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In what is now one of the most staggering white-collar fraud convictions in recent years, the co-founders of Bitwise Industries have been found guilty of orchestrating a multi-layered financial deception that defrauded investors and local governments out of nearly $100 million. The tech startup, once hailed as a beacon of revitalization for underserved communities, has now collapsed under the weight of its own fabricated promises.
Bitwise positioned itself as a disruptive force in tech education, committed to building opportunity pipelines in overlooked cities. It branded itself as more than just a startup—it was a movement. With buzzwords like “inclusive innovation” and “digital empowerment,” it attracted an impressive roster of city contracts, angel investors, and national press. But behind the glossy website and polished pitches was a company hemorrhaging money and run by executives desperate to maintain appearances.
Federal investigators revealed that Bitwise’s founders, Jake Soberal and Irma Olguin Jr., falsified financial documents, inflated revenue figures, and secured investment funds by misrepresenting the company’s actual financial health. According to court documents, the duo repeatedly forged bank statements, exaggerated government contracts, and provided fake income data to mislead lenders. While employees were being laid off without notice, executives continued to court venture capital with cooked numbers and glowing forecasts.
Perhaps the most chilling detail in the courtroom testimony was how methodical the deception was. Soberal and Olguin weren’t flying blind—they had a plan. Internal emails presented as evidence showed the pair actively coaching staff on how to mislead partners while reassuring stakeholders that Bitwise was thriving. The aim wasn’t just to survive—it was to expand the illusion of success long enough to attract a buyout or larger round of funding.
By the time the scam unraveled, dozens of investors were left stunned. Many had poured life savings or public funds into what they believed was a socially driven tech renaissance. City governments that partnered with Bitwise to develop workforce programs are now scrambling to fill the void left behind—programs canceled, buildings abandoned, and communities once promised hope now dealing with broken trust.
Employees, too, were collateral damage. Laid off suddenly without severance or even proper notice, many workers only discovered the true state of the company through news coverage. Several former staffers testified, recalling months of confusion and delayed paychecks masked by internal spin. The company’s internal culture, once portrayed as progressive and transparent, was revealed to be built on fear, secrecy, and illusion.
The guilty verdicts bring a sense of closure to some, but the broader damage remains. Bitwise was more than a business—it was an idea, a mission-driven brand that people wanted to believe in. And for many, that belief came at a high cost. Prosecutors say the founders not only committed financial fraud, but also abused the language of equity and community uplift to further their scheme.
As sentencing looms, the future of Bitwise remains uncertain. The company has filed for bankruptcy, and its assets are being sold off. Civil suits are likely to follow, and the story has sent shockwaves through the tech-for-good ecosystem. Investors, particularly in the social impact space, are now applying a much heavier layer of skepticism to feel-good startups pitching lofty missions.
In the end, what happened at Bitwise is a cautionary tale about how the right narrative can blind even the most diligent backers. The founders didn’t just sell a product—they sold hope. And that, it turns out, may have been the most dangerous scam of all.