A Connecticut man was sentenced Monday to more than three years in federal prison for defrauding investors in loans tied to the failed Fresno-based tech startup Bitwise Industries, officials said.

Andrew Adler, 31, of Greenwich, was sentenced to three years and five months by U.S. District Judge Jennifer L. Thurston and ordered to pay $9.3 million in restitution, shared with former Bitwise executives, and forfeit an additional $1 million, according to Acting U.S. Attorney Michele Beckwith.

Adler and his business partner, David Hardcastle of Fresno, issued about $20 million in hard money loans to Bitwise between December 2022 and May 2023, but instead of using their own funds, they solicited money from outside investors, federal prosecutors said.

Prosecutors Say Adler, Hardcastle Altered Loan Documents

To make the deals appear safer and more attractive, Adler and Hardcastle altered loan documents and forged the signature of Bitwise Co-CEO Jake Soberal to conceal higher interest rates Bitwise had agreed to pay. Prosecutors said several investors told the FBI they would not have contributed money had they known the actual terms.

One loan included a $714,000 interest reserve that Adler and Hardcastle allegedly used to invest in an unrelated company they controlled, instead of disclosing it to investors as required.

“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.”

Prosecutors said Adler admitted to the court that greed motivated his actions. He and Hardcastle also collected tens of thousands of dollars in fees and stood to make millions more in undisclosed profits if the loans had been repaid — before Bitwise collapsed in what authorities have called a Ponzi-like scheme.

Bitwise’s former co-CEOs, Soberal and Irma Olguin Jr., were previously sentenced to 11 years and nine years in prison, respectively, for their roles in the $115 million fraud.

Hardcastle has been indicted and is awaiting trial.