FRESNO, Calif. (KFSN) — The co-founders of the failed tech company Bitwise were sentenced to prison on Tuesday in a federal court for their involvement in a massive fraud scheme that defrauded investors out of millions of dollars.
Lead class action attorney Roger Bonakdar, who represents former Bitwise employees, commented, “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 it hurt and the community, but this was the last phase.”
Cameras were prohibited in the courtroom as Fresno County Superior Judge Gary R. Orozco delivered the sentences. Jake Soberal was sentenced to 11 years in prison, while Irma Olguin Jr. received a sentence of 9 years. The judge took into account Soberal’s background as an attorney in his decision to impose a longer sentence.
Bonakdar explained that both defendants were granted a slight reduction in their sentences, as federal guidelines had suggested they face around 150 months. The sentencing followed the pair’s guilty pleas to two counts of wire fraud earlier in the year.
Federal prosecutors described their operation as a Ponzi scheme, where the duo defrauded investors and lenders to perpetuate the fraud. The scheme came to an end in May 2023, leading to widespread financial losses.
As part of their sentencing, Soberal and Olguin are ordered to pay nearly $115 million in restitution. Bonakdar noted that it is unlikely the defendants will ever be able to pay this amount, but it will remain a burden on them for the rest of their lives.
In addition to their prison sentences, Soberal and Olguin are named in a class action lawsuit filed by former Bitwise employees, which resulted in a settlement of $20 million earlier this year. The settlement will be distributed in two phases, with Bonakdar hoping for the first phase payment by early 2025.
The sentencing marks a step toward closure for the employees affected by the collapse of Bitwise. In May 2023, the company’s financial failure led to bounced paychecks, halted health insurance, and severe financial hardship for hundreds of workers.
Former Bitwise employee Jenn Guerra described the mixed feelings she had upon hearing the verdict. “There was a feeling of relief or justice, but there’s also a sense of seeing them as humans and realizing how much potential was wasted,” she said. Guerra also reflected on Olguin’s statement in court, where Olguin admitted the actions were not a mistake but a deliberate effort to mislead.
Guerra, along with other former employees, hopes that the sentence and settlement will provide some sense of closure, though they acknowledge the lasting effects of the fraud. “I feel that, you know, I can move on with my life, but with a sense that justice has been served,” Guerra concluded.
The co-founders, who avoided media attention after the court session, issued an apology on social media in July, expressing regret for betraying the trust of those who supported them. They are scheduled to begin serving their sentences on March 18, 2025.