Greenwich Entrepreneur Sentenced for $9.3M Fraud in Failed Startup Scandal

Greenwich Man Sentenced in Multi-Million Dollar Startup Fraud

Andrew Adler, a 31-year-old from Greenwich, has been sentenced to 41 months in prison for his role in defrauding investors in the failed California-based startup, Bitwise Industries. Alongside his business partner, David Hardcastle, Adler orchestrated a scheme that resulted in $9.3 million in restitution owed to defrauded investors.

The Scheme Unfolded

Between December 2022 and May 2023, Adler and Hardcastle provided Bitwise with $20 million in "hard money" loans, syndicated from other investors. The duo altered loan documents to hide the true interest rates Bitwise was paying and forged the signature of Bitwise's co-CEO, Jake Soberal, to make the loans appear less risky.

Investors Left in the Dark

Investors were unaware of a $714,000 "secure interest reserve" and that Adler and Hardcastle used part of the funds for a personal investment in another company they controlled. These reserves, meant to protect investors, were instead used for the duo's personal gain, netting them tens of thousands in fees and the potential for millions more in secret profits.

The Fallout

Bitwise's collapse revealed it to be a Ponzi-like scheme, leading to over $115 million in losses. Adler admitted his actions were motivated by "pure greed and nothing else". Meanwhile, Bitwise's CEOs, Soberal and Irma Olguin Jr., have been sentenced to 11 and 9 years in prison, respectively. Hardcastle awaits trial for his involvement.

FBI's Role

FBI Special Agent Sid Patel emphasized the tenacity of the investigation, highlighting the FBI's commitment to uncovering financial fraud and protecting investors from such deceptive practices.