Irma Olguin Jr. wore a black top with a white dress jacket and gray slacks. Her co-defendant, Jake Soberal, wore a dark blue suit. In federal court in Fresno on July 17 they looked calm and confident, although one thing they knew for sure was that they were both going to prison.
The pair were the now-infamous co-CEOs of Fresno’s Bitwise Industries. They swindled $115 million in loans and investments, they say, in order to keep their corporate experiment in worker training and small business tech consulting alive once it hit hard times.
They both pled guilty, standing before Judge Dale Drozd, to one count of wire fraud and one count of conspiracy to commit wire fraud. Each of the two counts carries a possible sentence of 20 years in federal prison and a $250,000 fine. According to sentencing guidelines, their minimum sentence would be five years.
Judge Drozd asked Olguin and Soberal a series of questions under oath, mostly to ascertain that the meaning of their guilty pleas was clear, and that the pleas were authentic. Ending speculation that Olguin was herself conned by a more culpable Soberal, they took equal responsibility and affirmed that they had not been pressured to plead guilty by their co-defendant.
At one point, the judge mentioned by way of evidence that a payment of around $18.5 million, acquired by fraudulent means, was wired from a party in New York to a Bitwise bank account in California. Although there were many such payments uncovered by the FBI, just that one satisfies the charge of wire fraud.
An electric moment was when the defendants were asked if they practiced a “scheme or artifice to defraud.” They both answered “Yes, your honor.”
Curiously, it was mentioned in the proceedings that the defendants would make restitution for the losses suffered by their victims. It is not known what funds they possess to make any such restitution.
The day following their court date, Olguin and Soberal released a two-page letter addressed to “Former Teammates, Investors, Lenders and your respective families.” The letter was published in its entirety in the Fresno Bee, on yourcentralvalley.com and by GV Wire.
It read, in part, “We wanted so badly to see Bitwise succeed, to see Fresno succeed, and to see our teammates succeed. That gave rise to the false belief that those things were only possible if Bitwise kept going. Over a critical period of time with much on the line, we absolutely, unequivocally, and irreversibly chose the wrong way.
“We are deeply sorry.”
“Probably our most burning desire,” they wrote, “is to talk about how our mistakes don’t diminish what so many of you were working on so tirelessly at Bitwise. The idea that a company, an industry, and a city can be different and better—that was real, and you did so much good. Our poor decisions trying to save the company shouldn’t erase your ten years of authentic impact.”
They went on to say that they want a dialogue about what happened in the implosion of Bitwise: “The next thing is that we will each almost certainly be sentenced to serve time in federal prison. We don’t know for how long, or where. That part will come soon enough. Until then, we are both here. Here to listen and make space to honor your feelings. If information can help create clarity, and clarity can help create peace, sign us up for that.”
Of course, real, tangible damage was done because of this Olguin and Soberal “dynamic duo of destruction.” Investors lost millions and employees lost wages that they might never recoup—so merely honoring “feelings” is not exactly making things right.
Throughout this whole ordeal, Olguin and Soberal have demonstrated that they’re smooth and sweet talkers. They sweet-talked investors, employees and their own board for years until they got caught. And, after making a deal with the Feds, they are back at it with this letter—which seems to be a bid to both establish their remorse with the court and win forgiveness.
Olguin and Soberal will be sentenced on Nov. 6.
