Mastermind of $20 million Bitwise loan scheme working on a plea deal with feds
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- Prosecutors and defense negotiate a plea deal for Hardcastle in Bitwise fraud case.
- Hardcastle faces up to 20 years per wire-fraud count and $250,000 fines.
- Scheme involved $20 million hard-money loans, altered loan documents and forged signature.
A plea deal is in the works for the Fresno businessman accused of defrauding investors to loan millions of dollars to the failed Fresno-based startup company Bitwise Industries.
David Hardcastle, 61, was indicted by a federal grand jury Jan. 30 on charges of conspiracy to commit wire fraud and substantive wire fraud. Also charged in the case was Andrew Adler, 31, of Greenwich, Connecticut, who has already struck a deal with the government by pleading guilty to conspiracy to commit wire fraud.
Adler was sentenced to three years and five months and ordered to pay $9.3 million in restitution jointly and severally with the other Bitwise defendants. He must also forfeit $1 million.
According to court filings, Hardcastle was scheduled to appear for a status conference in federal court on Nov. 19, but that was continued as both sides try and resolve the case.
“This case has been pending for approximately eight months. The government has produced discovery to defense counsel, which includes thousands of pages of detailed financial records. The parties have also met and conferred regarding a potential plea offer to resolve this case and another more complex case that is uncharged, and they are hopeful that resolutions will soon be reached. Finally, defense counsel has further investigation to perform,” Hardcastle’s attorney, Jeffrey Hammerschmidt, and Assistant U.S. Attorney Joseph Barton wrote in a motion to the court.
If the government and Hardcastle’s defense team can’t strike a deal a jury trial is scheduled to begin on October 20, 2026.
Hardcastle faces a maximum 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.
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.
Both Soberal and Bitwise co-founder Irma Olguin are currently in prison after pleading guilty to defrauding investors of more than $115 million. Soberal was sentenced to 11 years and Olguin received a nine-year sentence.
