A Fresno hard money lender pleaded guilty on Monday to conspiracy to commit wire fraud in connection to the collapse of Bitwise.
U.S. Attorney Eric Grant announced that David Hardcastle, 61, pleaded guilty in two separate cases that resulted in a combined loss of around $45 million.
Driving the news: While Bitwise co-founders Jake Soberal and Irma Olguin Jr. were running their own Ponzi scheme with their failed tech and real estate company, Hardcastle and business partner Andrew Adler, of Connecticut, committed fraud of their own against Bitwise.
- From December 2022 through May 2023, when Bitwise collapsed, Hardcastle and Adler loaned around $20 million in high-interest hard money loans to Bitwise through their special purpose entity Startop Investments LLC.
- They split the loans up and sold them to other investors and altered the original loan documents to make it look as if Bitwise was obligated to pay significantly less interest on the loans than in actuality. They also forged Soberal’s signature on the falsified documents.
- Hardcastle and Adler made tens of thousands of dollars in origination fees for the loans and would have made millions of dollars in secret profits from the undisclosed interest rates had the loans been fully repaid. But their scheme was not successful since Soberal and Olguin Jr. were running their own fraudulent scheme with Bitwise and defrauded investors of around $115 million.
Go deeper: Along with the Bitwise case, Hardcastle was also a general partner and chief executive officer at Voyager Pacific Capital Management, which is a real estate investment firm based in Florida.
- From June 2020 to January 2025, Hardcastle and others falsely represented to investors that their money would be used to acquire residences, land and tax liens, as well as other assets. But they actually used the money to pay promised returns to other participants, personal investments and other improper purchases. They provided fake financial information claiming that the investment fund was doing well when it was not.
- Hardcastle and others at Voyager sold certain properties in the investment fund that were in disrepair or underperforming to themselves and did not disclose the sales to participants, with the sales being on paper only. The sales allowed them to artificially inflate the value of the fund to continue receiving their management fees and other compensation from Voyager.
What we’re watching: Hardcastle is scheduled to be sentenced by U.S. District Judge Jennifer Thurston on Sep. 14.
- He faces up to 20 years in prison and a $250,000 fine for the conspiracy to commit wire fraud charge.
The post Fresno man pleads guilty to fraud in connection to Bitwise appeared first on The San Joaquin Valley Sun.
