Five defendants implicated in a cryptocurrency fraud and money laundering scheme known as AirBit Club have received prison sentences. They have been ordered to surrender their illicit profits, according to an official press release from the U.S. Attorney.
The individuals involved in this case are Scott Hughes, an attorney who facilitated the movement of approximately $18 million obtained through AirBit Club’s fraudulent activities, Cecilia Millan and Karina Chairez, high-ranking promoters of AirBit Club, along with Pablo Renato Rodriguez and Gutemberg Dos Santos, both co-founders of the organization.
They marketed AirBit Club as a multilevel marketing organization within the cryptocurrency industry and made fraudulent claims about earning returns. Although masquerading as a cryptocurrency company, it operated as nothing more than a pyramid scheme.
The promised returns turned out to be fictitious. The defendants never engaged in cryptocurrency mining or trading activities on behalf of the investors. Instead, they enriched themselves by organizing extravagant expos to lure in more victims.
Numerous victims who tried to withdraw money from the AirBit Club Online Portal faced excuses, delays, and hidden fees that often amounted to over 50% of their requested withdrawals. To make matters worse, some victims received notices on the portal stating that their accounts were closed due to the economic and financial crisis triggered by COVID-19, resulting in the loss of their initial investments.
Scammers Used Tactics To Conceal The Nature Of Airbit Club Operation
To maintain secrecy of the AirBit Club scheme and their control over the funds it generated, scammers enforced a cash-only policy for acquiring memberships. Additionally, they employed third-party cryptocurrency brokers to obfuscate their activities further.
To conceal the illicit nature and source of the proceeds, they resorted to money laundering techniques utilizing both domestic and foreign bank accounts. One notable instance involved Hughes overseeing an attorney trust account. It was purportedly designated for his law practice’s client funds, but they used it to mask the origin of the scheme’s profits.
The defendants have collectively pleaded guilty and been ordered to forfeit their fraudulent proceeds from AirBit Club. These include seized or restrained assets: U.S. currency, Bitcoin, and real estate valued at approximately $100 million.
Judge Daniels has handed down the following sentences: Scott Hughes is sentenced to 18 months in prison, accompanied by three years of supervised release. Cecilia received a five-year prison sentence and three years of supervised release.
Karina Chairez is given a one-year and one-day prison sentence. Additionally, she will serve three months under supervised release. Pablo Renato Rodriguez and Gutemberg Dos Santos jointly received a 12-year prison sentence.
Consequently, the sentencing serves as evidence of law enforcement agencies’ commitment to combat cryptocurrency-related fraud and protect investor interests.
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