Six AirBit executives have previously pleaded guilty to their roles in the Ponzi scheme.

Pablo Rodriguez, co-founder of cryptocurrency pyramid scheme AirBit Club, pleaded guilty to wire fraud conspiracy charges in U.S. District Court in March and was sentenced to 12 years in prison a few months later.

Rodriguez and his co-conspirators are accused of orchestrating a global scam that lured investors with false promises of cryptocurrency riches while misappropriating their investments for personal gain and providing excuses when faced with withdrawal requests.

District Judge George B. Daniels ordered Rodriguez to serve an additional three years of supervised release, which will take effect after his 12-year sentence is completed.

Airbit scam

According to an official press release, Rodriguez and Dos Santos founded AirBit Club in 2015 and orchestrated a fraud scheme that siphoned off more than $100 million.

The two lured victims into investing in AirBit Club by promising guaranteed profits in exchange for a cash investment in the club’s “membership.” AirBit Club was advertised as a cryptocurrency multi-level marketing club that promised returns from cryptocurrency mining and trading, and provided members with daily passive returns.

To promote the scheme, Rodriguez, Dos Santos, Hughes, Millan, and Chairez traveled the globe, hosting lavish expos and local presentations in various countries to convince victims to purchase AirBit Club memberships, including in the Southern District of New York.

Victims were given access to an online portal showing alleged profits accumulating, but these claims were inherently fraudulent as it was later revealed that no actual cryptocurrency activity on behalf of the victims had occurred. Instead, the perpetrators “got rich” and spent user funds on luxury items while recruiting more victims through lavish exhibitions.

In cases where victims have tried to withdraw funds from the AirBit Club online portal and complained to promoters, they have been met with excuses, delays, and hidden fees that often exceed 50% of their requested withdrawals. Some of them have also had their accounts closed, allegedly losing their major investments due to false claims related to the COVID-19 pandemic.

U.S. Attorney Damian Williams said in a statement:

“Rodriguez co-founded and led a multi-million dollar international pyramid scheme that defrauded mostly inexperienced investors with false promises that their funds would be invested in cryptocurrency trading and mining.”

Past conflicts with the law

Authorities also allege that Rodriguez, Dos Santos, Hughes, Millan and Chairez attempted to conceal the AirBit Club program and their control over its proceeds. They did this by having victims purchase memberships with cash and using third-party cryptocurrency brokers.

They also laundered the funds through various bank accounts, including an attorney trust account managed by Hughes, which was supposed to hold client funds but was used to conceal the scheme’s illicit proceeds. Hughes used the victims’ funds to pay for the criminals’ personal expenses and to fund activities to promote the AirBit Club program.

Prior to AirBit Club, Rodriguez and Dos Santos were prosecuted by the U.S. Securities and Exchange Commission (SEC) for another pyramid scheme called "Vizinova" and paid a $1.7 million fine. California attorney Hughes represented them in that case and later helped them get involved in the AirBit Club scheme by removing negative information about the two from the Internet. #加密金字塔  #监禁