Six executives of AirBit Club are staring at a lengthy prison sentence after pleading guilty to fraud and money laundering charges using digital currencies.
The United States Department of Justice (DoJ) said that the scheme’s founders and promoters ran a fraudulent scheme that falsely promised investors guaranteed returns via digital asset mining and trading. Faced with a mountain of evidence against them, six individuals linked to the scheme entered a guilty plea hoping to receive a lighter sentence.
The individuals include Pablo Renato Rodriguez, Gutemberg Dos Santos, Scott Hughes, Cecilia Millan, Karina Chairez, and Jackie Aguilar, co-founders and promoters of AirBit Club. The defendants could receive up to 20 years in prison for their role in the scheme, with sentencing scheduled for June and July.
The defendants reportedly offered mouthwatering returns to investors in exchange for buying club memberships. The scheme was promoted as a multilevel marketing club with sufficient expertise in digital currency, specifically in mining and trading.
“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,” U.S. Attorney Damian Williams said. “These guilty pleas send a clear message that we are coming after all those seeking to exploit cryptocurrency to commit fraud.”
Victims were further convinced of AirBit Club‘s authenticity by an online investment portal that purported to show the accumulated profits made by investors. However, all attempts to withdraw funds proved unsuccessful, with victims told to “bring new blood” into the scheme.
The money trail was made up of multiple domestic and foreign bank accounts and the deployment of an attorney trust account. Initially, the trust account was designed to hold clients’ funds but was converted to fund the personal expenses of the scheme’s executives.
Law enforcement agencies are seizing the day
As digital currency scams continue, law enforcement is ramping up its efforts at cracking down on the bad actors. In the U.S., the DoJ’s new digital asset crime-fighting unit is leading the charge while the Securities and Exchange Commission (SEC) is on a crusade against the offer of unregistered securities.
Across the Pacific, South Korean agencies are putting digital currency service providers on their toes with close monitoring and multiple investigations into firms suspected of shady dealings. The proposed “virtual currency tracking system” is touted to assist South Korea’s Ministry of Justice in cracking down against money laundering offenders.
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