Bitwise founders offered hope, now may face prison. Who are Jake Soberal and Irma Olguin?

Bitwise co-founders Jake Soberal and Irma Olguin Jr. walk out of the Robert E. Coyle Federal Courthouse in Fresno following their first court appearance on Nov. 9, 2023, on criminal allegations of wire fraud.

It was a meteoric rise for Bitwise Industries in Fresno and its founders: an ambitious, charismatic young attorney and an inspirational first-generation college graduate with farmworker roots.

But now, technology entrepreneurs Jake Soberal and Irma Olguin Jr. face federal criminal and civil accusations of fraud related to the sudden financial collapse of their company—the latest in a stunning fall from grace.

The pair surrendered to federal marshals Thursday and made their first court appearance at the U.S. District Courthouse in Fresno. They pleaded not guilty to a single charge of wire fraud.

Jake Soberal

Soberal, 37, is a 2004 graduate of Clovis High School who went on to attend Hofstra University for a year, before transferring to the University of North Carolina at Chapel Hill to complete a bachelor’s degree in history and political science in 2008, according to his LinkedIn profile. After graduating from UNC, Soberal earned a law degree in 2011 from the Western State College of Law in Irvine.

Soberal’s interest in law first appeared to surface in high school, when as a 16-year-old junior he was selected to attend the 2002 National Youth Leadership Forum on Law in Washington, D.C. – one of only 350 students chosen for the forum that year.

At UNC, Soberal was a member and president of the men’s crew or rowing club.

Soberal was admitted to the California State Bar in 2011, and by early 2012 landed a job as an attorney with the Fresno law firm Walter & Wilhelm, where he was hired to focus on business litigation, reorganization and intellectual property law.

According to a 2019 profile of Soberal in CV LUX magazine, the connection between Soberal and Olguin was made in 2012 when he worked as Olguin’s intellectual property attorney.

Irma Olguin Jr.

Olguin, 42, grew up in the farming town of Caruthers, a community tucked among the vineyards and orchards about 15 miles south of Fresno. The daughter of farmworkers, Olguin graduated from Caruthers High School in 1998 and became the first member of her family to attend college when she chose to study computer science and engineering at the University of Toledo in Ohio.

After completing her bachelor’s degree in 2004, Olguin returned to the Fresno area, first teaching at the Center for Advanced Research and Technology (CART) in Clovis before becoming a serial entrepreneur. She co-founded the coding hackathon competition 59 Days of Code, software/web design startup Edit LLC and, perhaps most notably, the collaborative tech workspace Hashtag Fresno, which later became a part of Bitwise Industries.

Olguin and Soberal co-founded Bitwise Industries in 2013, with Soberal as CEO and Olguin as chief technology officer. Olguin was promoted to co-CEO with Soberal in 2016. It was a position in which she became a poster child for the company’s diversity: a self-described “queer Latinx” woman leading a company in the male-dominated technology industry.

Olguin was appointed to Fresno State’s University Advisory Board in 2016 for a three-year term by then-university President Joseph Castro. She was featured by the business publication Forbes on multiple occasions and became a noted speaker on corporate diversity and technology opportunities for underserved communities.

Her profile was elevated even further when Gov. Gavin Newsom appointed Olguin to the California Community Colleges board of governors in 2021 – one of numerous volunteer board appointments at the local and state level.

Offering a potent dream

Bitwise was conceived as what Soberal often described as “the ‘mothership’ of technology education, innovation and collaboration” in downtown Fresno, a potential hub for a blossoming community of tech entrepreneurs and independent software developers and programmers.

The pair offered a compelling dream for Fresno and, later for other communities often described as underserved or lacking in economic opportunities – Oakland, Bakersfield and Merced within California, and in out-of-state cities, Toledo, Ohio; Buffalo, El Paso, Las Cruces, New Mexico; Greeley, Colo.; and South Chicago.

At Bitwise’s zenith, Soberal and Olguin were earning $600,000-per-year salaries as the co-CEOs.

Crashing to earth

According to accusations in investor lawsuits, revelations contained in court records from Bitwise’s federal bankruptcy case, and allegations in the federal criminal case, the ambitious expansion was based on a financial house of cards. Soberal and Olguin found themselves in a constant scramble to raise money and secure loans to repay earlier investors and, in some cases, even to make payroll.

The situation led to “the inevitable collapse of what was an unsustainable Ponzi scheme,” FBI Special Agent in Charge Colby Brackett said Thursday.

The collapse came in May 2023, when, according to various court records, Bitwise simply ran out of cash and Soberal and Olguin abruptly announced that all 900 employees and apprentices nationwide were being furloughed immediately.

Bitwise’s board of directors, who maintain they were blindsided when they learned of the company’s true financial situation, fired Soberal and Olguin in early June, and by the end of the month, Bitwise had filed for bankruptcy in Delaware.

The company’s demise, and accusations of fraud jilted investors and lenders, prompted criminal investigations by the FBI, IRS and the Securities & Exchange Commission. Those investigations culminated in the charges announced Thursday, which allege that Soberal and Olguin bilked investors and lenders – including the company’s own board members, business partners and employees – of more than $100 million.

While investigators believe most of the money was used for payroll and to try to keep the failing company afloat, U.S. Attorney Phillip Talbert said Thursday that “we’re looking at financial assets” of Soberal and Olguin. “Obviously a big part of our criminal case is in taking the profit out of crime, and so we will be looking at all potential assets and other materials for both forfeiture and/or restitution.”

The charges are merely allegations at this point. But if convicted of wire fraud, Soberal and Olguin could each face up to 20 years in federal prison and a fine of up to $250,000.