AirBit Club Co-Founders and Promoters Plead Guilty to Fraud
Six employees of a company that turned out to be a global multi-million dollar cryptocurrency pyramid scheme have pleaded guilty, according to the Southern District of New York prosecutor's office.
AirBit Club: the company founded in 2015 by Pablo Renato Rodriguez and Gutemberg Dos Santos with a passion for mining and cryptocurrency trading. At least that's what the co-founders and senior promoters, Cecilia Millan, Karina Chairez, and Jackie Aguilar, told investors.
Attorney Scott Hughes was another accomplice. He previously represented Rodriguez and Dos Santos in the SEC investigation of the Vizinova investment scheme. Hughes assisted in the execution of the AirBit Club scheme and removal of negative information about the club and Vizinova from the internet.
How AirBit Club scammed its way through the crypto world
AirBit Club, a multi-level marketing cryptocurrency club, was a coordinated international scheme. Investor victims purchased various levels of club membership to receive guaranteed daily passive income. Club members were led to believe that their income would come from cryptocurrency mining and trading.
All six defendants actively promoted AirBit Club not only in the United States, but also in Latin American, Eastern European, and Asian countries. They organized large-scale presentations and exhibitions, demonstrating the benefits of club membership and convincing attendees to invest in the project.
The fraudsters provided victims who invested in the club with access to an online portal, where they could supposedly monitor the accumulation of funds resulting from bitcoin trading and mining. However, AirBit Club was never involved in these activities.
Investors were left with ringing alarms as they faced difficulties withdrawing their funds. Those lucky enough to withdraw their money were hit with delays and hidden fees. This made them wonder if they had stumbled into a crypto casino instead of a club. With commission fees reaching up to 50% of the requested amount, investors felt like they had been played by a one-armed bandit.
AirBit Club employees urged victims to "bring new blood" to the scheme and wait for funds. In 2020, some investors faced even more blatant fraud, with their accounts being closed and their investments irretrievably lost due to the "execution of financial sustainability reserve" amid the Covid-19 induced financial and economic crisis.
The scammers were determined to keep their scheme under wraps from regulators and law enforcement, resorting to several sneaky tactics:
- Club membership payments were accepted in cash or through third-party cryptocurrency brokers;
- The funds were laundered through American and foreign bank accounts of third parties and organizations, including a trust account for Hughes' law practice.
The masterminds and promoters behind AirBit Club spent the ill-gotten gains funding extravagant club events and indulging in lavish luxuries like precious jewels, high-end cars, and elite real estate.
What will happen to scammers
Six members of the AirBit Club scheme have pleaded guilty to using electronic communications to conspire, launder money, and commit bank fraud. They will be sentenced in the summer of 2023. The fraudsters will collectively lose out on approximately $100 million in ill-earned gains and face up to 20 years in prison. Hence, they ended up getting poor-slow with their get-rich-quick scheme.
«Instead of doing any cryptocurrency trading or mining on behalf of investors, the defendants built a Ponzi scheme and took the victims’ money to line their own pockets. These guilty pleas send a clear message that we are coming after all of those who seek to exploit cryptocurrency to commit fraud», — emphasized Damian Williams, the federal prosecutor for the Southern District of New York, who continues to combat crimes in the crypto industry.
Instead of doing any cryptocurrency trading or mining on behalf of investors, the defendants built a Ponzi scheme and took the victims’ money to line their own pockets. These guilty pleas send a clear message that we are coming after all of those who seek to exploit cryptocurrency to commit fraud, — emphasized Damian Williams, the federal prosecutor for the Southern District of New York, who continues to combat crimes in the crypto industry.
