- Centra Tech co-founder Robert Farkas has been sentenced to a year and a day in prison for his part in fraudulently soliciting $25 million in the 2017 ICO
- Centra Tech claimed to be a crypto finance company but was simply a vehicle to enrich its operators
- DJ Khaled and Floyd Mayweather famously promoted the ICO in 2017
The co-founder of Centra Tech, the cryptocurrency ICO that defrauded investors to the tune of $25 million, has been sentenced to over a year in prison by a New York court. Robert Farkas, the mastermind of the fraudulent 2017 ICO that solicited celebrity endorsement from DJ Khaled and Floyd Mayweather, will spend a year and a day behind bars having pled guilty to conspiring to commit securities fraud and wire fraud in June.
“Fictitious Executives And Fabricated Business Relationships”
Farkas, along with co-founders Sohrab Sharma and Raymond Trapani, raised $25 million during the 2017 ICO for Centra Tech, which purported to offer cryptocurrency-related financial products. In fact there was nothing backing the trio’s claims at all, with Ilan T. Graff, the Attorney for the United States, summarizing their activities:
Farkas and his co-conspirators created fictitious executives and fabricated business relationships with legitimate institutions to dupe investors into handing over millions of dollars for a fraudulent ICO.
These fabricated business relationships included creating a fake Harvard-educated CEO called Michael Edwards to front Centra Tech. With nothing to show for their investment, the fraudulent operation was reported to the authorities who took action – in 2018 the FBI seized 100,000 ETH in contributions and arrest warrants were issued for the three co-conspirators.
Centra Tech Founders All Plead Guilty
16 months after his arrest Farkas has now been sentenced following his June plea change to guilty, with the charges including “conspiring to commit securities fraud and wire fraud in connection with his and his co-conspirators’ use of material misrepresentations and omissions to solicit investors to purchase securities”.
Farkas was also sentenced to three years of supervised release and ordered to forfeit $347,062.58 and a Rolex watch which were purchased with the fraudulently obtained funds. Co-defendants Sohrab Sharma and Raymond Trapani, who have both also pled guilty, are yet to be sentenced for their part in the Centra Tech scam.