The criminal proceedings against a number of individuals involved in fraudulent cryptocurrency scheme AirBit Club continue at the New York Southern District Court. On January 12, 2021, the United States Government updated the Court on the discovery process.
Since August 2020, the Government has made significant productions of discovery in this case, including copies of search warrants, the contents of email accounts obtained pursuant to search warrants, the images and forensic reports of several electronic devices, phone records, bank records, materials obtained from search warrants executed at the residences of many of the defendants, and materials from the Securities and Exchange Commission (SEC).
In addition, the Government has made available for inspection the contents of the Airbit Club website, which alone constitutes approximately 5 terabytes of data. This week, the Government anticipates making available the contents of approximately 25 additional electronic devices, the contents of certain social media accounts obtained pursuant to search warrants, phone extractions from a cooperating witness in this case, as well as additional email data.
The Government anticipates that it will take at least another 60 days to complete its production of discovery, the outstanding items of which include additional electronic devices obtained pursuant to search warrants, certain materials obtained from defendant Scott Hughes, an attorney, which are subject to a filter review, as well as materials obtained from victims and the reports of victim interviews.
Accordingly, the Government asked the Court to adjourn the pretrial conference for a period of 60 days, which will allow the Government to complete production of discovery and defense counsel to review the discovery and consider what, if any, motions they wish to make. The Government consulted with defense counsel for each defendant, who consent to the adjournment.
Accordingly, Judge George B. Daniels signed an order adjourning the status conference to March 25, 2021.
Let’s recall that, on August 18, 2020, the Department of Justice announced charges against a number of individuals behind AirBit Club. The list included Pablo Renato Rodriguez, Gutemberg Dos Santos, Scott Hughes, Cecilia Millan and Jackie Aguilar.
The defendants participated in a coordinated scheme in which victim-investors were induced to invest in AirBit Club based on the promise of guaranteed profits in exchange for cash investments in club “memberships”. Promoters falsely promised the victims that AirBit Club earned returns on cryptocurrency mining and trading and that the victims would earn passive, guaranteed daily returns on any membership purchased.
Rodriguez, Dos Santos, Hughes, Millan, and Aguilar traveled throughout the United States, and around the world to places in Latin America, Asia, and Eastern Europe, where they hosted lavish expos and small community presentations aimed at convincing investors to purchase AirBit Club memberships.
Hughes, an attorney licensed to practice law in California, had previously represented Rodriguez and Dos Santos in a Securities and Exchange Commission investigation related to another investment scheme known as Vizinova before aiding Rodriguez and Dos Santos in perpetrating the AirBit Club Scheme by, among other things, helping to remove negative information about AirBit Club and Vizinova from the internet.
In total, the defendants laundered at least $20 million in proceeds of the scheme through various methods.