AirBit Club Co-Founder Sentenced to 12 Years in Prison for Crypto Pyramid Scheme

Pablo Rodriguez – the co-founder of the cryptocurrency pyramid scheme AirBit Club – was sentenced to 12 years in prison months after pleading guilty to wire fraud conspiracy charges in a US District Court in March.

Rodriguez and his co-conspirators were accused of orchestrating a global scam, enticing investors with false promises of cryptocurrency riches while misappropriating their investments for personal gain and offering excuses when faced with withdrawal requests.

Judge George B. Daniels at the District Court has ordered an extra three years of supervised release for Rodriguez, which will be in effect after his 12-year prison term.

AirBit Scam

According to the official press release, Rodriguez and Dos Santos founded AirBit Club in 2015 and orchestrated a fraudulent scheme siphoning over $100 million.

The duo lured their victims into investing in AirBit Club by promising guaranteed profits in exchange for cash investments in club “memberships.” AirBit Club was marketed as a cryptocurrency multilevel marketing club, with promises of returns from cryptocurrency mining and trading, along with daily passive returns for members.

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

Victims were given access to an online portal showing supposed profits accumulating, but these claims were fraudulent in nature as it was later found that no actual cryptocurrency activities on behalf of victims occurred. Instead, the perpetrators “enriched themselves,” spending user funds on luxury items while recruiting more victims through lavish expos.

In cases where victims tried to withdraw funds from the AirBit Club Online Portal and complained to promoters, they encountered excuses, delays, and hidden fees, often amounting to over 50% of their requested withdrawal. Some of them also had their accounts closed, and their principal investments were allegedly lost due to a false claim related to the COVID-19 pandemic.

In a statement, US Attorney Damian Williams said,

“Rodriguez co-founded and led an international multimillion-dollar pyramid scheme that preyed on mostly unsophisticated investors with false promises that their money was being invested in cryptocurrency trading and mining.”

Past Scuffle With Law

The authorities also accused Rodriguez, Dos Santos, Hughes, Chairez, and Millan of trying to hide the AirBit Club Scheme and their control over its proceeds. They did this by having victims buy memberships with cash and using third-party cryptocurrency brokers.

They also laundered the money 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 illegal proceeds. Hughes directed victim funds to the personal expenses of the culprits and financed events to promote the AirBit Club Scheme.

Before AirBit Club, Rodriguez and Dos Santos were sued by the US Securities and Exchange Commission (SEC) for another pyramid scheme called ‘Vizinova’ and paid $1.7 million in penalties. Hughes, a California lawyer, represented them in that case and later helped them in the AirBit Club scheme by removing negative information about both from the internet.

The post AirBit Club Co-Founder Sentenced to 12 Years in Prison for Crypto Pyramid Scheme appeared first on CryptoPotato.



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