FRESNO, Calif. (KFSN/KMJ) — The co-founders of failed tech company Bitwise now know their punishment after being sentenced in federal court.
It comes after Jake Soberal and Irma Olguin Jr. pleaded guilty to two counts of wire fraud earlier this year.
Soberal was sentenced to eleven years in prison, and Olguin was sentenced to nine.
They will also need to pay back nearly 115 million dollars.
Federal prosecutors say Soberal and Olguin worked together to defraud investors and lenders out of millions of dollars before the scheme collapsed in May 2023.
“Defendants likened themselves to gods and joked about deceiving their well-intentioned investors while committing a massive fraud,” said U.S. Attorney Talbert. “They lied repeatedly to pull in over $100 million to a dying business venture that they knew never had any meaningful revenue. To make themselves rich and keep up the façade, they used fabricated bank statements, false financial information, forged documents, and fake loan collateral. These sentences serve as a reminder of the hazards of such financial crimes, and my office will continue to work with the FBI, IRS Criminal Investigation, and our law enforcement partners to vigorously investigate and prosecute those who commit them.”
The two each pleaded guilty to wire fraud are expected to report to prison on March 18, 2025.
“The willful and egregious fraud carried out by Irma Olguin Jr. and Jake Soberal will have long lasting impacts on not only those who invested in the well-orchestrated scam of Bitwise, but also the nearly 1,000 employees and contractors who abruptly lost their jobs when the Bitwise swindlers ran out of money,” said IRS Criminal Investigation (IRS-CI) Oakland Field Office Assistant Special Agent in Charge Kulbir Mand. “White-collar crimes are damaging to victims, families, and communities alike. IRS-CI and its law enforcement partners are experts at investigating financial crimes and building cases that lead to justice. Today’s sentencing should serve notice that the consequence for committing white-collar crime is severe.”
The judge sentenced Soberal to more prison time because he was an attorney and should have known what he was doing was illegal.
Olguin, Jr. and Soberal received national media attention by appearing in publications like Forbes Magazine and giving Ted Talks where they portrayed Bitwise as being a success. They also made a substantial annual salary. By early 2022, however, the company was not generating any revenue and was running low on funds. Thereafter, Olguin, Jr. and Soberal fabricated financial information for its board and for investor materials and doctored audit reports to make it appear as though Bitwise was generating revenues and turning a profit. They also altered bank statements and forged bank representatives’ signatures on bank correspondence to inflate the company’s cash balances. They did so to convince people that Bitwise was excelling when the company was actually failing.
In a news release, Talbert went on to say the defendants hired unqualified family members and friends, which allowed them to compartmentalize information and work in secret to spin the false statements needed to conceal and continue with their fraud. For these reasons, Olguin, Jr. and Soberal received special sentencing enhancements.
