AirBit Club co-founder sentenced to 12 years in prison

The U.S. District Court for the Southern District of New York sentenced AirBit Club co-founder Pablo Renato Rodriguez to 12 years in prison with the possibility of parole after three years.

According to case materials, in 2015 Rodriguez, together with Gutemberg Dos Santos, created a scheme to solicit cash funds, promising daily returns from investments in cryptocurrency trading and mining. Promoters marketed AirBit Club worldwide through expensive presentations.

In members’ dashboards, users could see rising balances, but it was a fiction. For those attempting to withdraw funds, the organizers offered to pay a 50% commission on the requested amount. Some investors complained of accounts being closed allegedly due to a ‘financial crisis caused by the coronavirus.’

Rodriguez, Dos Santos and three of their associates — Scott Hughes, Cecilia Millan and Karina Chaires — laundered the proceeds through cryptocurrencies, trust accounts and sham companies, later using them for personal needs.

The aggregate fraudulent proceeds from AirBit Club totaled about $100 million. The court intends to forfeit these assets.

In particular, Rodriguez, in addition to the prison term, is ordered to pay $65 million in restitution and to forfeit to the government about $1 million from the company’s accounts, on the books of which sat his Gulfstream Jet, 3822.98 BTC (over $100 million at the time of writing), $896,483 in cash, a residence in California, as well as various watches and jewelry.

Dos Santos, Hughes, Millan and Chaires pleaded guilty to conspiracy to commit fraud by means of electronic communications, conspiracy to commit money laundering, and for bank fraud. The maximum aggregate sentence on the three counts is 70 years in prison. They are awaiting sentencing.

In 2019, AirBit Club was one of the largest pyramids in Russia. According to the Bank of Russia, about 60,000 people were involved, and investments exceeded 500 million rubles.