Report: FBI probing Bitwise Industries collapse

The tech venture’s collapse on Memorial Day and the subsequent reverberations have prompted Federal investigators to look at the matter, sources say.

Bitwise Industries, the Fresno-based tech and real estate company that collapsed last month, is now subject to a criminal investigation by the FBI. 

The big picture: According to a McClatchy report, the FBI has launched an investigation into Bitwise and its leadership. 


  • While the report did not detail any specific names, Bitwise’s former leadership group was helmed by co-CEOs Jake Soberal and Irma Olguin. Board member Ollen Douglass now serves as the company’s interim president. 
  • GV Wire also reported that the Department of Justice is looking into Bitwise as well, although it remains to be seen what allegations the federal authorities are looking into given their stance to not confirm or deny any investigation. 

The backstory: As part of the fallout from the May 29 furloughing of the company’s 900 employees – and later termination – The Sun reported that Bitwise had taken 401k contributions from employees’ retirement accounts all the way back to March 17. 

  • Bitwise had deducted 401k contributions from employee paychecks yet had not been distributing the funds into the John Hancock 401k accounts. The missing contributions are valued at over $1 million. 
  • Other items of interest for the federal investigations could revolve around a $1 million contract that Bitwise had with the City of Fresno with federal American Rescue Plan Act dollars. 
  • Fresno City Council canceled the contract following the company’s collapse. Bitwise had received $500,000 in ARPA funds so far. 

State of play: Two California court cases prosecuted by the U.S. Attorney’s Office in recent years surrounding the embezzlement of funds from retirement plans could provide a blueprint for what’s to come. 

  • A 2019 case in Sacramento County ended with the CEO of a real estate firm pleading guilty to pension embezzlement after making unauthorized transfers of over $1.2 million from the pension accounts. 
  • Another case in Shasta County saw the CEO of a student recruiting recruiting and retention services company was convicted for embezzlement after withholding $125,000 from 401k accounts.
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