Crypto Scam Co-Founder Faces Decade Sentence, Heavy Penalties
AirBit Club co-founder sentenced to 12 years for $100 million cryptocurrency scam.
Pablo Rodrรญguez, co-creator of the famous AirBit Club, received a 12-year prison sentence for masterminding a cryptocurrency fraud that separated investors from more than $100 million. Rodriguez had previously confessed to conspiring to commit wire fraud in a US federal court last March.
Last September 26, Damian Williams, federal prosecutor for the Southern District of New York, pointed out that Rodrรญguez capitalized on less informed investors. He lured them in with dishonest assurances, assuring them that their resources would be channeled into genuine cryptocurrency mining and trading activities. Contrary to these promises, Rodrรญguez orchestrated an intricate money laundering operation involving Bitcoin, a lawyer's trust account, and pseudonymous global companies. His main intention was to personally benefit from these funds.
In addition to his lengthy incarceration, District Court Judge George Daniels also ordered Rodriguez to undergo three more years of supervised release. Rodrรญguez has been instructed to forfeit $65 million. Additionally, he must give up numerous assets: 3,800 Bitcoin, equivalent to approximately $100 million, a home located in Irvine, California, $900,000 in cash recovered from this residence, and nearly $1 million reserved for a Gulfstream airplane.
Four additional accused individuals โ Scott Hughes, Dos Santos, Karina Chairez and Cecilia Millรกn โ confessed to their involvement in the scam and are currently awaiting their verdicts.
Founded in 2015, the AirBit Club targeted potential members by claiming to generate profits from mining and trading cryptocurrencies, promising them consistent daily returns for any membership purchased. However, when club members attempted to withdraw their winnings starting in 2016, they encountered obstacles, surprise charges, and were asked to bring in more members to collect their winnings.
The United States Department of Justice charged the club's top agents, including Rodrรญguez, with fraud and money laundering in August 2020, an accusation following an investigation by the United States Department of Homeland Security.
A 2022 study by TRM Labs, a blockchain research company, revealed that a staggering $7.6 billion was siphoned off by crypto scams like Ponzi and pyramid schemes.
