Third Crypto Co-Founder Behind $25 Million ICO Scam to Plead Guilty

Published at: July 14, 2020

Sohrab Sharma, one of the co-founders of cryptocurrency firm Centra Tech facing charges related to a $25 million initial coin offering scam, is reportedly planning to plead guilty. 

According to a July 13 report from Bloomberg, Sharma may avoid a November trial date as his lawyers told a federal judge he would be interested in changing his plea. 

The announcement comes after Sharma’s associate Robert Farkas was convicted of conspiring to commit securities and wire fraud on June 16. Farkas faces up to 87 months in prison and a $250,000 fine. 

A history of scamming

The U.S. Department of Justice (DOJ) stated that Sharma, Farkas, and Raymond Trapani were arrested in April 2018. 

The three reportedly lied to investors about having a fictitious Chief Executive Officer (CEO) at Centra Tech, Michael Edwards, as well as having a money transmitter license in 38 states. The company made false claims about partnerships with major firms including Visa. 

The charges from the DOJ allege the trio’s goal from these deceptions was to dupe people into investing in Centra Tech’s initial coin offering (ICO) of Centra tokens, also called CTR tokens.

Celebrity support

When the ICO was held between July and October 2017, it was backed by celebrities including former pro boxer Floyd Mayweather and music producer DJ Khaled. 

Both men were subsequently charged by the Securities and Exchange Commission (SEC) for unlawfully promoting the ICO and failing to disclose payments they received from Centra Tech to their followers.

The case involving the third co-founder in this enterprise, Trapani, is still scheduled for trial in November.

Tags
Regulation
Sec
Crimes
Ico
Scams
Related Posts
Court Orders Purported Crypto Company Longfin to Pay $6.7M Penalty
The United States District Court for the Southern District of New York has ordered purported cryptocurrency company Longfin to pay a total of $6,755,848 million in penalties. Falsely obtained qualification for Regulation A+ offering On Sept. 30, the Securities and Exchange Commission (SEC) announced that a New York federal court entered a default ruling against the fintech company for “fraudulent public offering and falsifying revenue from sham commodities transactions.” According to the SEC, Longfin and its CEO Venkata S. Meenavalli falsely obtained qualification for a Regulation A+ offering by claiming that the blockchain-powered firm was operating within the U.S. However, …
Blockchain / Oct. 1, 2019
SEC charges promoters of Steven Seagal-spruiked ICO from 2018
The U.S. Securities and Exchange Commission has charged three individuals for various cryptocurrency frauds including the 2018 initial coin offering for the Steven Seagal-promoted altcoin, Bitcoiin2Gen. A Feb. 1 SEC announcement estimates that Bitcoiin Gen founder John DeMarr, Start Options founder Kristijan Krstic, and promotor Robin Enos duped investors out of more than $11 million through two fraudulent and unregistered securities offerings from December 2017 until May 2018. The SEC alleges that Krstic and DeMarr first spruiked Start Options’ purported crypto asset mining and trading platform in December 2017 and January 2017, falsely claiming it was “the largest Bitcoin exchange …
Regulation / Feb. 2, 2021
SEC Charges Ohio Man for $33M Crypto Fraud Targeting Physicians
An Ohio man has been charged by the United States Securities and Exchange Commission for allegedly defrauding 150 investors in a cryptocurrency trading scheme. The SEC’s complaint, filed in federal court in New York on Feb. 11, accuses Michael W. Ackerman of raising at least $33 million in violation of anti-fraud provisions for federal securities laws. Luring investors via a private Facebook group for “Physician Dads” Ackerman’s scam was operated together with two unnamed founding partners, with whom he established the Q3 Trading Club in June 2017. This was followed by an investment partnership Q3 I LP, and an affiliated …
Regulation / Feb. 12, 2020
US SEC Freezes Assets of Alleged Crypto Scam Backed by a Former State Senator
The United States Securities and Exchange Commission (SEC) has frozen the assets of Meta 1 Coin, an alleged crypto scam backed by a former state senator that promised investors returns of up to 224,923% without ever having any actual tokens. Per a March 20 announcement from the SEC, the regulator initially froze Meta 1’s assets on March 16 and is charging the firm’s operators with fraud. Currently, the SEC seems to be pursuing fines and disgorgement rather than jailtime for those involved. Claims of art and gold assets Meta 1 claimed its tokens were backed, but the cited backing shifted …
Regulation / March 20, 2020
US SEC Seeks Sanctions Against Individuals Behind Alleged Crypto Scam PlexCoin
The U.S. Securities and Exchange Commission (SEC) is seeking sanctions against the individuals behind the allegedly fraudulent Initial Coin Offering (ICO) known as PlexCoin, Finance Feeds reports September 26. The SEC has been involved in ongoing court proceedings against the owners of the associated firm PlexCorps — Dominic Lacroix and Sabrina Paradis-Royer — at the New York Eastern District Court since December 2017. The SEC’s initial complaint had charged the pair with violating securities law in respect to PlexCorps’ PlexCoin ICO in August 2017. The complaint had accused Lacroix — whom it called “a recidivist securities law violator in Canada” …
Blockchain / Sept. 26, 2018