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The co-founder of the fraudulent 2017 ICO Centra Tech was sentenced to eight years in prison for his role in the scheme.
Sohrab Sharma, co-founder of Centra Tech’s famous 2017 coin offering, has been sentenced to eight years in prison for his leading role in the fraudulent scheme that has duped investors out of more than $25 million.
Shama had previously pleaded guilty to conspiring to commit wire fraud, securities fraud, and mail fraud on the grounds of material misappropriation made by him and his co-conspirators to invite investors to participate in the scheme.
U.S. Attorney Ilan Graff characterised Sharma as “leading the scam to trick investors by falsely pretending that the start-up he co-founded has established completely operating, state-of-the-art 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.”
The court found that Sharma and co-defendants Robert Farkas and Raymond Trapani founded Centra around July 2017, claiming that the firm offered a crypto debit card and other digital asset related products. From July 2017 to October 2017, the group carried out an ICO distribution of unlicensed securities in the form of CTR tokens.
To promote the offering, the group issued materials falsely claiming that the team had partnerships with Visa, Mastercard, and Bancorp, a money transmitter licence in 38 U.S. states, along with an entirely fictional CEO with more than 20 years of experience in the banking sector and a master’s degree from Harvard University.
While the team raised $25 million at the completion of the ICO, the authorities found that crypto assets were worth more than $60 million at times in 2018.
The U.S. Marshals Service seized 100,000 Ethers from Centra, which it sold for approximately $33.4 million earlier this year. The proceeds will be made available for potential use in the remission programme to compensate victims of fraud.
Sharma was also sentenced to three years of supervised release and ordered more than $36 million to be forfeited.
In December, Centra co-founder Robert Farkas was sentenced to one year’s imprisonment for his role in the scheme. Trapani also pleaded guilty.
Celebrities’ DJ Khaled and Floyd Mayweather, who promoted the social media offering in 2017, agreed to a six-figure settlement without admitting wrongdoing in 2019 after Centra’s investors filed a lawsuit against the pair.