Bitwise board fires CEOs Jake Soberal and Irma Olguin Jr amid mounting financial woes
FRESNO, Calif. (KFSN) -- Bitwise Industries has now fired CEOs Jake Soberal and Irma Olguin Jr. as the company's financial woes continue to come to light.
In an email sent to employees Friday night, Ollen Douglass, a Bitwise board member, announced that he took over the role of the company's interim president on June 1. The action was confirmed in a press release sent out by the company after 9 pm on Friday.
The decision to fire Soberal and Olguin comes after the company furloughed its 900 employees without any notice on Memorial Day.
Since then, newly uncovered legal documents have revealed more financial problems for the Fresno-based tech company.
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Last year, Bitwise received a multi-million dollar payment after the federal government approved the Employee Retention Credit program during the pandemic.
Instead of waiting for the checks from the IRS, Bitwise entered into two contracts to sell its $6.1 million in tax credits from the government to 1861 Acquisition, an investing firm.
1861 Acquisition agreed to give Bitwise an immediate loan for the money in exchange for a fee.
As part of the agreement, Bitwise was to tell the IRS to send the tax credits directly to 1861 Acquisition to pay off the loan.
Instead, the lawsuit alleges that Bitwise deposited the checks from the IRS into its own bank accounts, breaking the contract with 1861 Acquisition.
Bitwise is also on the hook for unpaid business taxes in Fresno dating back to September 2021.
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Action News has also learned that Bitwise stopped making payments to their insurance companies and 401K contributions at the end of March.
Bitwise's board of directors says it has launched an investigation into what led up to the company's furloughs and apparent mismanagement of funds.
Douglass, who has a background in auditing, says he will be overseeing the investigation into the company.
As of Friday night, Action News' multiple attempts to reach out to Soberal and Olguin for comments have gone unanswered.
Through all of this, the companies furloughed employees are rallying together.
They have set up an event to give back to BitWise workers who are still in the dark about their employment status.
"What we're going to offer are resources such as free professional headshots, on the spot interviews, resume help. Any other sort of assistance," Furloughed Bitwise employee Priscilla Del Toro said.
Click here for more coverage of Bitwise's Financial Issues.
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