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Jake Soberal and Irma Olguin Jr. — co-founders of Bitwise Industries — pleaded guilty to wire fraud charges Wednesday in federal court as nearly 50 friends and family members packed the Fresno courtroom.
Soberal, 38, and Olguin, 43, recently accepted a plea agreement with federal prosecutors who charged them in November for their role in the collapse of Bitwise , a company that once employed about 900 people in Fresno and across the nation.
Founded in 2013, Bitwise once championed itself as a hub for technology education and innovation.
The U.S. Attorney’s Office say the two tech entrepreneurs misled investors into believing Bitwise was a financially solvent company when in reality it was sinking and in desperate need of millions of dollars.
Bitwise restitution and sentencing
U.S. District Judge Dale A. Drozd went through the plea agreement with the defendants and their attorneys to make sure they understood the consequences of their guilty pleas.
As part of the plea agreement, Soberal and Olguin will pay restitution of no more than $115 million. The judge noted that one New York-based financial institution invested $18.4 million in Bitwise under false and fraudulent pretenses.
To each question the judge asked, Soberal and Olguin replied, “Yes, your honor.”
Still to be determined is their prison sentence. Each charge, conspiring to commit wire fraud and wire fraud, carries a penalty of up to 20 years in prison and a $250,000 fine.
Sentencing is scheduled for Nov. 6. As part of the process, a pre-sentencing report will be prepared by the probation department. Prosecutors have already indicated they will recommend the low end of the sentencing range.
Also factoring in support of a reduced sentence is their willingness to cooperate with authorities, the early acceptance of responsibility and the lack of criminal history.
The plea agreement also allows the defendants to recommend a sentence they believe is appropriate but it can not be less than five years in prison.
Jake Soberal and Irma Olguin comment
Although Soberal and Olguin declined to comment after the hearing, their lawyers, Daniel Olmos and Eric H. MacMichael, issued a statement on their behalf. Olmos represents Olguin and MacMichael is Soberal’s lawyer.
“It has been a priority for Jake and Irma to take full responsibility for their wrongdoing since the moment we met them over a year ago.
“These are two people who made serious mistakes but did not do so out of greed or any desire to enrich themselves. They care deeply about this community and desperately wanted to see Bitwise succeed.
“The important message for today is that Jake and Irma are profoundly sorry for the hurt they’ve caused.”
Former employees at courthouse, along with friends and family
After the hearing, about 50 friends and family gathered in the hallway to show their support. Several people declined to speak on the record, but said they were there for their friends.
A handful of former Bitwise workers also attended the hearing.
Jenn Guerra, a former employee, said she wants to see justice for the workers who lost their jobs.
“They are not above the law — they plead guilty and they should be given the maximum sentence,” she said.
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