
In 2013, a pair of entrepreneurs in central California launched Bitwise Industries, an incubator for technology startups with three goals in mind.
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Narrator
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Tim Sheehan
In 2013, a pair of entrepreneurs in Central California launched an incubator for technology startups with three go in mind to provide opportunities for young intellectual talent to slow the brain drain from the region and to raise the bar for diversity, equity and inclusion that we're lacking elsewhere in the tech community.
Roger Bonachter
What is Bitwise? We're glad you asked. Bitwise is a tech ecosystem that activates human potential to lift up underdog cities around the country.
Irma Olguin Jr.
We have a lot of underserved and overlooked talent in the heart of the state, and we have been able to prove folks coming from that story are just as likely to succeed in the technology industry and help us rebuild this economy as anyone else.
Tim Sheehan
And not only have we gotten to.
Jake Soberall
Do really extraordinary work here in Fresno, but we've gotten to see that work expand to places like Bakersfield, Merced, Oakland and Toledo.
Tim Sheehan
Hundreds of employees are now without jobs.
Damon Thomas
And wondering what's next. That's after the tech incubator Bitwise Industries.
Tim Sheehan
Announced it is furloughing its entire workforce. Today, my office is announcing the filing of federal criminal charges alleging that Ms.
Kurlyn Phipps
Alguin Jr. And Mr. Soberall, starting at.
Tim Sheehan
The latest in January 2022, conspired to commit wire fraud.
Bob Rodriguez
No?
Narrator
Sorry?
Kurlyn Phipps
Nothing.
Tim Sheehan
Your family?
Bob Rodriguez
Jake Soborough, an ambitious young attorney and software engineer, Irma Olguin Jr. Believed that technology startups could diversify the region's business landscape and that training would be tech workers could feed the local industry.
Tim Sheehan
The Fresno Bee reached out to both Jake Soberall and Irma Olguin, asking if they'd be willing to be interviewed for this podcast. Neither of them responded. Here's Jake Soberall from a 2019 interview with the Fresno Bee.
Jake Soberall
Bitwise Industries is a technology ecosystem that is designed to make it possible for cities like Fresno and Bakersfield Field to participate in the opportunity that exists in the technology industry. And what that looks like is providing a ramp into the industry for the people in that city.
Tim Sheehan
Here's Irma ogwin from a 2016 interview with the Fresno Bee.
Irma Olguin Jr.
I think when you grow up the way that I did, you see your life as a specific way. And college is often for folks like myself and many of my peers, not a part of the plan. So when you find yourself in a position where that might be a possibility, you have to adjust yourself to a new way of thinking. How do you choose a major? What does it look like to not live at home?
Tim Sheehan
What was the lure of Bitwise for the Fresno region? Fresno is not surrounded by a broader metropolitan area. Rather, it is the de facto capital of the central San Joaquin Valley, a rich agricultural region of vineyards, fruit and nut orchards, vegetable crops, dairies and pastures. The economy of the region is dominated by farming and much of the employment is in notoriously low wage industries. Farm labor, hospitality and food service and retail. The rates of poverty and unemployment are higher than California as a whole, and median pay and educational attainment are lower than the state average. Fitwise Industries captured the imagination of the Fresno community with its audacious plans and aggressively promoted their dream of a mothership of technology, education, collaboration and innovation to city leaders and whoever else would listen, including development partners, investors, lenders and their own employees. But 10 years later, after expanding to other cities in California and across the US The Bitwise dream collapsed amid a financial implosion that abruptly left hundreds of people out of work, cost investors tens of millions of dollars, and ultimately led to convictions on federal charges for sober all and olguin.
Bob Rodriguez
I'm Bob Rodriguez.
Tim Sheehan
And I'm Tim Sheehan and this is the story of Bitwise and betrayal inside the fraud scandal that shook Fresno. For two years, Bitwise Industries and its cadre of upstart technology tenants as well as its Geekwise Academy training classes were shoehorned into a nondescript building at the northern fringe of downtown Fresno. More space was desperately needed. And that's how local developer Will Dyck comes into the picture. Bitwise needed a development partner to rehabilitate a historic downtown building. Dyke had already worked to renovate old downtown Fresno warehouses into office space for government agencies and other clients. For Dyke, the partnership with Bitwise was pretty much just another real estate deal.
