Bitwise co-founders officially plead guilty to charges

FRESNO, Calif. (KFSN) -- A guilty plea in federal court on Wednesday as Irma Olguin Jr. and Jake Soberal admitted to fraud in the case involving Bitwise Industries, the collapsed Fresno tech company they used to run.

"We began the work of Bitwise Industries here in our hometown of Fresno, California, with the hope of serving our community and advancing our city," Soberal said in a 2022 YouTube video.

But after a multi-state expansion, the company unraveled due to financial troubles last spring. Leaders furloughed and ultimately laid off more than 900 employees, like Jenn Guerra.

"Things that were happening, like our paper checks, bounced checks, and then this chaos," she told Action News earlier this month.

The company's collapse caught the attention of the FBI.

In court documents, federal prosecutors say Olguin and Soberal worked together by trying to defraud Bitwise's investors and lenders.

In one charge, the government says the two transferred $18.5 million into Bitwise's bank account, taking the money by making false promises.

Olguin and Soberal had fought the charges until Wednesday when their attorneys and the prosecutors told the federal judge the sides had reached a deal.

"They entered guilty pleas to two felony counts. One count of wire fraud and another count of conspiracy to commit wire fraud," attorney Roger Bonakdar said outside the courthouse. He is not involved in the federal case but represents some former employees in a civil class action lawsuit.

Action News was there as Olguin and Soberal left the courthouse.

A guilty plea in federal court on Wednesday as Irma Olguin Jr. and Jake Soberal admitted to fraud in the case involving Bitwise Industries.

"Jake and Irma, what's your message to the Bitwise employees who say they still haven't been paid? Why no comment, Irma? Why did you decide to plead guilty in court today?" Olguin and Soberal said nothing.

The two could now face up to 40 years in federal prison and $500,000 in fines. They have also agreed to pay up to $115,000,000 in restitution.

"I don't believe they're above the law," Guerra said Wednesday. "They deserved to be sentenced just like anyone else."

Sentencing will come on November 6, when the two co-founders are due back in court.

Soberal and Olguin cannot change their plea based on the judge's final sentence.

While Soberal and Olguin pleaded guilty to two federal felonies, the class action lawsuit against them is still moving forward.

Roger Bonakdar is the attorney who represents multiple former Bitwise employees in that case.

"The civil case is for the wage theft and the other losses that 900 employees and their families experienced when Bitwise imploded," said Bonakdar.
"So, this change of plea won't affect that. We're still going forward with that."

Bonakdar said class action lawsuits can take years, but they've been aggressive in making progress for their clients,

He hopes to have this civil case settled before the end of the year.

"Hopefully we'll soon have an announcement to make that will give folks some relief and a few steps closer to closure," said Bonakdar.

Earlier this year, former Bitwise employees were able to gain access to some of their 401(k) contributions. But there are still many road blocks Bonakdar's clients are facing.

"Many of them haven't been able to file their taxes because they haven't received their W2's," said Bonakdar. "There's just been this ripple effect and continuing hurt."

Hans Kam, who worked as a Solutions Engineer Manager at Bitwise, isn't surprised by Wednesday's plea.

"It's very disappointing that Jake and Irma still have not apologized or communicated with their ex-employees," said Kam. "So to me they seem to be looking out only for themselves.'

Kam said the company owes him about $10,000 but doesn't expect to see any of those paychecks.

"The only thing I can I can hope for is for the judge to make an example of them," said Kam. "So that other employers will have to think twice before they do anything that would hurt the employees."

"They're still hoping for some peace, they're hoping for some recovery," said Bonakdar. "They're hoping for some acknowledgement that they were trampled."

Bitwise planned to expand into Downtown Merced.

But we have learned that UC Merced will now be leasing that building, which will be home to the university's Extension, Professional and Continuing Education program.

For news updates, follow Gabe Ferris on Facebook, Twitter and Instagram.

For news updates, follow Ana Torrea on Facebook, Twitter and Instagram.