The founder of Centra Tech, a cryptocurrency firm, has recently admitted to actively conspiring towards duping investors to commit over $25 million to the enterprise. The idea of doing this was to lie to investors regarding an initial coin offering, or ICO.
The Two Of The Three Still Due
As Bloomberg reported, three founders of Centra Tech Inc: Sohrab Sharma, Robert Farkas, and Raymond Trapani, were all charged with misleading investors. The charge, initially in 2018, was regarding claims that Centra Tech had developed a credit card that would allow users to make purchases through the use of cryptocurrencies.
The main selling point was that this card could work at any business that accepted Mastercard or Visa. While Farkas has had his court proceedings reach fruition, both Trapani and Sharma are still scheduled for trial, set to occur in November of this year.
Admission Of Guilt
Farkas, however, has pleaded guilty to these charges. He did so on Tuesday, within Manhattan’s federal court. He pleaded guilty to conspiracy to commit wire fraud and securities fraud. He appeared via phone before the Magistrate Judge James Cott, where he took a plea agreement. While initially set to face up to a decade of prison time, this plea deal will see Farkas serve 70 to 87 months, including a hefty fine of $250,000.
The Beginning Of Things
Farkas, Trapani, and Sharma co-founded Centra Tech after the three of them set to work at a luxury rental company based in Florida, aptly named Miami Exotics. This was revealed by the prosecutors in the court case. The trio managed to rapidly raise money for Centra tech through strategic deals made by celebrities to mention them in social media.
This includes the music producer DJ Khaled, as well as the boxing promoter Floyd Mayweather. Centra Tech also lied in regard to the fact that their CEO was someone that was educated at Harvard, as well as a range of other aspects of their businesses, according to the allegations.
In true dubious fashion regarding the case in general, neither Khaled nor Mayweather had revealed that they were paid to promote Centra Tech on social media. The SEC promptly cracked down on both, with investigations showing that Mayweather has been doing this for a bit now, having promoted two other ICOs like this. In total, Mayweather managed to gain $300,000 in the illegal promotion of these ICOs, and the SEC is keen on making him pay reparations for it.