Co-founder of AirBit Club Ponzi Scheme Sentenced to 12 Years in Prison

AirBit Club Ponzi Scheme Co-founder Receives 12-Year Prison Sentence

Author: Brayden Lindrea, Cointelegraph; Translation: Song Xue, LianGuai

AirBit Club is a cryptocurrency pyramid scheme that defrauded investors out of over $100 million. One of the co-founders of the company has been sentenced to 12 years in prison for his involvement in a “pyramid scheme” allegedly involving cryptocurrency mining worth $100 million.

This judgment comes after AirBit Club co-founder Rodriguez pleaded guilty to charges of telecommunications fraud conspiracy in a US District Court nearly seven months ago.

In a statement on September 26, Damian Williams, the US Attorney for the Southern District of New York, stated that Rodriguez “preyed” on inexperienced investors and made false promises that their funds would be invested in legitimate cryptocurrency trading and mining operations.

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“Rodriguez did not invest the investors’ funds as promised, but instead used Bitcoin, lawyer trust accounts, and international shell companies to hide the victims’ money in complex money laundering schemes and enrich himself.”

After sentencing Rodriguez to 12 years in prison, District Court Judge George B. Daniels also sentenced him to 3 years of supervised release.

The convicted fraudster has been ordered to forfeit $65 million and other assets, including a total of 3,800 Bitcoin (BTC) worth $100 million, Rodriguez’s residence in Irvine, California, $900,000 seized from the property, and nearly $1 million previously held in trust for the purchase of a Gulfstream jet.

Other defendants, Dos Santos, Scott Hughes, Cecilia Milan, and Karina Chair, have also pleaded guilty and await sentencing.

AirBit Club was launched in 2015. Potential investors were told that AirBit Club generates returns through cryptocurrency mining and trading, and that purchasing any membership would guarantee passive daily returns.

However, as early as 2016, club members who wanted to withdraw their earnings faced various excuses, delays, and hidden fees, and were told that they had to recruit new members in order to receive their returns.

After an investigation by the US Department of Homeland Security’s Homeland Security Investigations, the club operators, including Rodriguez, were charged with fraud and money laundering in August 2020.

According to a report by blockchain intelligence company TRM Labs on June 28, 2022, cryptocurrency Ponzi schemes and pyramid schemes have collectively lost $7.6 billion in funds.

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