Sohrab Sharma, the co-founder of the now-defunct Florida cryptocurrency company Centra Tech, was sentenced to eight years in prison for pleading guilty to defrauding investors through a fraudulent initial coin offering (ICO). In addition, the court ordered Sharma to confiscate US$36,088,960.

Material misrepresentation

Before Sharma was sentenced, the US Department of Justice (DOJ) also announced the imprisonment of Robert Joseph Farkas, another mastermind of Centra Tech. Both Sharma and Farkas have been accused of using false business relationships with legal institutions to deceive investors.

U.S. lawyer Ilan T. Graff said in a statement that Sharma “led a plan to defraud investors, falsely claiming that the startup he co-founded had developed a fully functional, and Cryptocurrency-related cutting-edge financial products. Products.”

“In fact, Sharma’s most famous invention is forged executives, forged business partnerships and forged licenses. He and his accomplices touted these deceivers to trick victims into handing over tens of millions of dollars. We will Continue to actively pursue digital securities frauds like this one,” Graf said.

In a document submitted to the District Court for the Southern District of New York in 2018, investigators accused Sharma of using “material misrepresentation” regarding “Centra Tech” and its partnership with Bancorp, Visa and Mastercard.

Compensation for Victims of Centra Tech

In addition to false personal information and “claims that Centra Tech has remittance and other licenses in 38 states,” the planners also used celebrities such as DJ Khaled and Floyd Mayweather to promote the scam. According to news.Bitcoin.com, Mayweather and Khalid were subsequently fined for their role in promoting fraud.

See also  This is the top listed company that uses Bitcoin as a reserve asset

At the same time, after the ICO ended, Centra Tech held digital assets worth more than $25 million at the time. According to Graff, the FBI will seize digital assets equivalent to 100,000 ETH in 2018. Later, “The U.S. Marshal’s Bureau sold the confiscated ether units for approximately $33.4 million earlier this year.”

Regarding the seized funds, the Department of Justice said: “These funds and other confiscated fraudulent proceeds will be used in the relief plan that the Department of Justice intends to establish to compensate victims of Centra Tech fraud.”

What is your opinion on the imprisonment of ICO crooks in the United States? Tell us what you think in the comments section below.

Picture Credits: Shutterstock, Pixabay, Wiki Commons