Damon Thomas
I first met Jake Soberall through an introduction through a structural engineer. Brooks Ransom is a well known engineering firm here in town. The Bitwise group in their infancy had purchased a building at 700 Van Ness and gotten a little bit over the skis. And like any good technologist, they googled what a tenant improvement was and it said $40 a square foot in 90 days and then got into the reality of what they had gotten themselves into as far as a 1918 50,000 foot three story, unreinforced historical complete rehab building. And so they needed a partner. The structural engineer introduced us. I kind of got the idea of what Bitwise was trying to do as far as the real estate went and said, okay, this is just like the buildings that we've done and said, okay, you know, we could explore joint venture and do something together. And we ultimately delivered that building about three years later and about six and a half million dollars later.
Tim Sheehan
Jake Soberall went to high school in Clovis, a Fresno suburb, and earned a bachelor's degree in history and political science from the University of North Carolina at Chapel Hill. After graduating from UNC in 2008, Sobarol went to law school, earning a law degree in 2011 from the Western State College of Law in Southern California. By early 2012, he landed a job with a Fresno law firm focusing on business litigation and intellectual property.
Bob Rodriguez
Soberal and Olgin first connected in 2012 as he did some legal work on intellectual property for Olgin. A year later, they joined forces to establish bitwise Industries, with Shift3 Technologies as its software development arm and Geekwise Academy as its education and training branch.
Tim Sheehan
Here's Irma ogwen from a 2021 interview with CNBC.
Irma Olguin Jr.
90% or more of the folks who come through our programs stay in their hometowns. And that's important because those are dollars that are being spent in their local community and tax base. Those are homes that are being bought, those are cars that are being driven in those underestimated cities rather than building and exporting talent to other primary markets. That's not really the goal here. And so when we build these aspirational places, places that are exciting to be in for entrepreneurs and for technologists, it causes people to imagine the best version of their lives being lived out there. It also creates community around leveling up entry level talent.
Bob Rodriguez
Valley native Jen Garab had been living in the Bay Area for more than 20 years, running a massage therapy business. But she was looking for a change and a new opportunity. She was also missing her family in Kingsburg, so she decided to move back home. She was happy with her new life until COVID 19, happened and she was forced to pivot her career, leading her to Bitwise.
Narrator
When I first moved back here, I was driving down Van Ness and I saw this building that we're in and I thought, what is this? This reminds me of San Francisco because I was out there working on all the tech companies. I remember coming downstairs and talking to one of the front desk people about what's going on Here. And she said, it's a tech company. And like, oh, wow. She's like, oh, yeah, we do classes and this and that. So I thought it just implanted something in my brain. And then I started coming to Bitwise events. Like, they would host art hop, they would have concerts. So I would just show up and I met a lot of nice people. I had an app idea for my business, my massage business, and I called up Bitwise. You know, we were kind of in the talks and then all of a sudden the COVID thing, like, happened in March, and then I realized, oh my goodness, I can't do massage anymore. So that really freaked me out. And I've been doing that for 20 years, you know. So then I just. First thing, I thought it was bitwise. Would you hire a displaced massage therapist? I don't really have tech experience, but I'm willing to learn and all this stuff. He's like, well, give me a week and I'll let you know. So then a week came by and he said, yeah, here's Irma's post. She's hiring 100 people. Go there and just apply. So I did, I applied, I begged for a job. You know, I was like, really scared. You know, I'm also help my parents. Yeah, sure enough, I was hired.
Bob Rodriguez
While training and hiring people like Jengara for technology jobs was a big piece of the Bitwise vision, another component was developing space and infrastructure for tech startups and entrepreneurs. It needed to attract tenants to its building, and one of the earliest of those was a company called QuickLabs.
Tim Sheehan
QuickLabs was founded in 2013 by Damon Thomas and Kurlyn Phipps, building on their previous experience in web development, multimedia and graphic design since 2006. They initially focused on creating mobile websites and QR code solutions, which were innovative at the time, helping businesses reach mobile users more effectively. Their connection with Bitwise began through their participation in something called the 59 days of code, a competition co founded by Irma Oldwin.
