The global fraud and money laundering ring has been accused of laundering at least $20 million
The operators of a cryptocurrency-based Ponzi scam have been charged with internationally coordinated fraud and money laundering based on an investigation by the US Department of Homeland Security.
Pablo Renato Rodriguez, Gutemberg Dos Santos, Scott Hughes, Cecilia Millan and Jackie Aguila were involved in a money-laundering ring that defrauded individuals through investments in AirBit Club, a purported cryptocurrency mining and trading company.
According to an announcement by the US Department of Justice, four of the five alleged operators of AirBit were arrested and due to appear in court on August 18. The fifth operator has been arrested in Panama and is due to be extradited to the US. The operators are accused of defrauding victims of tens of millions of dollars by enticing victims to invest in AirBit Club based on the promise of high returns.
Launched in late 2015, the scheme was presented as a multi-level marketing club in the cryptocurrency industry. The defendants intentionally hosted lavish presentations to lure victims into investing in the scheme. The promoters falsely stated that AirBit Club earned returns on cryptocurrency mining and trading and promised passive, guaranteed daily returns on any membership purchased.
The defendants travelled around the world to places in Latin America, Asia and Eastern Europe where they held community presentations to convince victims into investing in AirBit Club membership.
Following the investment, victims were given access to an online AirBit Club portal to view the purported returns on membership.
Although the portal showed that “profits were growing”, in reality, there was no cryptocurrency mining or trading taking place. The victims’ investment was spent on luxury goods, real estate and to finance more extravagant presentations to lure in more victims.
As club members began wanting to withdraw their proceeds in 2016, they were met with excuses, delays and hidden fees. They were also told to recruit more members if they wanted to receive returns. The defendants also attempted to conceal their involvement in the multi-level ponzi scam and the money laundering process by insisting members pay in cash.
Acting US Attorney, Audrey Strauss, said of the matter: “As alleged, the defendants put a modern-day spin on an age-old investment scam, promising extraordinary rates of guaranteed return on phantom investments in cryptocurrencies”.
The defendants have been accused of laundering at least $20 million of proceeds through various trusts and bank accounts. One of the defendants, Scott Hughes, who is a licensed lawyer in the State of California, was tasked with removing negative reviews against AirBit from the internet.
Written by Harshini Nag