Two former CEOs could serve five years in prison for a scheme that sank Bitwise Industries — a once-promising Fresno technology and real estate company.

In a 15-page plea deal posted late Friday — signed by prosecutor Joe Barton — defendants Jake Soberal and Irma Olguin Jr. and the federal government agreed to sentencing recommendations, admitting responsibility, and restitution.

The government will recommend sentencing “to the low end of applicable guideline range,” acceptance of responsibility, and restitution. While the government did not specify how much time it will demand, it did say the defendants are “free to recommend to the Court whatever sentence she/he believes is appropriate … but no less than 60 months in prison.”

Soberal and Olguin are scheduled in Fresno federal court on Wednesday at 8:30 a.m. in front of Judge Dale Drozd. The agreement states Soberal and Olguin will plead guilty to one count of conspiracy to commit wire fraud and one count of wire fraud. The penalty for both charges is 20 years in prison and a $250,000 fine.

The plea deal will avoid a trial and end the criminal nature of Bitwise’s collapse.

$115 Million in Restitution

Soberal and Olguin will be ordered to make restitution of $115 million — the amount the federal government said the pair defrauded investors. It is unclear if they have that money.

The deal requires forfeiture of “any and all assets” subject to federal law. Both defendants have agreed to make a “full and complete disclosure” of assets and finances.

The plea deal is contingent on both suspects following through with the agreement. If either changes their plea, the government could rescind the offer. Both agreed not to appeal the agreement under most conditions.

The plea agreement does not specifically cover what fine, if any, will be assessed. The pair will also be charged a $200 special court assessment.

Court Documents: $115 Million Fraud Scheme

Soberal and Olguin are accused of defrauding investors and falsifying documents in a bid to save their company.

A court filing earlier this month updating the charges said “the defendants agreed to alter and fabricate financial information for Bitwise that was presented to Bitwise’s investors and lenders to deceive and cheat them into making investments and loans to the company.”

The result: Bitwise received nearly $115 million in investments and loans between January 2022 and May 2023.

The wire fraud charge, the federal government alleged, was specific to an $18 million wire transfer from an unspecified New York financial institution.

In the plea agreement documents, the federal government said Soberal and Olguin defrauded at least 10 different investors.

“All of the money that Bitwise received through Soberal and Olguin, Jr.’s misconduct went toward paying the company’s payroll, outfitting office spaces, repaying debts owed to prior investors and lenders, and expenses incurred in the company’s ordinary course of business,” the government said.

In several court documents, the government detailed how Soberal and Olguin would allegedly alter bank records to show investors and its own board of directors inflated financial figures, to the point it tricked even the most “sophisticated individual and financial institutions.”

Founded in 2013; Failed in 2023

Soberal and Olguin founded the company in 2013, with a goal of turning underdog cities like Fresno into tech powerhouses. They invested in ailing real estate, renovating downtown buildings. Bitwise also taught coding and provided technical support to clients.

GV Wire first revealed problems with the company’s finances in May 2023 when they missed property tax payments and had payroll issues. On Memorial Day last year, the company furloughed all its employees, laying them off weeks later.

Bitwise’s board of directors fired Soberal and Olguin in June 2023, saying the CEOs misled them about the financial health of Bitwise. Later that month, the company filed for bankruptcy.

The company faces several civil lawsuits from investors, former employees, and business partners.

One allegation in multiple lawsuits accused Soberal of offering up the company’s real estate holdings as collateral, when Bitwise did not own the buildings or had already pledged them to another investor/business partner.

Read the Plea Deals