Fresno investors lost millions to Bitwise founders. Will they ever see the money again?
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Inside a standing-room-only courtroom, former Bitwise investor Flavia Takahashi-Flores felt a sense of justice when a judge sentenced the company’s co-founders Jake Soberal and Irma Olguin Jr. to prison for bilking millions from investors like her.
A federal judge on Tuesday sentenced Soberal to 11 years and Olguin to nine years in prison, plus three years of supervised release. He also ordered them to pay back $115 million of investors’ money.
It’s uncertain how much of the restitution Soberal and Olguin will be able to pay.
What is certain is they will start paying it even while in custody.
The Bureau of Prisons will garnish an inmates’ commissary, which includes money put there by family and friends as well as income from prison work, at 50% to pay restitution, said a source familiar with the process who asked not to be identified.
After they are released, the U.S. Probation Office uses a formula to determine how much they’ll pay monthly during their three years of supervised release.
It’s also possible that, after supervised release, the government would garnish wages and seize tax refunds to continue payment. The debt also can’t be wiped away by bankruptcy.
Lawyers for the defendants acknowledged in court documents that paying for their financial crimes will be lifelong.
“Mr. Soberal does not contest a restitution order. He will likely spend the rest of his life repaying investors for his conduct. Mr. Soberal’s financial obligations will be particularly challenging to navigate when he reintegrates with society,” according to court filings.
Bitwise investor isn’t hopeful of repayment
Investor, Takahashi-Flores isn’t hopeful she will see any repayment of her $200,000 loan.
When the Fresno-based technology company shut down in May 2023, it left 900 workers, 400 of them in Fresno, without jobs.
It also left investors, like her, empty handed.
“Mentally, I have written it off,” she said Thursday. “It’s gone.”
Like many local investors and lenders, Flores felt especially wounded because she had a relationship with Soberal and Olguin. They all started out as budding entrepreneurs in Fresno about 13 to 15 years ago.
Takahashi-Flores was the founder of P*DE*Q, a company selling bite-sized, tapioca-based cheesy bread snacks inspired by her native Brazil. She ran the company for 11 years, from 2011 to 2022.
In May 2023, Soberal called her, asking for a $200,000 loan to help close a real estate deal. She was promised a 10% return.
She agreed because she trusted him, she said.
“I wired him the money on May 17 and then by May 31, it all fell apart,” she said.
Bitwise co-founders to report for prison Marcdh 18
Takahashi-Flores was relieved the judge gave Soberal and Olguin longer prison sentences than the five years their lawyers were asking for. But she was also shook by listening to them openly admit their deceit and contempt for people who supported them financially.
“I had no idea how bad they behaved and for so long,” she said. “They were very deliberate about what they were doing and by not being honest with people. That hurts big time.”
Another local investor who asked not to be identified said he also isn’t holding out a lot of hope for getting his money back. He said he provided financial support on several occasions totaling more than $1 million.
If he does manage to receive some restitution, he said he’s fairly certain it won’t be much.
“If that happens, it will be like reopening an old wound,” he said. “And that’s not worth it.”
Soberal and Olguin report to prison March 18.
This story was originally published December 20, 2024 at 7:30 AM.
