The US government says they have extradited Gutemberg Dos Santos, co-founder of Panama’s Airbit Club Ponzi scheme and is now awaiting his court trial in Manhattan. Dos Santos faces charges related to his role continuing a “cryptocurrency” scam that deceived victims of “tens of millions of dollars.”
Fraudulent Claims
According to the US Justice Department (DOJ), Dos Santos and five aides are accused of falsely promising victims that they will earn passive income from cryptocurrency mining. However, investigations found that “no mining or bitcoin trading was actually carried out on behalf of victims.”
In a statement on November 30, the DOJ said that Dos Santos – a citizen of Brazil and the United States – instead “held luxury expos and small community presentations aimed at convincing victims to buy Airbit Club membership.” Once Dos Santos and his assistants had gained control of the money, they would go on hoodwink unknowingly victims to believe that everything was above board. DOJ’s press release explains:
Following a victim investment, a promoter gave the victim access to an Airbit Club online portal to view the alleged earnings on membership. Although victims saw ‘profits’ accumulating on their Online Portal, those comments were false.
With victims convinced that their “investment” earned them astronomical returns, Dos Santos and his assistants meanwhile used victims’ funds to enrich themselves. As the DOJ statement explains, the accused “spent victims’ money on cars, jewelry, and luxury homes, and funded more extravagant expos to recruit more victims.”
Bring in the ‘New Blood’
According to the DOJ, one of the accused, lawyer Scott Hughes, has been separately accused of “helping to remove negative information about Airbit Club and Vizinova from the internet.” Hughes has previously represented Dos Santos when he faced a US SEC investigation.
In addition, the DOJ accuses Dos Santos and the co-defendants of using “excuses, delays, and hidden fees” to deny victims access to their funds. In one case, a female victim was told “she should bring ‘new blood’ into the Airbit Club’s scheme to receive her forms.” The victim was informed of this after she made a complaint about her inability to withdraw.
In another case, a victim was told that his account had been closed and the main investment had been lost. One of the accused mentioned the following as reasons for the loss:
Due to the implementation of the Financial Sustainability Reserve, policy # 34 of the Airbit Club Terms and Conditions, due to the economic and financial crisis caused by (Covid-19).
According to the DOJ, a total of $ 20 million is believed to have been launched by Dos Santos and his aides. As a result, Dos Santos, who has to answer three charges, faces a maximum sentence of 70 years in prison.
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