Updated: Dec 4, 2020
The indictment claimed that when victims attempted to withdraw their funds as early as 2016, delays and secret fees amounting to more than half of their requested withdrawal were encountered.
In Manhattan federal court on August 18, 2020, an Orange County personal injury attorney was charged with trying to launder $20 million from an alleged cryptocurrency Ponzi scheme via an account supposed to hold the funds of his customers.
In the Southern District of NY, prosecutors accused Scott Hughes, an orange county personal injury attorney based in Newport Beach, California, of conspiracy to commit money laundering and conspiracy to commit bank fraud in connection with the suspected foreign fraud ring, focusing on the alleged AirBit Club cryptocurrency mining and trading company.
Hughes and four other defendants sold "memberships" in the company to investors with the promise of guaranteed income, according to an indictment unsealed Tuesday, although no Bitcoin mining or trading ever took place on their behalf.
Instead, prosecutors said the accused invested the cash of the victims on lavish expenses and used the money to put on a series of costly exposures to attract more investors worldwide.
"In a statement announcing the charges, Manhattan U.S. Attorney Audrey Strauss said As charged, the defendants placed a modern-day twist on an age-old investment scam, offering unprecedented rates of guaranteed return on phantom investments in cryptocurrencies.
Prosecutors said Hughes represented co-defendants Pablo Renato Rodriguez and Dos Santos of Gutemberg in the U.S. Investigation of a separate investment scheme by the Securities and Exchange Commission before helping the AirBit ring.
They then worked to launder the money through various domestic and international bank accounts, including a trust account controlled by Hughes, according to the indictment. Hughes was able to guide the investments into "promotional events and sponsorships designed to further promote the AirBit Club scheme" through that account, prosecutors said.
The indictment said that when victims attempted to withdraw their funds as early as 2016, they were confronted with delays and secret fees amounting to more than half of their requested withdrawal. In one case, a victim was told that she should "bring new blood" into the AirBit Club Scheme in order to collect her returns, prosecutors claimed.
"These alleged fraudsters pulled out all the stops to sell their scheme with enticing recruitment events to their victims, then shamelessly used the proceeds of their scheme to recruit additional victims through even more aggressive and lavish marketing pitches," Peter Fitzhugh, special agent in charge of the New York field office of Homeland Security Investigations, said in a statement.
The indictment also charged Cecilia Millan and Jackie Aguilar, suspected promoters who advertised AirBit as a "crypto-currency industry multilevel marketing club," with conspiracy to commit wire fraud. Millan also faces allegations of conspiracy to commit money laundering and bank fraud.
The case was allocated to the U.S. District Judge George B. Daniels of New York's Southern District.
How To Find Honest Personal Injury Lawyers In Orange County
If you are involved in an accident in Orange County, you should immediately consult with a pre-screened Orange County personal injury attorney. To get an unbiased referral to a pre-screened and reputable California attorney you should:
By calling the 24-hour lawyer referral hotline at 1-661-310-7999