A federal judge on Friday sentenced two executives of a now-defunct crypto currency lender to prison for wire fraud.
Daniel Schatt, 55, of San Mateo, and Joseph Podulka, 53, of Palo Alto, each pleaded guilty on May 13 to one count of wire fraud conspiracy in connection with their roles in defrauding customers of Cred, a San Francisco-based firm that provided financial services to holders of cryptocurrency and other assets.
Schatt, who co-founded Cred, served as the CEO and Podulka served as the company’s CFO.
According to the plea agreements, Schatt and Podulka conspired to present an incomplete, unreasonably positive, and thus misleading portrayal of Cred’s business while failing to disclose negative material information about Cred’s business challenges and risks to Cred’s customers.
Senior U.S. District Judge William Alsup sentenced Schatt to four years and four months in prison. Alsup sentenced Podulka to three years in prison.
On Nov. 7, 2020, Cred filed for bankruptcy. Cred customers and investors filed more than 6,000 claims totaling more than $140 million in the Cred bankruptcy proceedings. According to the government’s sentencing memorandum, those claims are worth over $1 billion using August 2025 valuations for the different cryptocurrencies that customers lost.
In addition to the prison terms, Judge Alsup also sentenced Schatt and Podulka each to a three-year period of supervised release and fined each of them $25,000. The defendants will begin serving their sentences on Oct. 28. Judge Alsup set a restitution hearing for Oct. 7.
The case is No. 24-cr-00243-WHA.