Crypto Scheme Co-Founder Sentenced to 12 Years in Prison
Pablo Renato Rodriguez, one of the co-founders of the notorious cryptocurrency-based pyramid scheme AirBit Club, has been sentenced to 12 years in prison by US District Judge George B. Daniels. This comes after Rodriguez and his co-conspirators, including Gutemberg Dos Santos, orchestrated the fraudulent scheme which promised guaranteed profits through cryptocurrency mining and trading. The scheme defrauded investors of approximately $100 million.
Selling “Memberships” with False Promises
Under the AirBit Club scheme, investors were enticed to purchase club “memberships” with cash investments, with the expectation of daily returns. The perpetrators marketed the scheme as a multilevel marketing (MLM) club that would generate profits from crypto activities. However, in reality, no mining or trading took place and the money was instead used to enrich themselves.
Deceptive Tactics and Money Laundering
The fraudsters went to great lengths to hide their illicit gains, including laundering funds through bank accounts and an attorney trust account managed by Scott Hughes. They also hosted events and presentations worldwide to convince individuals to invest in AirBit Club memberships. Victims who attempted to withdraw money faced delays, hidden fees, and excuses.
Forfeiture of $100 Million
The co-conspirators have been ordered to forfeit around $100 million in fraudulent proceeds, which include Bitcoin, US dollars, and real estate. This serves as a warning to those involved in crypto-related fraud that they will face severe consequences for exploiting investors.
A History of Fraudulent Schemes
This is not the first time that Rodriguez and Dos Santos have faced legal action for their involvement in pyramid investment schemes. They were previously sued by the Securities and Exchange Commission (SEC) for another scheme called Vizinova, where they paid $1.7 million in disgorgement and fines. As a licensed attorney, Scott Hughes helped in removing negative information about both schemes from the internet, allowing Rodriguez and Dos Santos to continue defrauding investors.
Hot Take: Strong Sentence Sends a Warning to Crypto Fraudsters
The 12-year prison sentence handed down to Pablo Renato Rodriguez sends a clear message to individuals who exploit cryptocurrency to commit fraud. US Attorney Damian Williams emphasizes that this should deter anyone tempted to defraud others with false promises of crypto investments. The case highlights the need for vigilance in the crypto space and the importance of holding those responsible accountable for their actions.
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