The United States District Court for the Southern District of New York made an announcement, proceeding with the sentence of key individuals behind AirBit Club, a cryptocurrency mining and trading company that was, in reality, a cryptocurrency Ponzi scheme.
In early 2023 three defendants pleaded guilty to money laundering and other charges in the AirBit case. Damian Williams from the office of the U.S. attorney for New York in a statement announced that three of the five surviving defendants, Scott Hughes, Cecilia Millan, and Karina Chairez, were sentenced for their involvement in an internationally coordinated fraud and money laundering scheme that led people to invest in their company. This was months after their guilty pleas in court.
The attorney in AirBit Club, Scott Hughes who allegedly laundered approximately $18 million, was sentenced to 18 months in prison, and three years of supervised release. Their senior-level promoter of AirBit Club, Cecilia Millan, was sentenced to five years and Karina Chairez was sentenced to one year and one day in prison, with an additional sentence of three years and three months of supervised release, respectively.
Launched in late 2015, through its founders and promoters was the AirBit Club scheme which was initially recognized as a “multi-level marketing club” in the cryptocurrency industry. The promoters in a presentation falsely promised victims into thinking that AirBit Club had guaranteed daily returns from crypto mining and trading, tricking them into investing in the company. But instead of funding AirBit’s promoted crypto operations, which in reality had never been the case, its founders and promoters went away with $100 million of investors’ money.
AirBit Club managed to sustain its fraudulent activity until 2020, despite some users making complaints about withdrawal delays and hidden fees in early 2016.
Announcing the sentences, U.S. attorney Damian Williams stated that:
“At the top-tier of promoters, Millan and Chairez for years aggressively solicited investments from and misled hardworking and unsophisticated investors to line their own pockets,”
Williams also added:
“Today’s sentences send a message that anyone who facilitates cryptocurrency investment schemes — not only those at the very top of the pyramid — will face serious consequences for such crimes.
On September 26, 2023, AirBit Club co-founder Pablo Rodriquez was sentenced to 12 years in prison. Dos Santos, another co-founder who has pleaded guilty to charges including wire fraud conspiracy, money laundering, and bank fraud conspiracy, now remains the last out of a total of six defendants who are yet to be sentenced but is scheduled to know his fate today.
Jackie Aguilar, who pleaded guilty in February 2023, reportedly passed away in May, a few weeks before sentencing.