NEW YORK, NY – Five individuals involved in an international pyramid scheme focused on cryptocurrency have been sentenced, following the collective forfeiture of assets valued at approximately $100 million.
Scott Hughes, an attorney, was sentenced to 18 months in prison for laundering around $18 million in proceeds from the fraudulent AirBit Club. Cecilia Millan and Karina Chairez, both senior promoters of the scheme, received five years and one year plus one day in prison, respectively. Pablo Renato Rodriguez, co-founder of AirBit Club, was previously sentenced to 12 years in prison on September 26.
The sentences were imposed by U.S. District Judge George B. Daniels and announced by Damian Williams, the United States Attorney for the Southern District of New York. As part of their sentences, all defendants are ordered to forfeit fraudulent proceeds, including seized assets consisting of U.S. currency, Bitcoin, and real estate.
Beginning in late 2015, the AirBit Club presented itself as a multilevel marketing club in the cryptocurrency industry. Victims were falsely promised guaranteed returns on their investments. The defendants traveled globally, hosting events to induce people into buying AirBit Club memberships. No actual Bitcoin mining or trading took place; instead, the promoters and co-founders enriched themselves at the expense of their victims.
Hughes, a California-licensed attorney, assisted in removing negative information about AirBit Club and another scheme known as Vizinova from the internet. He also laundered money through an attorney trust account.
Victims who attempted to withdraw their money faced obstacles such as hidden fees and delays. In April 2020, one victim was told his investment was lost due to the financial crisis caused by Covid-19.
The defendants used various methods to conceal the scheme, including laundering through multiple bank accounts. These accounts were used to direct victim funds towards personal expenses and promotional events to recruit more victims.
Hughes, 47, of Newport Beach, California, and Millan, 41, of Greensboro, North Carolina, are also sentenced to three years of supervised release. Chairez, 47, of Modesto, California, received three months of supervised release.
Gutemberg Dos Santos, co-founder of AirBit Club, has pled guilty to multiple charges. His sentencing is scheduled for October 4.