Co-founders Of Centra Tech Sent To Jail Over ICO Scam
In a report gathered yesterday, Centra Tech co-founder Robert Farkas is set to spend the next one year and one day in prison for his participation in an initial coin offering (ICO) scheme that defrauded investors of more than $25 million. It is worthy to note that barely two years ago, the blockchain ICO industry, which is supposed to offer token as a form of problem, became a source of loss for a lot of investors.
In research carried out then, it was discovered that over 80% of ICOs were scams whose intention will only lead to losses for investors. The fallout from the ICO industry is still on the rise from the last two years as the industry has not been able to revive from the setback.
Farkas and his co-conspirators devised dubious means to extort investors
Ilan Graff, attorney for the United States, revealed yesterday in his statement that Farkas and his colleagues in the scam created fake executives and fabricated business relationships with legitimate financial institutions to dupe investors into handing over millions of dollars for a fraudulent ICO.
He further revealed that from the investigations carried out, Farkas induced the investors to commit over $25 million worth of digital asset in Centra Tech. The returns for the scammed-investors is a promise to get digital products in exchange for their investments.
Farkas and his co-conspirators, Sohrab Sharma and Raymond Trapani, solicited the purchase of unregistered securities between July and October of 2017. To smoothen their scam procedure, they claimed that the company, Centra Tech was led by Micheal Edwards, a banker who possess more than 20years of experience, a claim which was uncovered as false and never existent.
Farkas and his co-conspirators scammed massive amounts off investors
Farkas and co did not hold back all available means of scamming their investors. They even claimed that Central Tech had entered into partnerships with Visa and Mastercard to foster Centra Tech financial arm. All these moves were signalled to convince investors to purchase the firm’s token. The purchase had led to heartbreaks for many investors in the scheme.
The schemes at one point were worth over $60million, and it was reported that the FBI seized over 100,000 units of Ethereum (ETH), consisting of digital funds raised from Farkas and co. victims in 2018. The US Department of Justice intends to create a remission program for all the seized funds from Farkas and re-distribute it to compensate the victims of the Farkas-led Centra Tech franchise.
The company was a blockchain project headquartered in Florida, United States. The organization was best known for developing the first debit card technology to hold multiple cryptocurrencies blockchain assets. Its two founders, Sam Sharma and Robert Farkas, were arrested on Sunday, April 1, 2018, with federal charges including securities fraud, conspiracy to commit securities fraud, wire fraud and conspiracy to commit wire fraud.