A hard money lender has been sentenced to over three years in prison for defrauding investors out of $20 million in connection with Bitwise Industries.
The big picture: U.S. District Judge Jennifer Thurston sentenced Andrew Adler, 31, to three years and five months in prison for defrauding investors in loans made to Bitwise.
- Along with the time behind bars, Thurston ordered Adler to pay $9.3 million in restitution and to forfeit another $1 million.
Driving the news: From December 2022 through May 2023, Adler and his Fresno business partner, David Hardcastle, gave Bitwise around $20 million in hard money loans.
- Adler, who is from Greenwich, Connecticut, and Hardcastle did not fund the loans and did not have any money at risk. They syndicated the loans to other investors and altered the original loan documents to make it appear that Bitwise was paying a significantly lower interest rate. They also forged former Bitwise co-CEO Jake Soberal’s signature on the altered documents to make the loans appear less risky and more appealing to investors.
- One of the loans included a secure interest reserve of around $714,000 that the investors did not know about. Adler and Hardcastle used that reserve to make an unrelated investment in another company that they controlled.
- They also made tens of thousands of dollars in fees for originating the loans and could have made millions more in secret profits had Bitwise not itself been a fraud scheme that collapsed.
What we’re watching: Hardcastle has been indicted for his role in the fraud and is presumed innocent unless proven guilty at a trial.
What they’re saying: “The collapse of Bitwise Industries exposed Andrew Adler’s lies to investors in securing a multi-million-dollar loan, which he used to secretly line his pockets.” said FBI Sacramento Field Office Special Agent in Charge Sid Patel. “This investigation clearly demonstrates the FBI’s tenacity and is a testament of the great work performed by FBI agents and personnel in our Fresno Resident Agency.”