Kurlyn Phipps
59 Days of Code was a competition that allowed lots of web developers and creative people who write code to start coming up with ideas. And 59 days, we heard about this competition and we decided to join this competition. And that was our first meeting and experience with Irma, who was one of the founders of Bitwise at that point, because she was also one of the founders of 59 Days Code as well.
Tim Sheehan
Irma Olgwin Jr. Grew up in the farming town of Carruthers, tucked among grape vineyards and fruit orchards about 15 miles south of Fresno Olgun. Often cites her family's farm labor roots as she tells of becoming the first person from her family to attend college. She earned a degree in computer science and engineering from the University of Toledo in Ohio. After college, Olgun returned to the Fresno area and began teaching at a local technology high school. She also became a serial entrepreneur, starting several enterprises, including Fresno, a collaborative tech workspace, and a coding hackathon competition called 59 Days of Code.
Kurlyn Phipps
At first, they wanted us to be tenants, especially hot off of the winning 59 days of code as quick labs. We didn't want to. At first, it didn't make sense to us to share our intellectual property or have these ideas and things we're working on and to actually be around other developers seemed like. It just seemed awkward and odd. So we said no in the beginning. We said no in the beginning. And I think eventually Jake kind of pressed a few times, you know, just like, we'd love to have you guys in here. You guys are cool. We talked about it and we're like, okay, we'll give it a try.
Bob Rodriguez
While the COVID 19 pandemic wreaked havoc on hundreds of local businesses in early 2020, Bitwise also closed its buildings, but kept its staff working remotely. The company also landed a contract with the state of California for the Onward California project, a website that served as one stop clearinghouse of resources for people who lost their jobs to the pandemic. Jen Guerra was part of a large virtual team that worked on Onward California and later Onward projects for several other states across the country. Garra describes the work as gratifying, giving her a sense of purpose. During the pandemic March of 2020, I.
Narrator
Was in this project called Onward California. It was a website that supposedly offered resources for people the out of jobs, like job leads, maybe where to find money, where to find health care, you know, all these things. So I was put in the virtual call center. And so there I was talking to people all over the country. I mean, mostly New York, because I think New York was really hit bad during that time. And just honestly, I felt like I was just like a therapist. You know, I'm not a therapist, but, you know, just trying to help people. And so, yeah, it felt very gratifying to be on that project because I felt like I was doing something. I was scared during that time, and we all were. That made me feel like I'm doing something about it. I'm being productive, I'm making money. You know, I could support myself and my family and, you know, I could do something. Like, positive. And I'm. And I was in this team with, like, all of a sudden, like, 900 people, like, on the Slack channel, on. You know, and it felt really cool, like, to. To be part of that. And that is a really good memory for me during that time. If someone said, what were you doing during COVID Well, I was doing that, and that was awesome.
Bob Rodriguez
Did you sometimes think it was too good to be true?
Narrator
Yes. I always wondered, how are they making money? Like, during COVID I mean, honestly, everybody's, like, going out of business and they're thriving. And I. And I do remember they had a program where they would run around and give people groceries for free. That was amazing. You know, I just felt like they were superheroes.
Tim Sheehan
Jengara's perceptions align with the overall atmosphere that Soberal and Olgwin sought to develop at Bitwise from its earliest days. A Silicon Valley vibe and an ecosystem in which tech entrepreneurs could unite in common interests. This is Jake from a video for BITWISE Industries on YouTube.
Jake Soberall
Raising up of talent has catalyzed 200 technology companies in downtown Fresno. They've created 2,000 new technology jobs. We're trying to accelerate the growth of the technology industry in a way that lifts our city. And what is really, really important to us is that their demographics match the demographics of our county. So greater than 50% female, greater than 50% minority, and about 20% first generation.
Tim Sheehan
The quick Labs team, Damon Thomas and Kurlyn Phipps were in the software business even before Bitwise was founded in 2013. But after the pair won the 59 days of code competition, they were recruited to move into the original cramped Bitwise building in Fresno's Mural District. Thomas and Phipps were initially hesitant to move into a shared space with other developers over concerns about their intellectual property. But eventually they were convinced to lease space in that first building. Over time, they appreciated the community of developers sharing ideas and best practices, which helped create a supportive environment.
