$25 000 000 USD
DESCRIPTION OF EVENTS
"Centra Tech began operations in 2017 as a crypto-financial services company. The company claimed to offer a debit card that converted cryptocurrencies to dollars. During its ICO, they made several false claims, among them an existing partnership with MasterCard Incorporated and Visa Inc for legitimacy."
"Centra Tech, Inc. has developed platforms that connect world commerce and cryptocurrencies. The Centra Card will make it convenient for card holders to spend their cryptocurrencies in all fiat currency transactions creating a true bridge to the world and cryptocurrencies. The CCE (Currency Conversion Engine) Module will enable customers to convert their blockchain assets to market value fiat to a obtain near-perfect exchange rates."
"The company claimed to be working on a debit card that would pioneer the retail use of digital currencies." "Our customers will be able to send money using Centra Tech, Inc.'s mobile app in 8+ major cryptocurrencies to 100+ countries worldwide with-out being charged fees." "Customers will be able to manage their Centra Card through the Centra Wallet available on iOS App Store & Google Play Store as well as desktop/web version."
"To better market themselves, the market sought the services of boxer Floyd Mayweather and music producer DJ Khaled. The two prominent figures helped give the company some credibility."
"FARKAS and his co-defendants represented, in oral and written offering materials that were disseminated via the internet: (a) that Centra Tech had an experienced executive team with impressive credentials, including a purported CEO named “Michael Edwards” with more than 20 years of banking industry experience and a master’s degree in business administration from Harvard University; (b) that Centra Tech had formed partnerships with Bancorp, Visa, and Mastercard to issue Centra Cards licensed by Visa or Mastercard; and (c) that Centra Tech had money transmitter and other licenses in 38 states, among other claims." "The whole experience will improve the online buying experience while eliminating the costs associated to interbank exchange rate fluctuations and excessive fees making your cryptocurrency spendable in real time."
"In July 2017, Farkas and his partners, Raymond Trapani and Sohrab Sharma, held an ICO, or token sale, raising the $25 million from investors who had believed Centra Tech's claims." "So many lies went into enabling the company to raise more than $25 million in its ICO."
"In 2020 Robert Farkas, one of the co-founders of Centra Tech, was sentenced to a year in prison after he pleaded guilty to securities fraud and wire fraud. Before the reduced sentence, he stood up to ten years in prison. He also had to forfeit $347,062.58 and a Rolex watch he purchased with fraud proceeds."
"Centra Tech's co-founder has been sentenced to eight years for conducting an illegal initial coin offering (ICO) that fleeced investors of $25 million."
"The U.S Marshals Service sold ethereum (ETH, 5.14%) cryptocurrency seized from Centra Tech for about $33.4 million."
"Following entry of a final order of forfeiture, these funds and other forfeited fraud proceeds will be available for potential use in a remission program that the Department of Justice intends to create to compensate victims of the Centra Tech fraud."
Centra Tech pretended that they could provide a service for spending cryptocurrency through a credit card, including fake partnerships with Mastercard and Visa. There was no such service, however investors happily sent them vast sums of money based on the claims.
Six Cryptocurrency Fraud Schemes You Should Know | Onyx (Sep 18)
Centra Tech Co-Founder Gets 8 Years for Crypto Fraud - CoinDesk (Oct 13)
Centra Tech Co-Founder Handed Prison Term for $25M Crypto Fraud - CoinDesk (Oct 13)
https://www.justice.gov/usao-sdny/pr/co-founder-cryptocurrency-company-who-defrauded-ico-investors-sentenced-prison (Oct 13)
https://www.linkedin.com/company/centra-tech-inc (Oct 13)
PR: Centra Tech Announces ICO, Centra Card, & Insured Wallet – Press release Bitcoin News (Oct 13)
https://www.cnbc.com/2017/10/30/centra-token-how-floyd-mayweather-helped-two-guys-from-miami-get-rich.html (Oct 20)
https://medium.com/@ducktator/ico-scams-hall-of-fame-dc915f1189af (Jan 17)