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AirBit Club ‘ponzi’ co-founder gets 12 years prison

September 27, 2023 Coin Telegraph

Convicted fraudster Pablo Renato Rodriguez will also need to serve three years of supervised release after he finishes his 12 year imprisonment sentence.

The co-founder of AirBit Club — a cryptocurrency pyramid scheme that swindled investors of over $100 million — has been sentenced to 12 years in prison for his role in a $100 million "pyramid scheme" that purported to be involved in crypto mining.

The sentencing comes nearly seven months after Rodriguez — the co-founder of AirBit Club — pleaded guilty to wire fraud conspiracy charges in a United States District Court in March.

In a Sept. 26 statement, Damian Williams, United States Attorney for the Southern District of New York said Rodriguez “preyed” on unsophisticated investors with false promises that their funds were invested into legitimate cryptocurrency trading and mining operations.

“Instead of investing on behalf of investors, Rodriguez hid victims’ money in a complex laundering scheme using Bitcoin, an attorney trust account, and international front and shell companies and used victims’ money to line his own pockets.”

District Court Judge George B. Daniels imposed an additional three years of supervised release for Rodriguez, which will follow his 12-year prison sentence.

.@HSINewYork's El Dorado Task Force, the largest anti-money laundering task force in the US, is proud to have played a vital role in delivering justice to the victims of Pablo Renato Rodriguez and the fraudulent "AirBit Club” Ponzi Scheme #HomelandSecurityInvestigations #HSINY https://t.co/UVco4ai3rI
— HSI New York (@HSINewYork) September 26, 2023

The convicted fraudster was ordered to pay a forfeiture of $65 million and to forfeit other items, including a total of 3,800 Bitcoins (BTC) (worth $100 million), Rodriguez’s Irvine residence in California, $900,000 in U.S. dollars seized from the property and nearly $1 million previously held in escrow for a Gulfstream Jet.

The other defendants — Dos Santos, Scott Hughes, Cecilia Millan and Karina Chairez have also pleaded guilty and are awaiting sentencing verdicts.

AirBit Club was launched in 2015. Prospective investors were told that AirBit Club earned returns on cryptocurrency mining and trading and that victims would earn passive, guaranteed daily returns on any membership purchased.

However, as early as 2016, club members wishing to withdraw proceeds were met with excuses, delays and hidden fees and told they must recruit new members if they wanted to receive the returns.

The operators of the club, including Rodriguez were charged with fraud and money laundering by the DOJ in August 2020 after a probe by the United States Homeland Security Investigations.

In 2022, $7.6 billion in funds were lost to cryptocurrency ponzi and pyramid schemes, according to a June 28 report by blockchain intelligence firm TRM Labs.

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FBI searched Kraken co-founder’s home in March: Report

July 7, 2023 Coin Telegraph

Coin Telegraph

Electronic devices were seized from former Kraken CEO Jesse Powell’s Los Angeles home in connection to a non-crypto-related investigation into alleged hacking and cyberstalking.

The United States Federal Bureau of Investigations (FBI) reportedly searched the home of Kraken co-founder Jesse Powell in March as part of an investigation into claims he hacked and cyber-stalked a nonprofit arts group.

It is claimed that Powell interfered with computer accounts by blocking access to emails and other messages from contributors of Verge Center for the Arts — the non-profit Powell founded, according to a July 6 report from The New York Times, citing three people with knowledge on that matter.

The F.B.I. searched the home of the cryptocurrency executive Jesse Powell in March. https://t.co/NRnK99cts7
— NYT Business (@nytimesbusiness) July 6, 2023

The trio informed The NYT that the FBI and the U.S. Attorney’s Office for the Northern District of California has been investigating Powell since “at least” September.

Electronic devices were reportedly seized from Powell’s home in Brentwood, Los Angeles as part of the search. However, it is understood that prosecutors have not accused Powell of any crimes.

Powell’s lawyer, Brandon Fox said the investigation mostly focused on allegations made by Verge Center for the Arts — the nonprofit Powell founded, and not anything to do with Powell’s involvement in the “cryptocurrency arena.” This was reportedly also confirmed by a Kraken spokesperson.

Fox also said that Powell “did nothing wrong.”

*An inside view of Verge Center for the Arts, which was founded by Powell. Source: Verge Center for the Arts*

Cointelegraph reached out to Jesse Powell for comment but did not receive an immediate response.

Powell reportedly founded the Sacramento-based arts group in 2007. However, his LinkedIn states that he’s worked as the founder and board member since April 2010.

Kraken remains the second largest United States-based cryptocurrency exchange behind Coinbase, according to CoinMarketCap.

Kraken was hit with enforcement action by the U.S. Securities Exchange Commission in February for failing to register the offer and sale of their staking service program.

The firm reached a settlement with the securities regulator, paying a lofty $30 million fine.

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U.S. Attorney’s Office