Airbit Membership defendant Pablo Renato Rodriguez isn’t having a good time in jail.

After his arrest and preliminary denial of bail, Rodriguez contracted COVID-19 in pre-trial custody.

This noticed him topic to a two month lockdown.

Upon launch from lockdown and switch to the Erie County Correctional Facility in New York, Rodriguez then acquired right into a dispute with a “violent inmate”.

The stoush resulted in

a number of fractures of Pablo’s jaw, requiring hospitalization (in addition to 40 days within the jail infirmary), surgical procedure, and his mouth being wired shut for a number of weeks.

Consequently, Rodriguez claims he’s suffered “immense bodily and psychological abuse”.

On September fifteenth Rodriguez requested launch by way of a $10 million greenback bond package deal.

The DOJ have pushed again, citing Rodriguez as a “vital flight threat” with entry to ‘tens of tens of millions of {dollars}’ value of just about unrecoverable and untraceable cryptocurrencies’

Rodriguez is hoping to safe launch by a $10 million greenback bond.

Property securing the bond encompass a enterprise and 7 properties within the US, plus an extra six properties in Mexico and Guatemala if required.

Rodriguez claims he owns two of the properties. The remaining belong to family members and mates.

The enterprise is an accounting agency owned and operated by a good friend of Mr. Rodriguez (in addition to being his good friend’s most important supply of earnings) and is valued at roughly $750,000.

Data from the SEC investigation present the person and his
spouse managed a checking account held within the title of Vizinova Processing that was used within the Vizinova scheme, making him basically a co-conspirator in Rodriguez’s prior Ponzi scheme.

Rodriguez will even be topic to house confinement, GPS monitoring and give up of his journey paperwork.

The DOJ opposes Rodriguez’s request.

The Authorities respectfully submits that the defendant’s proposed bail package deal can not adequately guarantee his look in courtroom in mild of the defendant’s vital ties to Guatemala, his possible entry to tens of tens of millions of {dollars}’ value of just about unrecoverable and untraceable cryptocurrencies, and the truth that he faces robust proof of his guilt.

Following his arrest, Rodriguez signaled he was keen to cooperate with the DOJ.

Rodriguez indicated a willingness to cooperate with the Authorities in change for leniency at sentencing on this case.

In reference to Rodriguez’s efforts to cooperate, the Authorities requested Rodriguez to switch any Bitcoin he managed personally, in addition to any Bitcoin representing Airbit Membership’s investor holdings, to an HSI-controlled Bitcoin pockets.

Rodriguez agreed, and allowed the Authorities to switch roughly 1,323 Bitcoin, presently valued at over roughly $57 million, to an HSI-controlled pockets in or about January 2021.

Nearly instantly following this switch, Rodriguez’s counsel requested if the Authorities would comply with a bail package deal.

When the Authorities refused to comply with bail Rodriguez, his efforts to cooperate ceased, and he retained new counsel.

Studying between the traces, it appears Rodriguez believed handing over $57 million would get him launched.

Upon launch, the plan then might have been escaping to Central America and residing off stolen investor funds.

The DOJ’s investigation into further funds Rodriguez has stashed away continues.

As of September 2021, right here’s the place they’re at;

On Might 25, 2021, HSI executed a search warrant within the Central District of California on the residence of Jorge Alejandro Rodriguez, the defendant’s youthful brother and one of many defendant’s proposed co-signers.

Throughout the search, brokers discovered paper Bitcoin wallets in a secure in Alejandro Rodriguez’s bed room, which Alejandro Rodriguez disclosed had been offered to him by Rodriguez and got here from “the workplace” in Guatemala (which the Authorities understands refers to Grasp Group).

One of many major firms by which Rodriguez laundered the Airbit Membership proceeds was Grasp Group S.A. (“Grasp Group”), a Guatemalan firm owned by Rodriguez and operated by his older brother who resides in Guatemala.

As well as, brokers discovered an online browser window open on Alejandro Rodriguez’s pc exhibiting an extra pockets containing Bitcoin that Alejandro Rodriguez indicated belong to the defendant, in addition to further documentary proof confirming that Alejandro Rodriguez had, the day past, transferred greater than $1 million value of Bitcoin in addition to proof of further transfers between January and Might 2021 of greater than $7 million value of Bitcoin.

HSI additionally seized roughly 39 Bitcoin (presently value roughly $1.6 million) and roughly 1.8 Ethereum (presently value roughly $6,000) from 5 completely different cryptocurrency wallets in Alejandro Rodriguez’s possession.

In different phrases, opposite to Rodriguez’s assertions throughout his proffers that he had turned over to HSI all of his private Bitcoin, and the Bitcoin belonging to victims of Airbit Membership, Rodriguez and his brother had in actual fact transferred tens of millions of further {dollars}’ value of Bitcoin within the months following Rodriguez’s proffers.

The federal government additionally places forth that the $1.5 million in property Rodriguez owns, put up as a part of his bond, can be topic to forfeiture.

I.e. they had been bought with funds tied to AirBit Membership.

Primarily based on its monetary and Bitcoin blockchain evaluation, the Authorities has decided that Rodriguez bought not less than one of many two residences utilizing roughly $2 million in Bitcoin laundered by (Scott) Hughes, making these properties (that are by far probably the most priceless of the properties proposed to safe the bond) forfeitable as proceeds of the charged crime and property concerned in cash laundering.

Whether or not any of the opposite properties had been bought with AirBit Membership funds hasn’t been confirmed.

Primarily based on evaluation by the DOJ nevertheless, it appears extremely possible.

Rodriguez used refined means to maneuver and conceal Airbit Membership proceeds, together with: massive volumes of money, unregulated Bitcoin cost processors, non-public Bitcoin wallets disconnected from any regulated change, overseas financial institution accounts, and overseas firms.

So far, based mostly on a tough calculation, the Authorities has traced that Rodriguez, his firms, and his members of the family obtained not less than roughly $16 million in Airbit Membership proceeds.

This doesn’t account for Airbit Membership funds that by no means touched the U.S. monetary system.

In abstract, the DOJ places forth Rodriguez’s

ties to Guatemala, his monetary sources, and the seriousness of the fees he faces all make the defendant a big flight threat, and the Courtroom ought to deny his movement for bail.

In response to the DOJ’s opposition, Rodriguez places forth ‘ties to
one other nation don’t create a possibility to flee.’

In actual fact, each defendant has the chance to flee. A passport supplies a possibility to flee. Mr. Rodriguez has agreed to show his passport over to the federal government whereas the case is pending.

The vital query is: Will the defendant flee?

As beforehand demonstrated, Your Honor might be moderately assured that Mr. Rodriguez will. [sic]

That final sentence was both an epic personal aim or, sadly extra possible, a typo.

When he thought he was going to give up some bitcoin and get off evenly, Rodriguez

proffered with the Authorities on a number of events between December 2020 and February 2021.

Rodriguez neither professed nor demonstrated his innocence through the proffers.

Quite the opposite, Rodriguez acknowledged, amongst different issues, that he personally managed whether or not traders might withdraw funds from Airbit Membership, and that he participated in recruiting traders into Airbit Membership even when he knew the funds mirrored in victims’ Airbit Membership portal wouldn’t truly be paid to victims.

That has since modified to

the one option to clear his title and transfer on together with his life is to display his innocence at trial.

If convicted of the prison costs introduced in opposition to him, Rodriguez faces 21.8 to 27.25 years in jail.

A call on Rodriguez’s launch movement stays pending.