Centra Tech co-founder sentenced to a year in prison for fraudulent ICO

Co-founder of Centra Tech startup Robert Farkas sentenced to a year in prison for organizing and conducting a fraudulent ICO for $25 million.
According to the prosecutor’s office of the Southern District of New York, Centra Tech intended to offer financial products based on cryptocurrencies, for example, debit cards. Centra Tech and its founders claimed significant team experience, and falsely claimed to have 38 licenses to work as a money transfer operator.

In July 2017, Robert Farkas and his partners Raymond Trapani and Sohrab Sharma held an initial token offering (ICO), raising $25 million from investors. Earlier, Farkas pleaded guilty to conspiracy to commit securities fraud and fraud using electronic means to attract investors to buy securities in the form of tokens.

“Farkas and his associates created fictitious executives and fabricated business relationships with legitimate companies to trick investors into transferring millions of dollars as part of a fraudulent ICO,” says Lan Graff, chief legal adviser to the US attorney.

After serving his prison sentence, Farkas will be under the supervision of the authorities for three years. In addition, he must pay a fine of $ 347 062, and his Rolex watch, bought on fraud proceeds, is subject to forfeiture. The US Marshals Service sold ETH confiscated from Centra Tech for about $33.4 million earlier this year.

Recall that at the end of 2 0 1 7, buyers of Centra tokens filed a lawsuit against the creators of the startup. ICO Centra was actively promoted by boxer Floyd Mayweather, as well as music producer and hip-hop artist DJ Khaled. Later, they were also sued, and the US Securities and Exchange Commission (SEC) imposed fines on them. However, a year ago, Floyd Mayweather and DJ Khaled were removed from the list of defendants in the case of illegal ICO Centra Tech.