By Lacie-Mae Durham
Sohrab Sharma is facing charges over a $25M ICO investment scheme
Another co-founder of the cryptocurrency firm, Centra Tech, is reportedly planning to plead guilty in an ongoing trial.
Sohrab Sharma is currently facing charges over a $25 million initial coin offering (ICO) scam, as well as an article from Bloomberg released on July 13 that indicated Sharma may avoid a trial in November.
This announcement follows news that Robert Farkas, Sharma’s associate, was convicted of conspiring to commit securities and wire fraud last month. He pleaded guilty to the charges on June 16 and faces up to 87 months in prison with a $250,000 fine.
The US Department of Justice revealed that Sharma, alongside Farkas and Raymond Trapani, were arrested in April 2018.
According to the reports, the three lied to their investors about having a Chief Executive Officer (CEO) at Centra Tech named Michael Edwards. They embellished this nonexistent CEO by saying that he had over 20 years of experience in the banking industry and a master’s degree in business administration from Harvard.
The trio also claimed that the firm had a money transmitter license in 23 states. Lastly, they also released false claims about having partnerships with major firms, including Visa.
The charges from the DOJ speculate that the goal of the trio from these false claims was to lure people into investing in Centra Tech’s initial coin offering (ICO) of Centra tokens, also called CTR tokens. To this purpose, the trio was successful; as the digital funds that were raised from their victims amounted to over $25 million in 2018, because the scheme was ongoing, the funds grew to over $60 million.
When the ICO for Centra tokens was held last July to October 2017, a handful of celebrities voiced their support, including music producer DJ Khaled and former professional boxer Floyd Mayweather. The two men were swiftly charged by the US Securities and Exchange Commission (SEC) for their unlawful promotion of the ICO as well as their failure to disclose payments they had received from the company to their followers.
The case for Trapani, the third co-founder in the enterprise, remains scheduled for trial in November.
Centra Tech reportedly made claims that they offered other cryptocurrency-related financial products, such as a “Centra Card.” This was a debit card that allegedly allowed users to make purchases with cryptocurrency at establishments that accepted Visa or Mastercard payment cards.