Key takeaways :
- U.S. Court Proceeds with Sentencing in AirBit Club Cryptocurrency Ponzi Scheme Case
- Launched in late 2015, the AirBit Club posed as a cryptocurrency multi-level marketing club
The United States District Court for the Southern District of New York has taken a significant step forward in the sentencing of key individuals involved in the AirBit Club, a cryptocurrency mining and trading company that operated as a cryptocurrency Ponzi scheme.
In early 2023, three defendants in the AirBit case pleaded guilty to charges including money laundering. Damian Williams, representing the U.S. attorney for New York, issued a statement confirming that Scott Hughes, Cecilia Millan, and Karina Chairez, three of the remaining five defendants, have now been sentenced.
They were found guilty of participating in an internationally coordinated fraud and money laundering scheme that duped investors into putting money into their fraudulent enterprise. This sentencing follows their earlier guilty pleas in court.
(COURT FILING)
U.S. Attorney Damian Williams stated, “At the highest levels of promotion, Millan and Chairez aggressively sought investments from unsuspecting and less sophisticated investors, enriching themselves in the process.’’
Hughes, abusing his position as an attorney, played a key role in laundering millions of dollars in proceeds from the AirBit Club fraud while providing the false appearance of legitimacy to the operation. Pyramid schemes like AirBit Club rely on facilitators like Hughes, Millan, and Chairez.
This development comes approximately six months after six AirBit Club executives admitted guilt in running a Ponzi scheme worth $100 million. The Department of Justice (DoJ) identified the defendants in this case as Pablo Renato Rodriguez, Gutemberg Dos Santos, Scott Hughes, Cecilia Millan, and Jackie Aguilar.
Dos Santos and Rodriguez, known as the founders of AirBit Club, have a history of involvement in fraudulent schemes, having been fined $1.4 million three years ago for running another Ponzi scheme called ‘Vizinova.’
Launched in late 2015, the AirBit Club Ponzi scheme presented itself as a cryptocurrency industry “multi-level marketing club.” To entice investors, the defendants employed enticing presentations, creating an illusion of guaranteed daily returns through cryptocurrency mining and trading ventures.
Contrary to their claims, the scheme never engaged in the advertised crypto operations. Instead, it diverted approximately $100 million of investors’ funds into the hands of its founders and promoters. Despite receiving early complaints from users about withdrawal delays and hidden fees in 2016, the AirBit Club continued its fraudulent activities until 2020.”