Kurlyn Phipps
I think they created a lot of buzz and it attracted a lot of people. And I think people. I think the community formed very naturally. People felt like they belonged and they were a part of it. I mean, there was, like, the development part and then there was the whole education part. And so I think the intent of all of that stuff was all very good. It was very welcoming. You're with a whole bunch of developers. Oh, you guys speak the same language, you do the same stuff, and you act the same way. So that was beautiful. Felt like even though it was just the two of us in our business, in the beginning you're part of a bigger organization or company because you would all see each other in the halls and eat together, eat together in common spaces. You're testing out and prototyping things and getting other people's opinions. So people come into our office to, you know, just to kind of hang out and. Yeah, PlayStation and whatever also. So we had a fun space inside of their space as well. And it allowed us to host our own events in that space as well. And then the community comes to support that. So in the beginning that was unintended, but really it made the environment really fun to be around with all of the other companies that were in there. And then 59 days of code was still a thing. Yeah, so I was on the board of 59 days of code so the relationship continue to stay established. It was really, really, it was really fun in the beginning. Smaller space and we're all connected. It was just really good.
Tim Sheehan
We started in our hometown. The idea was to use tech to fix Fresno. It felt natural. Teach our neighbors to code, surround them with good places to work and put all of it inside of a building everyone could be proud of. It feels like Bitwise could really matter in Fresno and in Bakersfield and in Merced. It feels like we can do something important, something that allows all of us to enjoy the best versions of our hometowns.
Damon Thomas
Hundreds of employees are now without jobs and wondering what's next. That's after the tech incubator Bitwise Industries.
Tim Sheehan
Announced it is furloughing its entire workforce.
Bob Rodriguez
Roger Bonachter has represented a number of different clients. Although he had limited business dealings with Bitwise, Bonakter didn't hesitate to represent the laid off workers. After hearing their stories of losing their jobs overnight, Bonakhter filed a class action lawsuit on behalf of 100 furloughed workers.
Roger Bonachter
I knew about as much about Bitwise as the community did. It seemed to be an enigma wrapped in a riddle. On the one hand they were a tech company. On the other hand they seemed to be some sort of real estate startup. Had represented various folks that had worked for or with Bitwise over the years during from the point of their inception to their collapse.
Bob Rodriguez
What did you think of them?
Roger Bonachter
To me it didn't really make any sense how they operated. I didn't understand how they made money. I didn't understand how they grew, particularly at such a rate. I mean, I liked the idea that I saw investment in downtown. I liked some of the accolades that were coming along with them being here. But I didn't know much. And as it turns out, it seems like neither did they.
Tim Sheehan
Bitwise Industries continued to raise its profile in Fresno and central California. Beneath the surface, however, not all was as rosy as Bitwise leaders portrayed to the public and to its investors. The company went through several chief financial officers, and in the fall of 2020, the company received a notice of delinquency on personal property taxes. Apprentices purportedly brought on to learn technology were funneled into other functions, and for some, promised jobs never materialized.
Bob Rodriguez
Even some Bitwise employees, among the most fervent believers in the company's social mission of diversity and technology, started to take notice.
Narrator
I think it was during my apprenticeship I was in the onward project that died down and I started taking classes. It's called Meet Wise. So I took coding classes. I had to learn something. I had to pivot from massage, right? So I was doing that. And then in the class, I was asked to be in an apprenticeship. So I thought, okay. And they said, it's a paid apprenticeship and they put me in inside sales. That apprenticeship was only supposed to be for six months, but then it extended to a year and then a year and a half. And I was kind of like, when is this ever going to end? Because we were told that we were all going to be hired after we finish and I did get a job. I did get hired and. But many people didn't and, and it was promised to us all that all of us were going to be hired. And. But logically I'm thinking, how is that possible? Did they really have. At that point, I think there was like 300, 400 apprentices, but they didn't hire all of them. They barely hired, not that many. I got a hundred thousand dollar sale during that time. And so I think because of that I was hired.
Bob Rodriguez
What were you selling?
Narrator
I was trying to sell tech consulting and to ad companies.
