Who’s on the Bitwise defense team? Is a plea deal in the works? Here’s what we know

Bitwise co-founders Irma Olguin Jr. and Jake Soberal told the FBI that they forged bank statements, misled investors and inflated company revenues as they tried to salvage their startup company. Now, the pair of trendy looking entrepreneurs have hired two high-profile lawyers and pleaded not guilty as they try and save themselves from lengthy prison sentences.

Olguin, 42 and Soberal, 37, say others in the company didn’t know about the scheme that led to the collapse of their firm and the loss of 900 jobs. Federal prosecutors allege the collapse cost investors and others $100 million. The two are charged with one count of conspiring to commit wire fraud, a crime that carries a heavy penalty of up to 20 years in prison.

What will their legal strategy be and could the celebrated entrepreneurs, who have no criminal records, end up as inmates in a federal prison, and for how long?

Despite the claim from Olguin and Soberal that they acted alone, could more Bitwise employees be implicated in the sudden collapse of the company that at one time had operations in 10 cities in seven states?

The Bee spoke with two veteran Fresno trial attorneys to get their take on these questions and what’s next in this biggest fraud case in Fresno’s history, and the latest big tech startup to implode in spectacular fashion.

Nepotism Alleged

Details in the federal complaint hint at where the case may be headed, said Jeff Hammerschmidt, one of the city’s leading defense attorneys who is not part of the case.

He told The Bee that in cases where someone has admitted being responsible for the crime, their lawyers may be laying the groundwork for a plea agreement.

“If you have a case where it is pretty clear the client is guilty then you are better off not wasting the court’s time,” he said. “Some lawyers will get involved pre-indictment to start negotiating a resolution.”

The more cooperative you are in the beginning, the greater your chances of potentially serving a shorter sentence, Hammerschmidt said.

For now, Soberal and Olguin are forbidden from speaking to board members, corporate officers and two specific former employees, the vice president of finance and accounting and the controller. Neither could be reached for comment.

By taking the fall for the company’s demise, Olguin and Soberal are also shielding the inner-circle of upper managers from criminal charges.

The criminal complaint revealed that the co-founders were famous for hiring and promoting people into exorbitant-paying jobs that they were not qualified to do. Nepotism was also rampant at the company, according to the criminal complaint. In one example, an employee, who is related to Olguin, was hired to be head of the company’s real estate team despite lacking work experience in the industry. The employee’s previous job was as a maintenance worker at a community college.

National Law Firms

The Bitwise co-founders chose two highly skilled lawyers from firms with national reputations and outside of Fresno. Hammerschmidt said that makes sense given the complexity of the case and the high probability a local lawyer may have a conflict of interest with a potential witness in the case.

Soberal’s attorney, Eric H. MacMichael is a partner in the San Francisco firm of Keker, Van Nest & Peters. The company’s client list is a who’s who of corporate giants, including Google Inc., T-Mobile USA and Lyft Inc.

MacMichael was recently the lead counsel for Oregon State University in its lawsuit against the Pac-12 Conference over control of the conference. And he was part of the legal team that represented the PGA TOUR in an antitrust lawsuit filed by 11 professional golfers who left and joined the rival LIV Golf.

Olguin’s attorney, Daniel Olmos of Nolan Barton Olmos & Luciano in Palo Alto, is a criminal defense specialist who has defended clients accused of economic espionage, trade secret theft and financial fraud. He graduated from Harvard University and Boalt Hall School of Law at UC Berkeley. He worked in the President Barack Obama administration as senior counsel in the Access to Justice Initiative at the U.S. Department of Justice.

A Fresno native, Olmos is the son of Mario G. Olmos, a highly regarded Fresno County Superior Court judge, who died in 1990, and Mary Louise Frampton, a civil rights attorney and retired professor of law at U.C. Davis.

Neither attorney could be reached for comment.

Who Else Knew?

Ralph Torres, also a top Fresno defense attorney, said judges tend to look favorably on cooperating defendants without criminal records. But that doesn’t mean they’ll walk free, he said.

Torres offered his perspective to The Bee as a longtime Fresno lawyer and is not part of the case.

“This is a very serious charge,” Torres said. “So we aren’t talking about getting six months of road work picking up trash. This could be time in federal prison.”

Although federal investigators have interviewed dozens of people, including board members, investors and corporate officers, the FBI said in its complaint that it’s investigation “has not identified other conspirators.”

Soberal and Olguin have told investigators they are the only ones responsible.

Torres wonders if that will hold true.

“Is it reasonable to believe they (the board and corporate management) did not know what was happening?” he asked. “ And will the feds go after anyone else?”

Hammerschmidt doubts board members were aware the company was about to implode on May 29. He said it’s a misconception that board members are kept up to date on the daily operations of a company.

“Their level of knowledge is not what the public thinks it is,” Hammerschmidt said. “And if they were involved they would have the incentive to throw them under the bus in order to get a better deal themselves. I think they (Irma and Jake) are telling the truth that the board did not know.”

Hammerschmidt doubts the case will ever make it to a jury trial.

“This will be a fairly quick resolution,” he said.

A quick resolution also benefits the U.S Attorney’s office by freeing up its attorney’s to prosecute other fraud cases.

The next court appearance for Soberal and Olguin is December 8 to review their property bond.