Floyd Mayweather and DJ Khaled Backed ICO’s Co-Founder Pleads Guilty of Fraud

Robert Farkas, the co-founder of Centra Tech, is one of the lead defendants on a massive case, including securities and wire scam, and a fraudulent ICO, raising more than $25 million, according to the FBI.

Farkas Plead Guilty, Co-Defendants Set On Another Trial

According to the office of the United States Attorney for the Southern District of New York, the co-founder of crypto start-up Centra Tech Robert Farkas pled guilty in court on charges of conspiring and committing securities and wire fraud.

The 33-year old had partnered with other co-founders Sohrab Sharma and Raymond Trapani. They’ve allegedly “solicited investors to purchase unregistered securities, in the form of digital tokens issued by Centra Tech (“Centra tokens” or “CTR tokens”).” The scam raised more than $25 million during its initial coin offering (ICO) in 2017.

During the case, it became clear that the Miami-based start-up had employed celebrities to hawk its ICO, among which boxer superstar Floyd Mayweather and DJ Khaled. Ostensibly, Centra Tech was to develop the so-called “Centra Card,” which ought to be compatible with VISA and MasterCard terminals to make payments via cryptocurrency holdings.

A Massive Fraudulent Scheme With “Fictional” Individuals

The agency also said that Centra Tech has come up with some non-existing individuals, who were supposedly part of the management team, including probably made-up CEO “Michael Edwards.” The investigation also stated that the company has had nothing to do with Bancorp, VISA, or MasterCard, for that matter. It was not even licensed in many states, in which it claimed to be.

“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.  Whether in the context of traditional equity IPOs or newer cryptocurrency-related ICOs, raising capital through lies and deceit is a crime.”, said United States Attorney Craig Steward. 

Now Farkas pled guilty on two charges, each of them bringing a sentence of up to 5 years in prison. As Bloomberg reported, the defendant agreed to seek a sentence of 70 to 87 months and a fine of as much as $250,000. The other two co-defendants will be facing trials in November.

Featured image courtesy of GQ Australia