‘Series of lies’ should land founders of Fresno tech darling Bitwise in prison | Opinion
I used to believe in Bitwise Industries, or at least in the image the company projected to its employees and the outside world.
Now I believe Jake Soberal and Irma Olguin Jr., its co-founders and former CEOs, deserve an extended stay in federal lockup.
Surely that’s a sentiment that, by now, has become widespread.
The hammer that everyone knew was in motion came down Thursday, less than six months after Bitwise’s spectacular and stunning implosion. Soberal and Olguin have surrendered to authorities, and each now face criminal charges that carry a maximum of 20 years in prison and a $250,000 fine.
The complaint against Soberal and Olguin, assembled by investigators from the Federal Bureau of Investigation, the Internal Revenue Service and the Securities and Exchange Commission, states the Bitwise bosses committed wire fraud and bilked various businesses and individuals out of more than $100 million. They allegedly did so by fabricating financial information in board presentations, forging bank statements and engaging in a litany of other white-collar misdeeds.
During a press conference at the Robert E. Coyle Federal Building in downtown Fresno, U.S. Attorney Phillip Talbert displayed two versions of Bitwise bank statements from March 2022, one real and one altered. The altered version showed a balance $23 million greater than the real one.
“The problem here is that the defendants were lying to everybody … who relied on bank statements and audit reports that they intentionally altered to hide the truth,” Talbert said. “This wasn’t one simple lie. This was a series of lies backed up with false documentation in order to get all this money.”
Despite the fact that Olguin and Soberal each entered not guilty pleas Thursday during an initial court appearance before a federal judge, a swifter fall from grace for Fresno’s former first couple of tech could scarcely be imagined.
Neither has spoken publicly since granting an interview to The Bee shortly after they abruptly furloughed 900 of their employees in a six-minute video call on Memorial Day evening. They also declined to answer to questions from local media when exiting the courthouse. That prolonged silence, plus their self-surrender, tells me they don’t really have a defense besides their own hubris and greed.
In addition, according to the FBI criminal complaint, the former co-CEOs told investigators “they were the only ones at Bitwise who were involved in the criminal activity and that they limited other employees’ access to information to conceal their scheme to defraud.”
Will case go to trial?
All that indicates the case against Soberal and Olguin may be adjudicated without going to trial. It will be interesting to see whether the pair actually serves time in federal prison. Based upon the seriousness and enormity of the charges, they absolutely deserve to.
“The alleged deceptive business practices of Mr. Soberal and Ms. Olguin Jr. have directly and negatively impacted over 900 families from the Fresno and Bakersfield communities. Today’s complaint is a starting point toward justice for those families,” IRS Criminal Investigation Acting Special Agent in Charge Mark Silva said in a news release.
“These sorts of white-collar crimes often root from greed and mismanagement and leave hard-working, tax-paying citizens damaged in their wake.”
Olguin and Soberal, lest anyone forget, also face an array of civil lawsuits from creditors and former employees attempting to claw back any remaining money from their alleged frauds.
Not very often do federal agencies levy fraud and corruption charges against Fresno-area residents, and when it does happen a public official is typically the target. (See ex-Congressman TJ Cox.)
But this might be the first time in decades — possibly since Operation Rezone in the 1990s — that such high-profile business leaders have been ensnared. And the charges facing the former Bitwise CEOs are more serious by several orders of magnitude.
Soberal and Olguin, according to the complaint, didn’t just swindle apparently clueless investors and members of the company’s board of directors. They defrauded hundreds of loyal employees who believed in Bitwise’s dream of uplifting marginalized cities like Fresno and Bakersfield with higher-paying tech jobs.
The dream remains powerful and worthwhile. Even though the two people who sold it the hardest allegedly relied on blatant fraud to keep their ship afloat.
I used to think Olguin (in particular) and Soberal were visionaries.
Now I just think they’re crooks.
This story was originally published November 9, 2023 at 4:45 PM.
