The co-founder of a fraudulent ICO project that duped more than $25 million from investors, Sohrab Sharma, has received a sentence of eight years in prison for his role.
The project itself, dubbed Centra Tech, was previously backed by several celebrities, including the boxing legend Floyd Mayweather and the producer DJ Khaled.
Centra Tech Co-Founder Behind Bars for 8 Years
Founded in 2017, Centra Tech marketed itself as a debit card provider that supposedly allowed purchases with cryptocurrencies at any businesses accepting Visa and MasterCard.
The trio behind the project, namely Robert Farkas, Raymond Trapani, and Sohrab “Sam” Sharma, claimed that a Harvard-educated CEO with over 20 of experience will run the project and that the card had licenses to operate in 38 US states.
However, an investigation from the Department of Justice concluded that the three co-founders had fabricated the information. Consequently, the authorities charged the three men with deceiving investors into allocating over $25 million in the fraudulent ICO project.
Farkas and Trapani pled guilty to conspiring to commit securities fraud, wire fraud, and mail fraud initially, while Sharma joined them last year, as reported. Now, several months later, he has received his sentencing – eight years in prison, according to the DOJ’s statement.
US Attorney Ilan Graff said that Sharma has “led a scheme to deceive investors by falsely claiming that the start-up he co-founded had developed fully functioning, cutting-edge cryptocurrency-related financial products.”
He added that “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.”
Mayweather and DJ Khaled Involved
Taking advantage of a common occurrence at the time, Cantra Tech received the endorsement of at least two celebrities – DJ Khaled and Floyd Mayweather. However, both failed to disclose that they had accepted funding for their actions.
Both received charges from the US Securities and Exchange Commission as a result of the investigation. Shortly after, they agreed to pay penalties without admitting to wrongdoing.
The boxer paid $300,000 in disgorgement, a $300,000 penalty, and $14,755 in prejudgment interest. He also agreed not to promote any securities, digital or otherwise, for a period of three years.
The musician paid $50,000 in disgorgement, a $100,000 penalty, and $2,725 in prejudgment interest while agreeing to avert any ICO promotions for two years.