Bob Rodriguez
And what, what were they consulting on?
Narrator
Anything. Like, I mean, they were basically saying we can build, you know, like apps, basically agricultural. I mean, like, anything like that. We were told like, basically they could build anything. So we're like, okay, we can, we can make you anything. So. And you know, I mean, for the most part, I think they did build stuff, but you know, obviously when it shut down, a lot of those projects were his left.
Bob Rodriguez
Here's attorney Roger Bonachter.
Roger Bonachter
Again, as I've learned over the course of the year plus we've been fighting this case year, year and a half, there was a deliberate and calculated effort to build almost a cult like environment at Bitwise. The things that I would hear from these employees about their interactions with department leads and the existence of an evangelist, a bit wise evangelist on the premises.
Bob Rodriguez
That was literally the title.
Roger Bonachter
That was, in fact, the title evangelist was just to be polite, baffling. I mean, it seems that they wanted a sense of religiosity, a sense of being a part of some grandiose movement. They wanted a wholehearted investment from their employees, which in some ways is admirable. Right. I mean, I should hope that everyone who works at my office is wholeheartedly engaged in what we do and for all of my clients. But this was different. This. This was quite different. Something I've never experienced representing employees or employers in my career.
Tim Sheehan
Next on Bitwise and Betrayal inside the fraud Scandal that Shook Fresno.
Narrator
Some of these people that were their friends and family weren't even here, and they were on payroll. And so to me, what is that? That's like. What is it called? Like nepotism? Yeah.
Damon Thomas
The business model did not seem like something that was sustainable, and there was a big divide in the board at the time. Bitwise was going down a path of putting the social enterprise in the forefront and the business enterprise in the backseat.
Kurlyn Phipps
The building is empty and no one's there. This whole cups of coffee were still. Phones are still charging. Things are still here. Like people are supposed to come back.
Tim Sheehan
I'm Tim Sheehan.
Bob Rodriguez
And I'm Bob Rodriguez.
Tim Sheehan
Bitwise and Inside the Fraud Scandal that Shook Fresno is a product of the Fresno Bee, a McClatchy publication based on original reporting by Tim Sheehan and Bob Rodriguez. It's produced by Lume Alasali, Bob Rodriguez, Tim Sheehan, Eric Zamora and Craig Colress, executive producers Jennifer Molina and Don Blount. The podcast was edited by Jen Molina and Lume Alisali. Original music by Eve Guiguess. Bitwise and Betrayal Inside the Fraud Scandal that Shook Fresno can be found on Apple Podcast, Spotify, YouTube Music, or wherever you get your podcasts.
In December 2024, Tim Sheehan and Robert Rodriguez unveil the first episode of their podcast series, "Bitwise & Betrayal: Inside the Fraud Scandal that Shook Fresno." Titled "Bitwise's Best Intentions, Highest Hopes," the episode delves into the rise and dramatic fall of Bitwise Industries, a tech incubator that promised to transform Fresno's economic landscape.
Bitwise Industries was founded in 2013 by Jake Soberall and Irma Olguin Jr., two Central California entrepreneurs with a mission to cultivate a thriving technology community in Fresno. Their goals were twofold: to retain local intellectual talent and to enhance diversity, equity, and inclusion within the tech sector.
Jake Soberall (00:25): "Bitwise is a tech ecosystem that activates human potential to lift up underdog cities around the country."
Irma Olguin Jr. (00:55): "We have a lot of underserved and overlooked talent in the heart of the state... [Bitwise] help us rebuild this economy as anyone else."
Jake, a Clovis high school graduate with degrees in history, political science, and law, partnered with Irma, who hailed from a farming town and became the first in her family to attend college. Together, they envisioned Bitwise as a catalyst for economic and social change in Fresno and beyond.
Bitwise quickly became a beacon of hope in Fresno, a region dominated by low-wage industries like agriculture and hospitality. The company aimed to diversify the local economy by providing technology training and fostering startups. Over the years, Bitwise expanded its reach to cities like Bakersfield, Merced, Oakland, and Toledo, creating hundreds of jobs and nurturing over 200 technology companies.
