Bitwise Industries co-founders Irma Olguin Jr. and Jake Soberal pleaded not guilty Thursday in connection with a wide-ranging white collar criminal investigation that charges them with defrauding investors of $100 million as they ran their Fresno-based technology business. Photo by Julianna Morano/Fresnoland


Olguin Jr. and Soberal pleaded not guilty before U.S. Magistrate Judge Sheila K. Oberto.

Bitwise Industries co-founders Irma Olguin Jr. and Jake Soberal surrendered Thursday to federal authorities in a wide-ranging white collar criminal investigation that charges them with defrauding investors of $100 million as they ran their Fresno-based technology business.

“They used lie after lie to pull over $100 million into a dying venture through fraud,” United States Attorney Phillip Talbert said in a press release Thursday morning, shortly before taking questions from reporters during a press conference at the Robert E. Coyle Federal Building in downtown Fresno.

Moments later, Olguin Jr. and Soberal appeared before a federal judge to begin facing charges by multiple agencies that they deliberately fabricated bank statements, lied to investors, provided false financial information to their board of directors, and used buildings Bitwise Industries was operating in as collateral for loans.

Talbert told reporters a large part of the $100 million collected by the company went toward paying company salaries. He did not elaborate on whether more charges could follow for others involved in the dealings.

At the press conference, Talbert showed bank statements that prosecutors say were doctored by Olguin Jr. and Soberal next to statements obtained through the investigation.

At every step, Talbert said, Olguin Jr. and Soberal “had choices on what to do … and they chose to double down and lie.”

“The defendants were lying to everybody,” Talbert said. Most notably, he said the lie spread in “a community that hoped that dream really was real – that the company could survive and provide those sorts of services here in the Central Valley.”

In May, Bitwise Industries furloughed 900 employees nationwide, including nearly 400 in the Fresno area. The sudden collapse of the company – which promised to create thousands of jobs in the technology sector by bringing in people who didn’t typically get the opportunity to do so – halted projects and investments locally and in various U.S. cities.

Prosecutors said in their announcement Thursday “deceptive practices” like those alleged against Bitwise have “far-reaching consequences.”

The Federal Bureau of Investigations, Internal Revenue Services and the Securities and Exchange Commission were all involved in investigating alleged wire fraud activity by Bitwise Industries.

Investigators further accuse Olguin Jr. and Soberal of inflating Bitwise’s revenues, cash balances and property holdings. Prosecutors say much of the money taken in by Bitwise went toward payroll, retrofitting offices and paying debts to prior lenders. On top of that, the co-founders reportedly each secured $600,000 salaries.

“These sorts of white-collar crimes often root from greed and mismanagement and leave hard working tax paying citizens damaged in their wake,” said IRS Criminal Investigation Acting Special Agent in Charge Mark Silva.

Inside the Courtroom

Olguin Jr. and Soberal took the stand and pleaded not guilty before U.S. Magistrate Judge Sheila K. Oberto. Olguin Jr., 42, looked frail as she took her seat. Soberal, 37, appeared disheveled.

They were allowed to walk out of the courtroom, but will return for a preliminary hearing set for Jan. 25. Olguin Jr. made bond using her mother’s home and Soberal’s family residence was also used as his bond.

Inside and outside the courtroom, tensions were high. Spectators, some of them former Bitwise employees, murmured about what may happen. A mix of shock, rage and disbelief ran across people’s faces as the co-founders made their entrance. In their exit, the visibly emotional former employees shouted at the pair.

“Not guilty? Look what you’ve done. You can’t even look us in the eye,” said former manager Julian Ramos.

Olguin Jr. and Soberal each face up to 20 years in prison for their criminal charges.

Attorney Roger Bonakdar represents about 100 employees in a class action lawsuit against Bitwise. He said seeing Olguin Jr. and Soberal walk out of the courtroom stung his clients.

“One would hope for some more onerous restrictions for people that wiped out 900 families and nearly put 900 families in the street.,” Bonakdar said in remarks to the press.

He called the Bitwise company a “joke.”

Swindling investors with ‘blatant fraud’

The Securities and Exchange Commission brought additional charges against Olguin Jr. and Soberal on antifraud provisions of the federal securities laws for allegedly misleading investors about company finances.

Monique C. Winkler, regional director of the SEC’s San Francisco office, also appeared at the federal building Thursday and said Olguin Jr. and Soberal misrepresented and falsified documents about Bitwise’s financial performance as they raised $70 million in 2022.

The misrepresentations “painted Bitwise as a healthy, growing business,” the SEC stated in a previous press release. Instead, the SEC argues the company faced constant cash shortages and often on the brink of failure. The SEC says the co-founders used “blatant fraud” to deceive investors and raise money.

“In one instance, the defendants allegedly conspired to send a purported screenshot to investors of a company bank account showing a cash balance of $23.4 million. In actuality, the account had only $325,100 in it. That’s not a bank error—that’s fraud,” the SEC charging announcement stated.

Winkler told reporters the misrepresentations were not “small exaggerations.”

“They swindled investors,” Winkler said. “They knew investors would not have invested in Bitwise if they knew the truth about its poor financial condition.”

This story was originally published by KVPR.

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