Ghosts from the past are coming to haunt back those involved in fraudulent ICOs back in 2017. It was a time when ICOs were the hottest thing in the market and hundreds of new projects were surfacing almost every day. One such project was Centra Tech, but it was later discovered to be a fraudulent ICO. According to reports, the co-founder of the scheme is now being sentenced to 8 years in prison.
The guilty, Sohrab Sharma, co-founder of the infamous Centra Tech ICO backed by popular celebrities like Floyd Mayweather, has been sentenced to eight years in prison for playing a major part in the fraudulent scheme that duped investors out of more than $25 million.
Sharma had pled guilty to charges for committing wire fraud, securities fraud, and mail fraud for material misrepresentations made by him and his co-conspirators to lure in investors to participate in the scam ICO.
According to United States attorney, Ilan Graff, Sharma “led a scheme to deceive investors by falsely claiming that the start-up he co-founded had developed fully functioning, cutting-edge cryptocurrency-related financial products.”
“In reality, Sharma’s most notable inventions were the fake executives, fake business partnerships, and fake licenses that he and his co-conspirators touted to trick victims into handing over tens of millions of dollars.”
Following an investigation, it was discovered that Sharma and co-defendants Robert Farkas and Raymond Trapani founded Centra in July 2017. The firm advertised that it offered a crypto debit card and other digital asset-related products. They conducted an ICO from July 2017 until October 2017, during which they distributed unlicensed securities with their CTR tokens.
The group also misled investors by making false claims that they were partnered with companies like Visa, Mastercard, and Bancorp, and even had money transmitter licensing in 38 U.S. states, along with a made-up CEO boasting more than 20 years experience in the banking sector and a master’s degree from Harvard University.
The $25 million worth of crypto assets amassed by the firm amounted to more than $60 million at certain times during 2018. The U.S. Marshals Service had seized 100,000 Ether from Centra, which was later sold for $33.4 million. The proceeds from the sale would be used to compensate victims of the fraud.
Sharma has also been ordered three years of supervised release along with forfeiting funds worth more than $36 million. Co-founder Robert Farkas was sentenced to a year in prison for his role in the scheme. Trapani has also pleaded guilty.
Meanwhile, celebrities involved in promoting the scheme, namely DJ Khaled and Floyd Mayweather, agreed to pay a six-figure fine without admitting to any wrongdoing.