U.S. prosecutors have indicted a group of individuals in connection with conducting a Ponzi scheme centered around cryptocurrency mining fraud.
The five people indicted — Pablo Renato Rodriguez, Gutemberg Dos Santos, Scott Hughes, Cecilia Millan and Jackie Aguilar — allegedly promised would-be investors outsized rewards for their investments in a membership-based program known as AirBit Club.
As the Department of Justice described:
"Beginning in late 2015, AirBit Club, through its founders, RODRIGUEZ and DOS SANTOS, as well as its promoters (the “Promoters”), including MILLAN and AGUILAR, marketed AirBit Club as a multilevel marketing club in the cryptocurrency industry. Promoters falsely promised Victims that AirBit Club earned returns on cryptocurrency mining and trading and that Victims would earn passive, guaranteed daily returns on any membership purchased."
Yet the cryptocurrency mining and trading operation didn't actually exist, prosecutors alleged in an unsealed indictment, and instead, the individuals were said to have enriched themselves with the proceeds. The group was accused of laundering some $20 million a part of the scheme.
Rodriguez, Dos Santos and Millan were charged with single counts of conspiracy to commit wire fraud, conspiracy to commit money laundering and conspiracy to commit bank fraud. Hughes was charged with one count of conspiracy to commit money laundering and one count of conspiracy to commit bank fraud. Aguilar was charged with one count of conspiracy to commit wire fraud.
"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. Thanks to HSI, the defendants are in custody and facing serious criminal charges," Acting United States Attorney Audrey Strauss said in a statement.