Court documents show David Hardcastle and business partner Andrew Adler loaned Bitwise Industries approximately $20 million in high-interest hard money loans through their special purpose entity, "Startop Investments LLC."
Investigators say Hardcastle and Adler altered the original loan documents, then split them up and sold them to other investors.
Authorities believe this made it appear that Bitwise was obligated to pay significantly less interest on the loans than was true.
Adler pleaded guilty last year, and was sentenced to three years and five months in prison.
Hardcastle is scheduled to be sentenced September 14 of this year.
He faces a maximum statutory penalty of 20 years in prison.