Co-founder of global crypto Ponzi scheme extradited by DOJ

Gutemberg Dos Santos was arrested for his part in the fraudulent AirBit Club scheme

In a press release published yesterday, the US Department of Justice (DOJ) announced that they had extradited Gutemberg Dos Santos, a citizen of Brazil and the US, from Panama on 25 November. Dos Santos, along with co-defendants Scott Hughes, Jackie Aguilar, Karina Chairez, Cecilia Millan and Pablo Renato Rodriguez, is charged for his part in fraud and money laundering as a co-founder of the alleged global Ponzi scheme AirBit Club.

From late 2015, victims of the scheme were persuaded to invest in AirBit Club based on the promise of guaranteed returns earned by cryptocurrency mining and trading. An online AirBit portal showed victims purported profits accumulating on their investments, when in fact no mining or trading actually took place. Instead, Dos Santos, Aguilar, Chairez, Millan and Rodriguez spent investors’ money on luxury houses, cars, jewellery and hosting more lavish expos to recruit more victims.

Hughes, a Californian attorney who previously represented Dos Santos and Rodriguez in a Securities and Exchange Commission investigation with regards to another investment scheme, Vizinova, played a part in the more recent scheme by removing negative information about Vizinova and AirBit Club from the internet and managing an attorney trust account that was used to launder at least $20 million of profits.

Homeland Security Investigations (HSI) Special Agent in Charge Peter C. Fitzhugh said “The extradition of Dos Santos reflects the determination of agents from HSI New York’s El Dorado Financial Crimes Task Force to dismantle global criminal organizations, wherever the investigation takes us. Utilizing our broad authorities and network of law enforcement partners, HSI will continue to hunt those who allegedly prey upon innocent citizens for financial gain.”

Dos Santos, 45, was arrested in Panama City on 18 August, while Hughes, Aguilar, Millan and Rodriguez were arrested the same day in the US, and Chairez was arrested in the US on 20 October.

Acting US Attorney Audrey Strauss added “As alleged, Gutemberg Dos Santos played a key role in an international investment scam that promised extraordinary rates of return on phantom investments in cryptocurrencies, defrauding victims of tens of millions of dollars. Thanks to HSI, Dos Santos is now in U.S. custody.”

Dos Santos was due to appear before a magistrate yesterday, charged with conspiracy to commit wire fraud, conspiracy to commit bank fraud and conspiracy to commit money laundering, which carry maximum terms of 20, 30 and 20 years in prison respectively.