Rodríguez and his accomplices deceived people into investing in an alleged cryptocurrency mining and trading company. Upon achieving their goal, they executed a sophisticated money laundering operation to hide their illegal profits. The rest of the scammers, who pleaded guilty, await their respective sentences in October.
The co-founder of cryptocurrency mining and trading business AirBit Club, Pablo Renato Rodríguez, was sentenced to 12 years in prison for orchestrating a global pyramid scheme. For US District Judge George B. Daniels, Rodríguez and his accomplices deceived people into investing in an alleged cryptocurrency mining and trading company.
Upon achieving their goal, they executed a sophisticated money laundering operation to hide their illegal profits. It should be noted that, in March this year, the main executives and operators of the business pleaded guilty to accusations of fraud and money laundering.
How the AirBit Club Cryptocurrency Ponzi Scheme Worked
As a result of that statement, everyone was ordered to forfeit their fraudulent AirBit Club winnings. That capital included seized or restricted assets for an approximate amount of $100 million. The sum was made up of cash, Bitcoin and real estate.
In its ruling, the court revealed the details of the accused’s actions. The ruling highlighted that the scam promoters falsely promised victims that with AirBit Club they would obtain returns from mining and trading cryptocurrencies. That tempted people with access to passive, guaranteed daily returns for any membership purchased.
Federal prosecutor Damian Williams did not limit himself when describing the forcefulness of the maneuvers, and expressed the following:
“Rodriguez co-founded and ran a multimillion-dollar international pyramid scheme that preyed on mostly unsophisticated investors with false promises that their money was being invested in cryptocurrency trading and mining.”
Rodríguez’s sentencing explains that the scammers traveled throughout the United States and numerous locations in Latin America, Asia and Eastern Europe, where they organized lavish exhibitions and small community presentations aimed at convincing victims to purchase AirBit Club memberships. Williams revealed what they then did with the money:
“Instead of investing on behalf of investors, Rodríguez concealed victims’ money in a complex laundering scheme using Bitcoin, a lawyer trust account as well as international front and shell companies, and used victims’ money to fill his own pockets.”
Complaints from Victims and What Happens to the Rest of AirBit Club Scammers
Already in 2016, protests began to arise from AirBit Club users who complained about not being able to withdraw their money. These complaints were reportedly met with excuses, delays, and hidden fees. In some cases, the fees were more than 50% of the requested withdrawal.
The path of the scam was completed with another fantasy: after a victim’s investment, the promoter on duty provided them with access to an AirBit Club online portal. This tool was used to see the supposed returns of memberships.
U.S. Attorney Damian Williams exposed the AirBit Club model as an example of the many cases of unscrupulous people who seek to take advantage of people’s trust.
“Rodriguez is one of many recent examples of people exploiting cryptocurrencies to commit fraud, and today’s sentencing should deter anyone who may be tempted to defraud others with false promises of cryptocurrency investments.”
In addition to Rodríguez, the others targeted are Gutemberg Dos Santos, Scott Hughes, Cecilia Millan, Karina Chairez and Jackie Aguilar. Next October, the rest of the defendants are expected to hear their sentences some time soon.
By Audy Castaneda