FRESNO, Calif. (KSEE/KGPE) – The founders of Bitwise Industries, Jake Soberal and Irma Olguin Jr., will be charged in a $100 million fraud scheme in federal court, the Department of Justice announced, after they self-surrendered on Thursday.

Federal officials describe Soberal and Olguin Jr. as the “founders and leaders of the failed Fresno-based technology company.” They will be charged with conspiring to commit wire fraud and taking more than $100,000,000 from various businesses and individuals, according to prosecutors.

“The defendants could have chosen simply to admit the failure of Bitwise’s business model. Instead, they used lie after lie to pull over $100 million into a dying venture through fraud,” U.S. Attorney Phillip A. Talbert said.

Federal prosecutors say Jake Soberal and Irma Olguin Jr. lied to investors, provided fake documents to the board of directors, forged documents, and claimed to own buildings Bitwise no longer owned as collateral for loans “all while lining their own pockets.”

The investigation also saw assistance from the IRS, FBI, and U.S. Securities and Exchange Commission.

“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,” said IRS Criminal Investigation Acting Special Agent in Charge Mark Silva of the Oakland Field Office.

Bitwise furloughed all of its employees in May 2023; employees were officially laid off in June 2023 with an email that read “We regret to inform you that your position will be eliminated Wednesday, June 14, 2023. This is a permanent job elimination.”

According to court records, Bitwise collapsed despite recent reports the company was worth over $500 million and was financially sound. The complaint alleges Olguin, Jr. and Soberal agreed to lie to board members, investors, lenders, and others about Bitwise’s finances to obtain investments, loans, and other funding. Federal officials say the profits from that went towards paying Bitwise’s payroll and fringe benefits, including Olguin, Jr. and Soberal’s $600,000 per year salaries, outfitting the company’s office spaces, and repaying debts owed to prior lenders.

If convicted, Olguin, Jr. and Soberal each face a maximum statutory penalty of 20 years in prison and a $250,000 fine.

In June, Fresno Mayor Jerry Dyer said he “wouldn’t be a bit surprised if there’s some type of federal criminal investigation” following the closure of Bitwise Industries.

Federal charges against the Founders and Co-CEOs of Bitwise Industries will be announced in Fresno at 1:00 p.m. and you can watch the press conference live as it happens in the video player above.