"This will be the last we hear of Bitwise, I hope, here in Fresno. It's going to leave a scar both on the people that it hurt and the community but this was the last phase," lead class action attorney for former Bitwise employees, Roger Bonakdar, said.
Cameras were not allowed in the federal court room Tuesday, as a judge told Jake Soberal he will spend 11 years in prison while Irma Olguin Jr. will serve 9 years.
The judge citing Soberal's experience as an attorney as a reason for his longer sentence.
"The federal guidelines were approximately 150 months so they both did get some break from the court," Bonakdar stated.
The sentencing comes after the pair pleaded guilty to two counts of wire fraud earlier this year.
Federal prosecutors say the two worked together to defraud investors and lenders out of millions of dollars before the scheme collapsed in May 2023.
"As U.S. attorney Carbajal put it, it was a Ponzi scheme in the sense that you get the next investor, you pay the prior to perpetuate the fraud and that's what we heard today," Bonakdar explained.
Soberal and Olguin will need to pay back nearly $115 million in restitution.
"It's probably unlikely that either one of them are able to pay that, but that's going to hound them the rest of their lives," Bonakdar said.
Bonakdar represents many former Bitwise employees in the class action lawsuit against the pair, which settled at $20,000,000 earlier this year.
He says there will be two phases to the settlement distributions.
"I'm hopeful that we will get a first phase payment at the end of the first quarter maybe beginning of the second quarter of 2025," Bonakdar said.
The sentencing was step toward healing for some former employees.
In May 2023, hundreds of employees' paychecks bounced, their health insurance stopped, and many faced extreme financial hardship.
Some say they are still feeling the impacts, both financially and emotionally.
"A lot of mixed feelings. Of course, there was actually a feeling of relief or of justice, but there's a feeling of, like, seeing (Soberal and Olguin) as humans, and feeling like, God, that's really a waste," explained Jenn Guerra, a former Bitwise employee.
"How sad, like this could have been so different, you know what I mean?"
In court, Olguin spoke to those impacted saying, "this was not a mistake or crime of opportunity. This was a deliberate effort to mislead."
"It's like, 'wow.' I mean, that was like, brutal honesty. In a way, I was relieved that she was so honest in that way. It was like, God, that's really scary," Guerra said in response to Olguin's statement.
Guerra says hopefully both the settlement and sentence can help start the healing.
"I'm sure there's a lot more we don't know about, but for the most part, yes, I feel peace," Guerra said.
"I feel that, you know, I can move on with my I mean, I have already moved on with my life, but with a sense of like their justice has been served in a form."
Action News waited outside the federal court house to ask the co-founders about the fraud, but federal security told us US Marshals had escorted them out of an exit that avoided media.
They did post an apology letter on X back in July, saying they're sorry to have abused and broken the trust that was placed in them.
The two are expected to report to prison on March 18, 2025.
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