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Published November 11, 2023, 11:30 PM ET
The founders of a failed California technology company were indicted by federal authorities on Thursday for their role in a $100 million fraud scheme that funded their lavish lifestyles and high salaries.
Irma Olguin, Jr. and Jake Soberal, who ran the Fresno-based startup Bitwise Industries, turned themselves in to authorities on charges that they conspired to commit wire fraud and took millions of dollars from various companies and individuals, according to the U.S. Attorney for the Eastern District of California announced.
The pair allegedly created a tangled web of lies and forged documents to create the illusion that the private technology company was successful.
They are accused of falsifying bank statements, lying to investors, providing false financial information to their board of directors, forging documents and using buildings no longer owned by Bitwise as collateral for loans, “all while lining their own pockets,” according to the US Prosecutor Phillip Talbert said in a press release.
Olguin and Soberal allegedly agreed to begin their complicated series of lies in January 2022, 16 months before Bitwise’s sudden collapse – despite recent reports, the company was worth over $500,000,000 and was financially healthy.
The duo allegedly falsified their financial records to obtain investments, loans and other financing, which they used for Bitwise’s payroll and benefits, furnishing the company’s office space and repaying debts to previous lenders.
Irma Olguin, Jr. and Jake Soberal allegedly agreed to fake the success of Bitwise Industries in order to obtain investor funds. SFGATE
They also made sure to pay their own $600,000 annual salary, investigators said.
When the scheme was finally revealed in May 2023, the company’s 900 employees and trainees were immediately furloughed and later laid off.
Olguin and Soberal were fired by the company’s board and Bitwise filed for bankruptcy protection the following month.
Bitwise Industries abruptly collapsed in May 2023, leaving 900 employees unemployed.SFGATE
“This type of white-collar crime often stems from greed and mismanagement, leaving hard-working, taxpaying citizens harmed,” Mark Silva, IRS Criminal Investigation Acting Special Agent in Charge of the Oakland Field Office, said in a statement.
The pair have admitted carrying out the plan but pleaded not guilty in court Thursday at a Fresno courthouse.
They claimed they did this in a genuine effort to revive the moribund company.
“Jake and Irma have taken full responsibility for the mistakes they made while trying to preserve Bitwise. Their sincere desire not to see Bitwise fail led them to make numerous serious and consequential errors of judgment,” lawyers for Soberal and Olguin said in a statement.
Both have agreed to a bar barring them from serving as officers or directors of public companies, as well as other penalties, the SEC said.
If convicted, the pair face a maximum sentence of 20 years in prison and a $250,000 fine.
With post wires
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