The United States District Court for the Southern District of New York is moving forward with sentencing proceedings against key individuals behind the cryptocurrency Ponzi scheme AirBit Club.
The U.S. Attorney’s Office in New York announced the sentencing of three of the five surviving defendants in the AirBit case, including Scott Hughes, Cecilia Milan, and Karina Serres, on Oct. 3. These sentencings come months after all three defendants pleaded guilty to money laundering and other charges in the AirBit case in early 2023.
Hughes, a lawyer who allegedly laundered approximately $18 million in proceeds from the AirBit Club fraud, was sentenced to 18 months in prison. Milan, a senior promoter of the AirBit Club, was sentenced to five years in prison. Chairez, another senior promoter of the AirBit Club, was sentenced to one year and one day in prison.
In addition, Hughes was sentenced to three years of supervised release. Millan and Chairez were also sentenced to three years and three months of supervised release each.
AirBit Club was planned to launch in late 2015 and was promoted as a “multi-level marketing club” for the cryptocurrency industry. Defendants provided promising statements to deceive investors into believing that AirBit Club guaranteed daily returns on crypto mining and trading. However, rather than funding the promoted crypto businesses (which it never did), AirBit put $100 million of investor funds into the pockets of its founders and promoters.
Although some users complained about withdrawal delays and hidden fees in early 2016, AirBit Club plans to manage to maintain its fraudulent activities until 2020.
In announcing the verdict, U.S. Attorney Damian Williams stressed that Hughes, Milan, and Chairez each played key roles in perpetuating the AirBit Club pyramid scheme.
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“Among the top sponsors, Millan and Chairez aggressively sought investments for years and misled diligent and unsophisticated investors to enrich themselves,” Williams said, adding:
“Today’s sentencing sends a message that anyone who promotes cryptocurrency investment schemes – not just those at the top of the pyramid – will face serious consequences for such crimes.
Previously, AirBit Club co-founder Pablo Rodriguez was sentenced to 12 years in prison in late September 2023. Another co-founder, Dos Santos, pleaded guilty to charges including wire fraud conspiracy, money laundering and bank fraud conspiracy and is scheduled to be sentenced on October 4, 2023.
Santos will be the last of the six defendants behind AirBit Club to be sentenced. Jackie Aguilar, who pleaded guilty in February 2023, reportedly died in May, weeks before his sentencing.
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