US authorities charge AirBit Club with mining Ponzi scheme fraud and money laundering

The proceeds from the AirBit Club mining fraud project were used to purchase luxury cars, jewelry, and real estate instead of for Bitcoin mining and trading.

The operator of a global cryptocurrency mining Ponzi scheme has been charged with fraud and money laundering following an investigation by the U.S. Department of Homeland Security.

According to an announcement from the U.S. Department of Justice , members of the AirBit Club were arrested and appeared in court on August 18, while the remaining accomplices were arrested in Panama and are awaiting extradition to the United States.

The AirBit scheme was launched in late 2015 and was sold as a multi-level pyramid scheme in the cryptocurrency mining investment industry. The defendants allegedly hosted lavish presentations to encourage investors to part with their cash by promising guaranteed daily returns from cryptocurrency mining and trading.

In this fraudulent scheme, investors were induced to invest in AirBit Club based on the promise of guaranteed profits in exchange for a cash investment in the club’s “membership.” Beginning in late 2015, AirBit Club, through its founders Rodriguez and Dos Santos, and promoters including Millan and Aguilar, marketed AirBit Club as a multi-level marketing project in the cryptocurrency industry. Salespeople made false promises of guaranteed daily returns to investment victims.

The truth is that Rodriguez, Dos Santos, Millan, and Aguilar amassed vast sums of money, spending the victims’ money on cars, jewelry, and luxury homes, and funding lavish exhibitions to recruit more victims.

Rodriguez, Dos Santos, Hughes, and Millan attempted to conceal the AirBit Club scheme by laundering the proceeds of the scheme through several domestic and foreign bank accounts, including an attorney trust account managed by Hughes. In total, the defendants cleared at least $20 million in fraud proceeds.

The wire fraud and money laundering charges carry a maximum sentence of 20 years in prison, while the bank fraud charge carries a maximum sentence of 30 years in prison.

As early as 2016, club members who wanted to withdraw their money were met with excuses, delays and hidden fees, and were reportedly forced to recruit new members if they wanted to get their returns.

The defendants also attempted to conceal the scheme and its participants by demanding membership dues in cash, allegedly laundering at least $20 million through various trusts and bank accounts, and removing negative information about the scheme from the internet.