Read and listen to more coverage of Bitwise Industries from KVPR.
FRESNO, Calif. – In a document filed in federal court by federal prosecutors just a week before the co-founders of Bitwise Industries were sentenced to prison, text messages appear to show the two celebrating defrauding an investor.
The messages were taken from the cell phones belonging to Jake Soberal and Irma Olguin, Jr. and were presented as one of the final pieces of evidence used to sentence them.
A judge sentenced Soberal to 11 years in prison, and nine for Olguin, Jr. They will also have to pay a combined $114.6 million in restitution. That’s the same sum the two admitted they had defrauded out of investors when they pleaded guilty to wire fraud and wire fraud conspiracy earlier in the year.
According to records of the text messages, in April 2023, just a month before the company’s collapse, Olguin, Jr. wrote, “What you did this week is nothing short of extraordinary. Kind of incredible to be doing this dumb f—ing thing with you.”
Soberal responded, saying, “I think it’s a God thing bro…old white, conservative rich dudes. Raving about our crazy, money-losing, progressive ideas.”
Desperate entrepreneurs or ego chasers?
The attorneys representing Soberal and Olguin, Jr. painted them as desperate entrepreneurs who made “some very very bad decisions” in order to save their company and make payroll. In their own prepared statements made at the sentencing hearing, the pair admitted to deceiving their employees and their investors.
Soberal directed his apology to his former co-workers, his investors, his wife and his three children, saying that he confused the company with his own identity.
“If Bitwise was good, I was good. If Bitwise was worthy, I was worthy,” he said. “I believed I had to lie for Bitwise to succeed and no one would be hurt while I was lying.”
Olguin, Jr. also regretted allowing her personal story to be intertwined with the company’s.
“I fear investors will mistrust Mexican Americans, queer people and women even more than before…I fear I drag them down with me today,” Olguin, Jr. said. She added, “I’m sorry I broke your heart…I’m so sorry.”
Assistant U.S Attorney Joseph Barton described Bitwise Industries as “a complete fraud” led by two people who chased ego and notoriety and “weaponized” their values in order to pull in more and more money.
Soberal was given two more years of prison than Olguin, Jr. because he has a law degree, according to judge John C. Coughenour. He also said the main reason the sentences weren’t higher was because he couldn’t fairly order them to more prison time than another well-known fraudster, Elizabeth Holmes, received in 2022.
Holmes is the disgraced former CEO of Theranos, a biotech startup that defrauded investors of billions of dollars and endangered lives after it was revealed that their flagship blood-testing technology was fraudulent. She received a prison sentence of 11 years and three months.
Broken hearts and dreams
Even before Coughenour’s sentencing, many in the Fresno courtroom were in tears. For many former Bitwise employees, this had been their first time hearing their leaders’ voices since the company’s abrupt and very public collapse in May 2023.
Around 80 people packed into the standing-room-only courtroom last Tuesday in the federal courthouse in downtown Fresno.
After the sentencing, former employees told KVPR they felt raw, shocked and emotionally confused. One former employee said many violent criminals have received less prison time.
Tessa Williamson, the company’s former creative director, believes Soberal and Olguin, Jr. “are being made an example of.”
She said Bitwise was a good company that brought positive change to its employees and the community. And although she acknowledged Soberal and Olguin, Jr. made mistakes, she said their sentences are too high.
“I feel like it's extreme. I don't think that they're a threat to society,” she said.
Angelica Cano, a former marketing copywriter for Bitwise, said that the details that have come to light since the company’s downfall have broken her heart.
“There was a closeness. I was friends with Irma [Olguin, Jr.],” she said. “My mom got sick, she came to the hospital.”
She described the hearing as an “emotional sandstorm” where former employees, friends and family members were sharing a collective grief. She said after the hearing that she wasn’t yet ready to weigh in on the fairness of the sentence, but she felt some prison time was necessary.
“My heart goes out to the families, but I think accountability is the most important thing here,” she said.
Even those who approved of the sentence were somber.
“White collar crime has victims, white collar crime has consequences,” said John Pearl, Public Affairs Officer for the Internal Revenue Service’s Crime Investigation unit. “We would hope that is an adequate deterrence for those who attempt to defraud others in the future.”
