $1 million from an escrow account, among other items.
Additional individuals, such as Dos Santos, Hughes, Millan, and Chairez, have also pleaded guilty and are awaiting their own sentencing decisions.
AirBit Club made its first appearance in 2015 with its promoters telling prospective investors that AirBit Club generated profits through crypto mining and trading and that membership would guarantee daily passive returns.
Club members who tried to cash out their earnings as early as 2016 encountered several excuses, delays, and hidden fees. They were also told that the only way to receive any returns was to recruit new members.
However, following an investigation by the U.S. Department of Homeland Security, Rodriguez, and his co-conspirators faced fraud and money laundering charges in August 2020. According to a June 2022 report by TRM Labs, crypto Ponzi, and pyramid schemes have caused investors to lose over $7.6 billion.
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