The co-CEOs of Bitwise, Irma Olguin Jr. and Jake Soberal, appeared in federal court on Thursday to face charges of conspiring to commit wire fraud and taking over $100 million from individual and institutional investors. The federal investigation alleges that their fraud scheme began no later than January 2022, resulting in a series of lies and altered documents to deceive investors.
According to Attorney Roger Bonakdar, who represents many former employees, the defendants had been evading service but were ultimately served in open court. The former employees allege that Olguin and Soberal swindled investors out of tens of millions of dollars by providing false financial information about Bitwise. Monique Winkler, Regional Director of the Securities & Exchange Commission, stated that the defendants repeatedly lied about Bitwise’s key financial metrics to attract investors.
The complaint alleges that Olguin provided altered bank statements to investors, showing the company had over $23 million in the bank in March 2022, when in reality, the account only held $325,000. US Attorney Phillip Talbert also stated that altered audits were used in an attempt to secure an additional $5 million from an investor. The $100 million obtained from investors was allegedly used for company expenses, including payroll, fringe benefits, and the co-CEOs’ salaries.
The fraud was only discovered in May 2023 when Bitwise abruptly laid off all employees and informed them that their latest paychecks would likely bounce. This left hundreds without three weeks of pay and no job.
Both Olguin and Soberal entered not-guilty pleas and were released on conditions, including surrendering their passports, limited travel, and unspecified bonds. A bond status hearing is scheduled for December 8th, with a preliminary hearing set for January 25th.
For more updates on this developing story, stay tuned to ABC30.