The co-founder of a global crypto Ponzi scheme has been sentenced to prison and ordered to forfeit millions.
Back in March, Pablo Renato Rodriguez pleaded guilty to fraud and money laundering charges for his role in running a crypto-based pyramid scheme, AirBit Club, which he co-founded with Gutemberg Dos Santos in 2015.
The scheme promised investors returns from crypto mining and trading. However, despite reporting returns to investors, no actual mining or trading took place, U.S. authorities charged.
Instead, the scheme’s perpetrators “enriched themselves and spent [investors’] money on cars, jewelry, and luxury homes, and financed more extravagant expos to recruit more victims,” authorities alleged.
“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,” said Damian Williams, U.S. attorney for the Southern District of New York, in a release.
“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.”
Rodriguez was sentenced to 12 years in prison, three years of supervised relief and ordered to forfeit US$65 million, along with other property.
Dos Santos and several other co-conspirators, who have pleaded guilty to various charges including wire fraud, bank fraud and money laundering conspiracy, are scheduled to be sentenced next week.
Alongside the AirBit Club scheme, Rodriguez and Dos Santos were also sued by the U.S. Securities and Exchange Commission (SEC) for another pyramid investment scheme.
In 2017, they settled the SEC’s charges without admitting or denying the allegations. In that case, they agreed to pay US$1.4 million in disgorgement plus penalties of US$160,000 each.