Cryptocurrency Scam Co-Founder Faces Decade-Long Sentence and Hefty Penalties
AirBit Club co-founder sentenced to 12 years for a $100 million cryptocurrency scam.
Thu, 28 Sep 2023, 08:45 am UTC
Pablo Rodriguez, co-creator of the notorious AirBit Club, received a 12-year jail term for masterminding a cryptocurrency fraud that parted investors from more than $100 million. Rodriguez had earlier confessed to conspiring in wire fraud in a federal court in the United States this past March.
Last September 26, Damian Williams, the Southern District of New York's U.S. Attorney, noted that Rodriguez capitalized on less knowledgeable investors. He lured them with dishonest guarantees, assuring them their resources were channelled into genuine crypto trade and mining activities. Contrary to these promises, Rodriguez orchestrated an intricate money laundering operation involving Bitcoin, a lawyer's trust account, and global pseudonymous enterprises. His primary intention was to benefit personally from these funds.
In addition to his lengthy incarceration, Judge George Daniels of the district court has also mandated that Rodriguez undergo three more years of monitored release. Rodriguez has been instructed to relinquish $65 million. Additionally, he must give up numerous assets: 3,800 Bitcoin, equivalent to roughly $100 million, a home located in Irvine, California, $900,000 in cash retrieved from this residence, and almost $1 million reserved for a Gulfstream jet.
Four more accused individuals – Scott Hughes, Dos Santos, Karina Chairez, and Cecilia Millan – confessed to their participation in the scam and currently await their verdicts.
Established in 2015, the AirBit Club pitched to potential members by stating it generated profits from crypto mining and trading, promising them consistent daily returns on any acquired membership. Yet, when club associates tried to cash out their gains starting in 2016, they encountered hindrances, surprise charges, and were told to bring in more members to realize their profits.
The U.S. Department of Justice accused the club's main operatives, inclusive of Rodriguez, of fraud and money laundering in August 2020, this accusation coming post an investigation by U.S. Homeland Security.
A 2022 study by TRM Labs, a blockchain research company, revealed that a staggering $7.6 billion was siphoned off by crypto frauds like Ponzi and pyramid setups.
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