Robert Farkas, a co-founder of Centra Tech, has admitted to deliberately defrauding investors to the tune of $25 million during its Initial Coin Offering (ICO).
Farkas is one of Centra Tech’s three founders, with Sohrab Sharma and Raymond Trapani as the other two. According to a Bloomberg report, the trio was charged with intentionally misleading investors during its ICO in 2017.
According to a press release by the US Department of Justice, “’Farkas and his co-conspirators duped ICO investors into investing digital currency worth millions of dollars based on fictitious claims about their company, including misrepresentations relating to its purported digital technologies and its relationships with legitimate businesses in the financial services sector,’ said Craig Steward, a US attorney.
Part of the scam was based on a special crypto credit card, Centra Card, that will be used for crypto transactions much like any other credit or debit card.
On Tuesday, June 16, Farkas pleaded guilty but is currently awaiting a sentencing date. He will serve 70-87 months in prison and pay a $250,000 fine. The hearing of the two other co-conspirators is expected to commence sometime in November 2020.
Centra Tech used two celebrities to promote their scheme; DJ Khaled and Floyd Mayweather. An SEC investigation fined both celebrities $152,725 and $614,775 respectively for their roles.
Image Credits: Pixabay
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