The Centra Tech ICO court case amounting to $25 million has lead to sentencing of one of the project founders who pleaded guilty. Other founders are still awaiting trials.
Another scam with celebrities.
Robert Joseph Farkas is one of the co-founders of Centra Tech crypto startup in Miami. The project has managed to attract over $25 million through an ICO due to involving celebrities. Just a week ago Farkas plead guilty in a scam involving securities. One of the key factors that helped attract immense amount of money was using famous people that would promote projects by approving them publicly.
That’s why crypto startup from Miami made a deal with the undefeated fighter Floyd Mayweather and the well-known music artist DJ Khaled for promoting the ICO. The intended purpose of the project was to develop a product called Centra Card that would be able to use VISA and Mastercard terminals for making crypto payments. According to FBI, the whole project was a massive scam that resulted in creating a nonexistent team of staff. It was also quickly established that the company had no relations neither with VISA nor with Mastercard, and had no valid license in most US states.
In April, 2018, the Security Exchange Commission (SEC) filed a civil claim against Centra Tech founders stating that their ICO turned out to be a fraud. The US Attorney’s office for the Southern District of New York field similar charges. One of the founders pleads guilty. On 17th June, 2020 Robert Farkas, one of Centra Tech co-founders, pleaded guilty in this scam that was illegally attracting funds, as a consequence, was declared to be unauthorized sale of securities.
33-year old Farkas pleaded guilty to two charges, and each of them are punishable by up to 5 years in prison. The date of trial wasn’t set but, as reported, Farkas took a plea deal due to confession of deal. He may expect from 70 to 87 months, and a fee amounting to $250 000.
In an official statement the US attorney Craig Stewart said, “Farkas and his accomplices deceived ICO investors making them contribute funds in a digital currency worth millions of dollars and providing false information about the project including its nonexistent link to financial technologies and legal entities. No matter whether such scheme is related to traditional IPO with stocks or new ICOs, attracting capital associated with cryptocurrencies by means of lies and deceit, it is a crime”.
Accomplices of Farkas, Sohrab Sharma and Raymond Trapani, will stand trial at the end of the year in November, while Floyd Mayweather and Haled escaped with large fines.