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Key Takeaways
Pablo Renato Rodriguez, co-founder of AirBit Membership, sentenced to 12 years in jail.
Rodriguez and co-defendants ordered to forfeit roughly $100 million in property.
Co-defendants await sentencing; earlier involvement in pyramid schemes revealed.
Background and Conviction
Pablo Renato Rodriguez, co-founder of AirBit Membership, was sentenced to 12 years in jail on September 26, 2023, by U.S. District Choose George B. Daniels. The sentencing was introduced by Damian Williams, the USA Lawyer for the Southern District of New York. Rodriguez was convicted for his function in orchestrating a world pyramid scheme by way of AirBit Membership, a purported cryptocurrency mining and buying and selling firm. The co-defendants, Gutemberg Dos Santos, Scott Hughes, Cecilia Millan, and Karina Chairez, have pled responsible and are awaiting sentencing.
Misleading Practices
AirBit Membership was based in 2015 by Rodriguez and Dos Santos. They falsely promised buyers assured income in trade for money investments in membership memberships. The corporate was marketed as a multilevel advertising membership within the cryptocurrency trade. Nevertheless, no precise Bitcoin mining or buying and selling passed off on behalf of the buyers. As a substitute, Rodriguez and his co-conspirators used the cash for private bills and to finance extra recruitment occasions.
Asset Forfeiture
Rodriguez and his co-defendants have been ordered to forfeit their fraudulent proceeds, which embrace property consisting of U.S. foreign money, Bitcoin, and actual property at the moment valued at roughly $100 million.
Earlier Authorized Troubles
Earlier than AirBit Membership, Rodriguez and Dos Santos had been sued by the Securities and Alternate Fee (SEC) for an additional pyramid scheme often called Vizinova, and paid $1.7 million in disgorgement and fines.
Upcoming Sentencings
Dos Santos, Millan, Chairez, and Hughes have pled responsible to prices together with wire fraud conspiracy, cash laundering conspiracy, and financial institution fraud conspiracy. They’re scheduled to be sentenced in early October 2023.
Cryptocurrency Ponzi schemes usually are not unusual in a world the place regulatory oversight continues to be catching up. On September 28, 2022, the U.S. Lawyer’s Workplace introduced the eighth distribution of over $4 billion to victims of the Madoff Ponzi scheme, which was not cryptocurrency-related however serves as a reminder of the recurring nature of such fraudulent schemes.
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