Bitwise founders agree to pay millions in restitution and plead guilty to two felonies
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Jake Soberal and Irma Olguin Jr., founders of the defunct Bitwise Industries, will plead guilty to one count of conspiring to commit wire fraud and one count of wire fraud along with agreeing to pay millions in restitution as part of their plea deal with prosecutors, according to court documents.
As part of the plea deal, Soberal and Olguin agreed to plead guilty and are cooperating with federal authorities who have charged them with lying and misrepresenting their finances to gain millions of dollars in investment from lenders and venture capitalists.
The agreement filed Friday in U.S. District Court in Fresno lays out the details of the deal that is expected to reduce the potential sentence for the two charismatic entrepreneurs by multiple years.
Each count carries a maximum penalty of 20 years, plus a fine of $250,000. But in exchange for their cooperation and other factors, the U.S. Attorney’s office will recommend the defendants be sentenced to the low-end of the federal sentencing guideline range.
The defendants can also recommend to the court whatever sentence they believe is appropriate, but it cannot be less than 5 years in prison.
Their dream of creating a tech-based company that would serve as a hub to launch technology education and innovation collapsed on May 29, 2023, after going broke. About 900 people in Fresno and across the nation lost their jobs.
After Bitwise folded, Soberal and Olguin told federal investigators that they were solely responsible for the financial charade that cost investors approximately $115 million between January 2022 and May 2023.
In their plea agreements that are identical, Soberal and Olguin agree to pay no more than $115 million in restitution. It is unclear where those funds will come from.
“The defendant agrees that all criminal monetary penalties imposed by the Court, including his restitution, will be due in full immediately at the time of sentencing and subject to immediate enforcement by the government,” according to Soberal’s plea agreement. “The defendant also agrees that any payment schedule or plan set by the Court for the remainder of his restitution is merely a minimum and does not foreclose the government from collecting the remainder at any time through all available means.”
Soberal and Olguin will also have to make a “full and complete disclosure” of their assets and financial condition within three weeks of entering their guilty plea.
A change of plea hearing is scheduled on July 17 in U.S. District Court in Fresno.
This story was originally published July 12, 2024 at 4:05 PM with the headline "Bitwise founders agree to pay millions in restitution and plead guilty to two felonies."
