Sohrab “Sam” Sharma, a co-founder of dubious initial coin offering (ICO) of Centra Tech, has decided to take a guilty plea for defrauding investors for $25 million.
Reported by Bloomberg, Sharma’s lawyers informed the US District Judge Lorna G. Schofield in a court filing Monday in New York about the change of his plea to guilty.
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Before Sharma, two other co-founder’s of the same project plead guilty in the court for fraud, the latest being Robert Farkas, who changed his plea last month. Raymon Trapani, another operator of the ICO and also the “mastermind”, was charged by the watchdog agency and he pled guilty for nine counts of the charges brought against him last year.
A hyped ICO during the market boom
The three raised $25 million in via an ICO spaned between July 2017 and March 2018 with a promise to launch a crypto debit card called “Centra Card”, allowing its users to spend in cryptocurrencies at any outlet accepting Visa and Mastercard.
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They even falsified licensing agreements from Visa, Mastercard, and Bancorp to drive the hype of the token sale. They also falsely claimed that the company acquired licenses in 38 US states and was being headed by a Harvard-educated chief executive officer with more than 20 years of business experience.
However, the biggest push to the project was made by celebrity endorsements of boxing star Floyd Mayweather and rapper DJ Khaled.
The US agencies later moved against the two celebrities as both failed to reveal their $100,000 and $50,000 payouts respectively for this and also other ICO endorsements.
Mayweather was fined with $300,000 in disgorgement, a $300,000 penalty, and nearly $15,000 in prejudgment interest for Centra Tech ICO and also for another $200,000 he failed to disclose from another two ICOs. Khaled paid $50,000 in disgorgement, a $100,000 penalty, and nearly $3,000 in prejudgment interest.