Tech heroes to federal felons. The highs, lows of Bitwise founders’ 11-year saga

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From its birth in the spring of 2013 until its financial collapse in May 2023, Fresno technology/ training/ real estate company Bitwise Industries captured the imagination of a community with its auspicious plans to create a “mothership” of technology entrepreneurship.

Over the past 14 months, however, the focus has shifted to when and how the ambitions of co-founders Jake Soberal, 38, and Irma Olguin Jr., 43, went sideways in what federal investigators called an elaborate Ponzi scheme that bilked investors and lenders out of millions of dollars.

The company’s financial meltdown over the Memorial Day weekend of 2023 led first to a shutdown and bankruptcy that left about 900 employees in Fresno and across the country out of work, then to federal criminal charges for Soberal and Olguin.

The pair surrendered to federal agents in November and originally pleaded not guilty, but on Wednesday each agreed to plead guilty in federal court to one charge of wire fraud and one charge of conspiring to commit wire fraud. They will be sentenced Nov. 6, almost a year after their surrender.

Here are some of the key moments in the Bitwise Industries saga:

• May 9, 2011: Olguin, a software engineer, establishes The Hashtag LLC, a limited liability company, to operate a co-working space in Fresno.
• April 13, 2013: Soberal, an intellectual-property attorney, organizes technology business TechGarden LLC, a limited liability company. By July 1, the company’s name would be changed to Bitwise Industries LLC. Its first home was in a small building at the corner of San Joaquin and L streets, in the Mural District of downtown Fresno. Soberal, the company’s CEO, was joined by Olguin as chief technology officer, and The Hashtag became a part of Bitwise.
• October 2015: Bitwise begins its expansion across downtown Fresno with the opening of Bitwise South Stadium at Van Ness Avenue and Mono Street , in the 100-year-old former Phelan Garage. By 2018, it would expand even more, opening the Bitwise Hive building in a former records warehouse at Ventura and Santa Fe streets. In 2019, it opened the Bitwise 41 building in a former raisin processing plant better known as the former Old Spaghetti Factory building at Cesar Chavez Boulevard and R streets. By this time, it was also launching operations in Bakersfield, Merced and Oakland.
• November 2016: Olguin, who grew up in a family of farm laborers in the Fresno County town of Caruthers, is promoted to co-CEO along with Soberal. Olguin, describing herself as a queer Latina, soon became a symbol of the company’s diversity, recognized by such publications as Forbes and Fast Company.
• 2022: Bitwise announces plans to expand and commence building renovation projects in cities across the U.S. , including Buffalo, NY; Chicago, Ill; El Paso, Texas; Greeley, Colo.; Las Cruces, New Mexico; and Toledo, Ohio.

• May 29, 2023: In an exclusive telephone interview with The Fresno Bee, Soberal and Olguin announce that Bitwise, confronting significant financial problems, furloughed its workforce of almost-900 employees and apprentices across the U.S., including about 300 to 400 in the Fresno area. Bitwise’s board of directors fired Soberal and Olguin a few days later .
• June 2023: Multiple sources confirm to The Fresno Bee that the FBI had launched a criminal probe into Bitwise’s financial collapse to look into allegations of fraud to entice investors and lenders to provide money to the company.
• June 28, 2023: BW Industries Inc., the parent company of Bitwise Industries, and four associated companies file for Chapter 7 bankruptcy protection in Delaware , where it was incorporated. The company cited debts adding up to tens of millions of dollars, not counting unpaid wages to employees.
• Nov. 9, 2023: Federal prosecutors charge Soberal and Olguin – who had surrendered that day to agents – with one count each of wire fraud , based on investigations by the FBI, the IRS and the federal Securities and Exchange Commission. The criminal complaint alleges that the pair began working to conceal Bitwise’s troubled financial condition since at least January 2022 to defraud investors and lenders. The SEC files its own civil complaint over similar allegations. Soberal and Olguin initially plead not guilty to the criminal charges.
• July 17, 2024: In an agreement with federal prosecutors, Soberal and Olguin each enter guilty pleas to one count of wire fraud and one count of conspiracy to commit wire fraud. The agreement calls for the pair to pay restitution of up to $115 million. Each charge carries a potential penalty of up to 20 years in prison plus a $250,000 fine. The pair is set to be sentenced on Nov. 6.