Sohrab Sharma, one of the founders of the Centra Tech cryptocurrency project, was sentenced to eight years in prison for his role in the fraudulent scheme.
Sharma pleaded guilty to conspiracy to commit electronic communications fraud, securities fraud, and mail fraud. According to the prosecutor, Sharma " led a scheme aimed at deceiving investors with false claims that the startup he founded had developed a fully functioning advanced financial product related to cryptocurrencies."
"In fact, Sharma's most notable inventions were nonexistent executives, business relationships, and licenses that he and his associates promoted so that the victims would give them tens of millions of dollars," the prosecutor added.
The court found that Sharma, along with Robert Farkas and Raymond Trapani, founded the Centra Tech project in July 2017 and began promoting it as a provider of crypto-payment cards and other financial products in the field of cryptocurrencies. From July to October 2017, Centra Tech conducted an initial coin offering (ICO). In their advertising materials, they falsely claimed to have business relationships with Visa, Mastercard and Bancorp, licenses in 38 states, as well as a CEO who allegedly worked in the banking industry for 20 years and received a master's degree from Harvard. DJ Khaled and Floyd Mayweather took part in the promotion of the project.
As a result of the ICO, Centra Tech managed to raise $25 million, but the prosecution found that at some point in 2018, these assets were worth more than $60 million. The FBI seized 100,000 ETH from the project, and the Marshals Service sold them for $33.4 million. The proceeds are planned to be used to compensate the victims of fraud. Farkas was previously sentenced to a year in prison, and Trapani also pleaded guilty.