Jake Soberall (02:21): "Bitwise Industries is a technology ecosystem designed to make it possible for cities like Fresno and Bakersfield Field to participate in the opportunity that exists in the technology industry."
Irma Olguin Jr. (07:19): "90% or more of the folks who come through our programs stay in their hometowns... [This] injects dollars into the local community and tax base."
The founders emphasized that their initiatives would keep talent within Fresno, fostering economic growth and community development. Jen Garab’s story exemplifies Bitwise’s impact, illustrating how the company provided opportunities for individuals to pivot careers and contribute meaningfully to their hometown.
Bitwise's strategy included not only training individuals through Geekwise Academy but also developing infrastructure for tech startups. The partnership with local developer Will Dyck to rehabilitate historic buildings in downtown Fresno was a significant move to create a Silicon Valley-like environment in the region.
Damon Thomas (05:21): "The Bitwise group in their infancy had purchased a building at 700 Van Ness... we ultimately delivered that building about three years later and about six and a half million dollars later."
Bitwise fostered a collaborative environment where tech entrepreneurs could share ideas and best practices. Kurlyn Phipps highlighted the community’s natural formation and the supportive atmosphere that Bitwise cultivated.
Kurlyn Phipps (16:30): "People felt like they belonged and they were a part of it... It was really beautiful to be around all of the other companies that were in there."
Despite its outward success, Bitwise began showing signs of internal turmoil. The company went through multiple chief financial officers and faced financial difficulties, including a delinquency notice on personal property taxes in fall 2020. Promised job placements for apprentices failed to materialize, raising suspicions among employees.
In January 2022, Bitwise made headlines by announcing the furlough of its entire workforce, affecting hundreds of employees and leaving investors and lenders owed tens of millions of dollars. Following this abrupt collapse, federal criminal charges were filed against the founders.
Tim Sheehan (01:26): "Today, my office is announcing the filing of federal criminal charges alleging that Ms. Kurlyn Phipps and Mr. Soberall... conspired to commit wire fraud."
The fallout from Bitwise’s collapse was profound. Employees like Jengara Guerra shared experiences of being promised employment that never materialized, despite Bitwise's public image of thriving success.
Jengara Guerra (14:42): "I always wondered, how are they making money? Like, during COVID I mean, honestly, everybody's, like, going out of business and they're thriving."
Attorney Roger Bonachter filed a class action lawsuit on behalf of 100 furloughed workers, highlighting the enigmatic and unsustainable business operations of Bitwise.
Roger Bonachter (23:18): "It seems that they wanted a sense of religiosity, a sense of being a part of some grandiose movement... something I've never experienced representing employees or employers in my career."
Bonachter criticized the company for creating a cult-like environment, where employees were expected to be wholly invested in Bitwise’s mission without transparency or accountability.
The episode paints a comprehensive picture of Bitwise Industries’ ambitious beginnings, its significant impact on Fresno’s tech landscape, and the eventual unraveling that led to financial collapse and legal consequences for its founders. Through interviews, firsthand accounts, and investigative reporting, "Bitwise & Betrayal" sheds light on the complexities and challenges of fostering a tech ecosystem in an underserved region, ultimately serving as a cautionary tale about ambition, accountability, and the fine line between visionary leadership and fraudulent practices.
Jake Soberall (02:21): "Bitwise Industries is a technology ecosystem designed to make it possible for cities like Fresno and Bakersfield Field to participate in the opportunity that exists in the technology industry."
Irma Olguin Jr. (07:19): "90% or more of the folks who come through our programs stay in their hometowns... [This] injects dollars into the local community and tax base."
Kurlyn Phipps (16:30): "People felt like they belonged and they were a part of it... It was really beautiful to be around all of the other companies that were in there."
Roger Bonachter (23:18): "It seems that they wanted a sense of religiosity, a sense of being a part of some grandiose movement... something I've never experienced representing employees or employers in my career."
For anyone interested in the intersection of technology, community development, and business ethics, "Bitwise & Betrayal: Inside the Fraud Scandal that Shook Fresno" offers an in-depth exploration of how good intentions can sometimes lead to unforeseen consequences. The first episode sets the stage for a gripping narrative that promises to uncover the layers of ambition, betrayal, and the quest for success within Bitwise Industries.