The founders of a failed California tech company were charged by federal authorities Thursday for his or her roles in a $100 million fraud scheme during which they bankrolled their lavish lifestyles and hefty salaries.
Irma Olguin, Jr. and Jake Soberal, who headed the Fresno-based startup Bitwise Industries, surrendered to authorities on charges they conspired to commit wire fraud and took thousands and thousands of dollars from various businesses and individuals, the US attorney for the Eastern District of California announced.
The pair allegedly created a tangled web of lies and fabricated documents to create the illusion the private technology company was succeeding.
They’re accused of fabricating bank statements, lying to investors, providing false financial information to their board of directors, forging documents, and using buildings Bitwise not even owned as collateral for loans, “all while lining their very own pockets,” United States Attorney Phillip Talbert said in a press release.
Olguin and Soberal allegedly agreed to begin their complicated string of lies in January 2022, 16 months before Bitwise abruptly collapsed — despite recent reports the corporate was value over $500,000,000 and was financially sound.
The duo allegedly faked its financial records to acquire investments, loans and other funding, which they put toward Bitwise’s payroll and fringe advantages, outfitting the corporate’s office spaces and repaying debts owed to prior lenders.
Irma Olguin, Jr. and Jake Soberal allegedly agreed to fake the success of Bitwise Industries to achieve investor funding. SFGATE
Additionally they took care to meet their very own $600,000 annual salaries, investigators said.
When the scheme was finally exposed in May 2023, the corporate’s 900 employees and apprentices were immediately furloughed and later laid off.
Olguin and Soberal were fired by the corporate’s board of directors and Bitwise filed for bankruptcy protection the next month.
Bitwise Industries abruptly collapsed in May 2023, leaving 900 employees without jobs.SFGATE
“These kinds of white-collar crimes often root from greed and mismanagement and leave hard-working tax-paying residents damaged of their wake,” Mark Silva, IRS Criminal Investigation Acting Special Agent in Charge of the Oakland Field Office, said in an announcement.
The pair have admitted to carrying out the scheme, but plead not guilty in court in a Fresno courthouse Thursday.
They claimed they did so in a real effort to resuscitate the dying business.
“Jake and Irma have taken full responsibility for the mistakes they made while attempting to preserve Bitwise. Their sincere desire to not see Bitwise fail caused them to make quite a few grave and consequential errors in judgment,” lawyers for Soberal and Olguin said in an announcement.
Each have agreed to a bar stopping them from serving as officers or directors of public corporations, in addition to other penalties, the SEC said.
If convicted, the 2 face a maximum penalty of 20 years in prison and a $250,000 wonderful.
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