Crypto Ponzi scheme AirBit: All but one exec now sentenced
The United States District Court for the Southern District of New York is progressing with the sentencing procedure of key individuals behind the cryptocurrency Ponzi scheme AirBit Club.
The office of the U.S. attorney for New York on Oct. 3 announced the sentencing of three of the five surviving defendants in the AirBit case, including Scott Hughes, Cecilia Millan and Karina Chairez. The sentences came months after all three defendants pleaded guilty to money laundering and other charges in the AirBit case in early 2023.
Hughes, an attorney who allegedly laundered approximately $18 million in AirBit Club fraud proceeds, was sentenced to 18 months in prison. Millan, a senior-level promoter of AirBit Club, was sentenced to five years in prison. Chairez, another senior-level promoter of AirBit Club, was sentenced to one year and one day in prison.
Additionally, Hughes was sentenced to three years of supervised release. Millan and Chairez were also sentenced to three years and three months of supervised release, respectively.
The AirBit Club scheme was launched in late 2015 and was promoted as a “multi-level marketing club” in the cryptocurrency industry. The defendants provided promising presentations to trick investors into thinking that AirBit Club had guaranteed daily returns from crypto mining and trading. But instead of funding AirBit’s promoted crypto operations — which in fact had never been the case — $100 million of investors’ money went to the pockets of its founders and promoters.
Despite some users complaining about withdrawal delays and hidden fees in early 2016, the AirBit Club scheme managed to maintain its fraudulent activity until 2020.
Announcing the sentences, U.S. attorney Damian Williams stressed that Hughes, Millan and Chairez each played a key role in perpetuating the AirBit Club pyramid scheme.
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“At the top-tier of promoters, Millan and Chairez for years aggressively solicited investments from and misled hardworking and unsophisticated investors to line their own pockets,” Williams said, adding:
“Today’s sentences send a message that anyone who facilitates cryptocurrency investment schemes — not only those at the very top of the pyramid — will face serious consequences for such crimes.
This comes after AirBit Club co-founder Pablo Rodriguez was sentenced to 12 years in prison in late September 2023. Dos Santos, another co-founder who has pleaded guilty to charges including wire fraud conspiracy, money laundering and bank fraud conspiracy, is scheduled to be sentenced on Oct. 4, 2023.
Santos will be the last defendant to be sentenced out of a total six defendants behind AirBit Club. Jackie Aguilar, who pled guilty in February 2023, reportedly passed away in May, a few weeks prior to sentencing.
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After nearly a year of legal proceedings, a South Korean court acquitted former Wemade CEO Jang Hyun-guk of market manipulation charges.
Are Rachel Reeves’s fiscal rules quite as iron clad as she insists?
How tough is her armour really? And is there actually scope for some change, some loosening to avoid big tax hikes in the autumn?
We’ve had a bit of clarity early this morning – and that’s a question we discuss on the Politics at Sam and Anne’s podcast today.
Politics Live: Reeves to reform financial regulations
And tens of billions of pounds of borrowing depends on the answer – which still feels intriguingly opaque.
You might think you know what the fiscal rules are. And you might think you know they’re not negotiable.
For instance, the main fiscal rule says that from 2029-30, the government’s day-to-day spending needs to be in surplus – i.e. rely on taxation alone, not borrowing.
And Rachel Reeves has been clear – that’s not going to change, and there’s no disputing this.
But when the government announced its fiscal rules in October, it actually published a 19-page document – a “charter” – alongside this.
And this contains all sorts of notes and caveats. And it’s slightly unclear which are subject to the “iron clad” promise – and which aren’t.
There’s one part of that document coming into focus – with sources telling me that it could get changed.
And it’s this – a little-known buffer built into the rules.
It’s outlined in paragraph 3.6 on page four of the Charter for Budget Responsibility.
This says that from spring 2027, if the OBR forecasts that she still actually has a deficit of up to 0.5% of GDP in three years, she will still be judged to be within the rules.
In other words, if in spring 2027 she’s judged to have missed her fiscal rules by perhaps as much as £15bn, that’s fine.
A change could save the chancellor some headaches. Pic: PA
Now there’s a caveat – this exemption only applies, providing at the following budget the chancellor reduces that deficit back to zero.
But still, it’s potentially helpful wiggle room.
This help – this buffer – for Reeves doesn’t apply today, or for the next couple of years – it only kicks in from the spring of 2027.
But I’m being told by a source that some of this might change and the ability to use this wiggle room could be brought forward to this year. Could she give herself a get out of jail card?
The chancellor could gamble that few people would notice this technical change, and it might avoid politically catastrophic tax hikes – but only if the markets accept it will mean higher borrowing than planned.
But the question is – has Rachel Reeves ruled this out by saying her fiscal rules are iron clad or not?
Or to put it another way… is the whole of the 19-page Charter for Budget Responsibility “iron clad” and untouchable, or just the rules themselves?
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Is Labour plotting a ‘wealth tax’?
And what counts as “rules” and are therefore untouchable, and what could fall outside and could still be changed?
I’ve been pressing the Treasury for a statement.
And this morning, they issued one.
A spokesman said: “The fiscal rules as set out in the Charter for Budget Responsibility are iron clad, and non-negotiable, as are the definition of the rules set out in the document itself.”
So that sounds clear – but what is a definition of the rule? Does it include this 0.5% of GDP buffer zone?
Read more:
Reeves hints at tax rises in autumn
Tough decisions ahead for chancellor
The Treasury does concede that not everything in the charter is untouchable – including the role and remit of the OBR, and the requirements for it to publish a specific list of fiscal metrics.
But does that include that key bit? Which bits can Reeves still tinker with?
I’m still unsure that change has been ruled out.
The Justice Department says two LA Sheriff deputies admitted to helping extort victims, including for a local crypto mogul, while working their private security side hustles.
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