Two promoters of the AirBit Membership Ponzi scheme have been sued by the US Securities and Alternate Fee.
The SEC’s lawsuit was filed on August 18th and identifies AirBit Membership as an “funding membership” that’s ‘not organized in any jurisdiction and has no formal authorized existence.’
Named as defendants within the swimsuit are AirBit Membership promoters Cecilia Millan, a North Carolina resident and Margarita Cabrera, a resident of Florida.
Each Millan and Cabrera are members of AirBit Membership’s “Grasp Council” (a gaggle of high promoters).
The homeowners of AirBit Membership, Pablo Renato Rodriguez Arevalo (California) and Gutemberg Dos Santos (Panama) are named as associated people. They aren’t defendants within the SEC’s lawsuit.
The SEC’s lawsuit opens by recalling prior litigation in opposition to Rodriguez and Dos Santos, pertaining to their operation of the Vizinova Ponzi scheme.
Vizinova fraud prices had been settled in 2016.
At across the similar time, Rodriguez and Dos Santos created AirBit, which they managed.
Defendants and different AirBit promoters solicited new traders all through america by in-person funding recruitment conferences and conferences, YouTube movies, funding shows posted to the web, and word-of-mouth.
The defendants this time round are Cecilia Millan and Margarita Cabrera. Whereas litigation in opposition to Ponzi promoters is welcome, it’s unclear why the SEC hasn’t gone after Rodriguez and Dos Santos once more.
Defendants’ promotional efforts had been in each Spanish and English, and focused the LatinX and Spanish-speaking communities for funding.
In keeping with our printed Might 2016, through which BehindMLM recognized AirBit Membership as a Ponzi scheme, the SEC observes;
By way of its shows and advertising and marketing supplies, AirBit claimed that its traders have earned on common returns of 57.6% to 126%, with the speed of return rising with the extent of preliminary funding.
AirBit promised traders every day returns of $7 to $13 for each $1,000 invested, and instructed traders they may have entry to their returns at any time in both digital belongings or U.S. {dollars}.
Among the funds Defendants obtained for his or her promotion and gross sales of AirBit securities had been paid from a checking account that, upon data and perception, contained AirBit investor funds.
In actuality, the AirBit compensation plan paid traders bonuses for recruiting new members to AirBit, moderately than compensating them for promoting these new members an actual services or products.
The “memberships” provided and offered by AirBit and Defendants had been securities within the type of funding contracts.
Helping AirBit Membership launder invested funds was “Lawyer A”, who offered Rodriguez and Dos Santos with a belief account.
Lawyer A’s belief account contained funds associated to the AirBit providing. Starting in early 2017 by November 2019, Lawyer A’s belief account started receiving massive money deposits and enormous wires from an unknown entity that, upon data and perception, had been AirBit investor funds.
Rodriguez directed Lawyer A to simply accept massive quantities of money that, upon data and perception, had been AirBit investor funds.
These money transactions often happened at native buying malls or at Rodriguez’s house.
We’re conscious of Rodriguez (proper) working with one lawyer prior to now. Mentioned lawyer despatched BehindMLM a stop and desist in 2016, in an try to censor our reporting of Rodriguez’s fraudulent exercise.
On the time of publication we are able to’t verify whether or not “Lawyer A” is similar lawyer.
Round November 2019, exercise within the account decreased considerably, and Lawyer A’s belief account was closed in February 2020.
Throughout the interval from early 2017 by November 2019, roughly 85% the exercise in Lawyer A’s belief account concerned receiving massive wires and money deposits related to, upon data and perception, the AirBit providing, then dispersing these funds to Rodriguez, Dos Santos, Defendants, and different AirBit promoters.
No point out of buying and selling, due to course there wasn’t any.
With respect to Cecilia Millan and Margarita Cabrera, the SEC alleges they had been drawing upwards of half one million and $150,000 a month out of Airbit Membership respectively.
The SEC identifies Millan’s and Cabrera’s conduct as securities fraud.
When actively selling AirBit, taking investor money and orders, and receiving funds for recruiting traders, Defendants weren’t registered as brokers, nor had been they related to a registered broker-dealer.
The SEC’s filed lawsuit in opposition to the 2 defendants seeks a securities fraud injunction, disgorgement (return of ill-gotten positive aspects) and civil penalties.
Keep tuned for updates on the case as we proceed to trace it.
I’ve additionally simply now checked Pacer for a brand new lawsuit in opposition to Rodriguez and Dos Santos. As of but there isn’t one however I’d be very stunned if one isn’t pending, or has already been filed underneath seal.
As per a collection of spammy press-releases despatched out earlier this 12 months, Renato Rodriguez is believed to have fled to South America.
He refers to himself as a “blockchain professional”, “high fintech advisor” and “the South American Satoshi”.
Gutemberg Dos Santos is in Panama and claims he’s a “crypto billionaire”.
Replace nineteenth August 2020 – Shortly after publishing this text I learnt Renato Rodriguez, Gutemberg Dos Santos, their lawyer Scott Hughes and Cecilia Millan have all been indicted and arrested.
Margarita Cabrera seems to have escaped prison prices.