Victor Ugochukwu · Dec 14, 2020 . 5min read
Centra Tech Co-founder serves a harsh sentence from U.S. Prosecutors for ICO fraud
The U.S. government seeks harsh sentencing for the founder of Centra Tech, Robert Farkas, for a fraudulent, celebrity-promoted ICO in 2017.
By Komal Joshi · Nov 5, 2020 . 5min read
U.S. federal prosecutors are seeking a harsh prison sentence for Robert Farkas. He is one of the co-founders of the crypto project Centra Tech. This project accumulated various celebrity endorsements for its initial coin offering (ICO) in 2017. Farkas later pleaded guilty to fraud. It was promoted by professional boxer Floyd Mayweather and musician DJ Khaled.
In a sentencing submission filed with the U.S. District Court for the Southern District of New York on Oct. 30, federal prosecutors state that an important sentence of incarceration would be fair. This is in accordance with Farkas participating in a scheme that instantly caused losses of tens of millions of dollars in supplies from hundreds of victim investors. In June, Farkas had declared guilty to charges of planning to perform securities and wire fraud brought concerning the fraudulent ICO.
Farkas falsely claimed to license agreements with Visa and Mastercard.
Moreover, Farkas, along with the two other founders, Sohrab Sharma and Raymond Trapan, pitched financers on a “Centra Card” crypto debit card issued by Visa or Mastercard. Centra Tech misrepresented about licensing agreements with Mastercard, Visa, and Bancorp to encourage ill-informed hype for its crypto debit card product and ICO, which was pushed by celebrity endorsements. They also claimed to possess 38 state money transmitter licenses and a CEO who, they stated, visited Harvard.
Various celebrities involving former professional boxer Floyd Mayweather were promoting the ICO. However, he later resolved charges brought by the U.S. SEC. For the uninformed, the Centra Tech project raised $25 million in its ICO. Moreover, it was one of many such projects that utilized the developing nature of such offerings for illegal private gain.
While the sentencing submission states that Farkas has demanded home confinement and community service, however, the prosecutors state that this would be inadequate according to the nature and gravity of his crimes. Further, the prosecution objected. Moreover, it suggests imprisonment between 70 to 87 months, while the probation office suggested 60 months.
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