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Notorious Centra Tech Co-Founder Set to Plead Guilty

Centra Tech’s co-founder Pleads Guilty to Fraud

The case against Centra Tech appears to be moving along swiftly, as authorities expect a guilty plea from a separate co-founder soon. Yesterday, Bloomberg confirmed that Sohrab Sharma, one of Centra Tech’s founders, had agreed to plead guilty. The founder’s attorneys informed U.S. District Judge Lorna G. Schofield in a court filing Monday in New York that he would like to change his plea.

A $25 Million Scam

Sharma is the third member of Centra Tech’s founding team to plead guilty to its fraud operations. The other two are Robert Farkas, one of the company’s executives, and Raymond Trapani, the “mastermind” of the scam operation.

Centra Tech’s scam isn’t entirely new. The three partners founded the company in Miami, building an elaborate cryptocurrency operation on lies. They deceived unsuspecting investor by creating a fictitious chief executive called Michael Edwards. The fake executive was positioned as a Harvard grad with several educational accolades including a Masters in Business Administration, and over two decades of experience in the banking industry. The company also came up with an audacious move to launch a cryptocurrency debit card called “Centra Card,” which they claimed would allow people to make crypto payments at any location or merchant that accepts VISA or MasterCard card.

To help sell their scam, they employed aggressive promotion and marketing tactics. Most notably, they enlisted celebrities – boxing legend Floyd Mayweather Jr. and hip-hop artist DJ Khaled. Centra Tech had an Initial Coin Offering (ICO) in 2017, successfully duping investors of $25 million.

Everything Comes Crashing Down

Soon enough, the jig was up, and Centra Tech faced a civil suit from the Securities and Exchange Commission (SEC). Mayweather and Khaled were also charged for unlawfully promoting the ICO and failing to disclose endorsement details to their followers. The two men eventually paid $615,000 and $153,000 in penalties, respectively.

As for the founders, they had a long road ahead of them. Last month, a federal court in Manhattan sentenced Farkas to prison for his role in the scam. According to the official press release, Farkas had been facing charges of conspiring to commit securities and wire fraud. His sentence was between 70 to 87 months in prison, and he will have to pay a $250,000 fine.

Trapani will have his day in court in November. There is also every likelihood that Sharma’s case will get finalized at that point. As for Farkas, his sentencing date isn’t known yet, either.

It has been a pretty tough week for crypto scammers, as most of them continue to bite the dust. Earlier this week, reports confirmed that police in Wanzhou, China, had dismantled a significant crypto-related scam in the region.

Reports explained that the gang had been operating since last year, and they primarily used Telegram chat groups to get their victims. The scammers pretended to be investors, telling the victim that they merely needed to send their cryptocurrencies to a fake Huobi wallet. Then, the victim will get a substantial amount in Huobi Token in return.

Instead, all the victims got was a broken link. The scheme managed to amass over 100 million yuan ($14.31 million), which police officers seized along with a fleet of luxury cars and property.

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