Centra Tech Co-Founder Sentenced One-Year in Prison Over $25 Million ICO Scam

Robert Farkas, 34, the co-founder of the cryptocurrency firm Centra Tech was sentenced to a year in prison on Tuesday by US District Judge Lorna G. Schofield in Manhattan.

Farkas pleaded guilty to tricking investors of over $25 million in an investment scam that was promoted by the likes of Floyd Mayweather and musician DJ Khaled, who settled their own charges with the SEC for failing to disclose that they had been paid to promote the project.

The other two co-founders have also pleaded guilty to their roles in the scam.

The guilty parties solicited investors in 2018 to commit frauds to an initial coin offering (ICO) for its “Centra Tokens” by falsely claiming that they have developed a debit card that will allow the users to make purchases with digital currency at businesses accepting Mastercard and Visa, said prosecutors.

In other news, the Public Prosecutor’s Office of the Argentine city of Córdoba indicted 12 people in connection with the Onecoin Ponzi scheme last week.

One of the biggest scams in crypto history, this Bulgaria-based project netted about $4 billion.

The local police carried out multiple raids and arrested eight people over the years in different countries. Onecoin founder Ruja Ignatova, who was also indicated, is still at large.

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Author: AnTy

Centra Tech Co-Founder Duped Investors for $25M via DJ Khaled & Floyd Mayweather Promoted ICO

Co-founder of the cryptocurrency firm Centra Tech admitted to conspiring to dupe investors into investing $25 million into the company by lying about an initial coin offering (ICO), the Justice Department said.

Robert Farkas, 33, and two other founders of Central Tech Inc., Sohrab Sharma, and Raymond Trapani were charged in 2018 with misleading investors by claiming to have developed a debit card, the “Centra Card,” that supposedly allowed users to make purchases using cryptocurrency at any business accepting Visa and Mastercard.

Before founding Centra Tech, the trio worked at a luxury car rental company in Florida called Miami Exotics, according to prosecutors.

They got celebrities including boxer Floyd Mayweather and music producer DJ Khaled to promote their ICO, who later settled with the U.S. Securities and Exchange Commission but didn’t admit or deny guilt in the settlement.

From July 30, 2017, through October 5, 2017, Farkas and other co-founders solicited investors to purchase unregistered securities in the form of digital tokens “CTR Tokens” issued by Centra Tech through an ICO.

The claims made by Farkas at that time were false including the purported Harvard-educated chief executive officer “Michael Edwards” who was a fictional person fabricated to dupe investors. Cetra Tech also didn’t have any partnership with Bancorp, Visa, or Mastercard and they neither have any money transmitter and other licenses in 38 states as claimed.

Farkas pleaded guilty on Tuesday in federal court in Manhattan of securities fraud conspiracy and wire fraud conspiracy, appearing by phone before the US Magistrate Judge James Cott.

He faces as much as a decade in prison but prosecutors agreed to seek a sentence of 70 to 87 months and a fine of as much as $250,000 under a plea agreement. Sharma and Trapani will go to trial in November.

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Author: AnTy