A Connecticut man pleaded guilty in federal court to defrauding investors out of $20 million in loans that were made to Bitwise Industries.
Driving the news: Andrew Adler, 31, partnered with David Hardcastle of Fresno between December 2022 and May 2023 to give Bitwise around $20 million in hard money loans through their entity Startop Investments LLC.
- They used a syndicate of investors to fund the loans, misleading them by altering the original loan documents to make it appear that Bitwise had a significantly less interest rate on the loans.
- They also forged the signature of Bitwise co-CEO Jake Soberal on the altered documents to make the loans appear less risky and more appealing to investors.
- Adler and Hardcastle received tens of thousands of dollars in origination fees for the loans and would have made millions of dollars in secret profits from the actual interest rates that Bitwise agreed to. But Bitwise collapsed in May 2023, leading the investors to lose nearly all of the $20 million.
The big picture: Adler pleaded guilty to conspiracy to commit wire fraud, while Hardcastle was arrested a few weeks ago and charged with conspiracy to commit wire fraud and wire fraud.
- Hardcastle was charged separately, and the charges remain pending.
What we’re watching: Adler’s sentencing is scheduled for June 2 by U.S. District Judge Jennifer Thurston.
- He faces a maximum of 20 years in prison and a $250,000 fine for the conspiracy to commit wire fraud charge.
- If Hardcastle is convicted, he would face a maximum of 20 years in prison and a $250,000 fine for each charge.
