Source: Office of United States Attorneys
FRESNO, Calif. — A federal grand jury returned a six-count indictment on Jan. 30, 2025, that charged David Hardcastle, 61, of Fresno, with conspiracy to commit wire fraud and substantive wire fraud for defrauding investors in loans made to the failed Fresno-based startup company Bitwise Industries, Acting U.S. Attorney Michele Beckwith announced today.
The indictment was unsealed after Hardcastle’s arrest this morning, and he is scheduled to make his initial appearance in court this afternoon. Andrew Adler, 31, of Greenwich, Connecticut, has been charged by information and entered into a plea agreement with the government where he has agreed to plead guilty to conspiracy to commit wire fraud. Adler is scheduled to enter his guilty plea in court next month.
According to court documents, from December 2022 through May 2023, Hardcastle and his business partner Adler gave Bitwise approximately $20 million in hard money loans through their special purpose entity Startop Investments LLC. They syndicated the loans to other investors. In doing so, they altered the original loan documents to make it appear that Bitwise was obligated to pay significantly less interest on the loans than was true. They also forged the signature of Bitwise’s Co-CEO, Jake Soberal, on the altered documents. This made the loans appear less risky and therefore more appealing to the investors.
Hardcastle and Adler received tens of thousands of dollars in origination fees for the loans and stood to make millions more in secret profits from the higher, undisclosed interest rates had the loans been fully repaid. Moreover, one of the loans to Bitwise included a secure interest reserve of approximately $700,000. The investors were unaware of this reserve. Hardcastle and Adler then used these reserve funds to make an unrelated investment in another company that they operated without the investors’ authorization, and the money was not available to repay the investors when Bitwise collapsed in May 2023. Generally speaking, secure interest reserves are disclosed to loan investors and are supposed to help protect the investors in the event the borrower does not repay the loan on schedule.
Bitwise did not repay the loans before collapsing. As a result, the investors in the loans lost nearly all of their money.
This case is the product of an investigation by the Federal Bureau of Investigation. Assistant U.S. Attorneys Joseph Barton, Henry Carbajal III, and Cody Chapple are prosecuting the case.
If convicted, Hardcastle and Adler each face maximum statutory penalties of 20 years in prison and a $250,000 fine for the conspiracy to commit wire fraud charge. Hardcastle also faces another 20 years in prison and a $250,000 fine for each of the substantive wire fraud charges. Any sentence, however, would be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables. The charges are only allegations; the defendants are presumed innocent until and unless proven guilty beyond a reasonable doubt.