Fresno businessman faces federal charges for allegedly defrauding Bitwise investors
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A Fresno businessman and his partner have been indicted by a federal grand jury for fraudulently convincing investors to loan millions of dollars to the failed Bitwise Industries.
David Hardcastle, 61, of Fresno, is charged with six counts, including conspiracy to commit wire fraud and substantive wire fraud for defrauding investors in loans made to Bitwise.
Also charged was Andrew Adler, 31, of Greenwich, Connecticut, who has entered a plea agreement with prosecutors and agreed to plead guilty to conspiracy to commit wire fraud. Adler is scheduled to enter his guilty plea in court next month.
According to court documents, Hardcastle and Adler carried out their scheme from December 2022 through May 2023 by giving Bitwise an approximately $20 million hard money loan, usually cash, through a company they created specifically for that purpose.
They then recruited other investors to participate in loaning money to Bitwise.
“In doing so, they altered the original loan documents to make it appear that Bitwise was obligated to pay significantly less interest on the loans than was true. They also forged the signature of Bitwise’s Co-CEO, Jake Soberal, on the altered documents. This made the loans appear less risky and therefore more appealing to the investors,” according to court filings.
Hardcastle and Adler received tens of thousands of dollars in origination fees for the loans and stood to make millions more in secret profits from the higher, undisclosed interest rates had the loans been fully repaid, according to court filings.
The defendants are also accused of creating a reserve account of $700,000 from one of the loans that investors did not know existed. Reserve accounts are used to protect investors in the event the borrower does not repay the loan on schedule.
Prosecutors alleged those reserve funds were used to make an unrelated investment in another company they operated.
Bitwise did not repay loans; investors lost nearly all money
When Bitwise collapsed in May 2023, the loans were not repaid and the investors lost nearly all their money.
Since the collapse, which left 900 laid off workers in its wake, the company’s founders, Soberal and Irma Olguin Jr. pleaded guilty to wire fraud charges and were sentenced to report to prison on March 18. Soberal received an 11-year sentence and Olguin received nine years in prison.
Hardcastle and Adler each face a maximum statutory sentence of 20 years in prison and a $250,000 fine for the conspiracy to commit wire fraud charge. Hardcastle also faces another 20 years in prison and a $250,000 fine for each of the substantive wire fraud charges.
This story was originally published February 3, 2025 at 4:22 PM.
