As of May 17th, 2018, Centra Tech founders, Raymond Trampani, Sohrab Sharma, and Robert Farkas, have been indicted on multiple accounts of fraud. The company managed to reach $32 million with their ICO, but this is the very action that led them to be found guilty of both wire fraud and securities fraud of their investors. This indictment puts the trio at risk for at least five years in jail.

The primarily statement that was considered in the fraud case was their falsified partnerships with Visa and MasterCard, which were advertised in effort to elicit greater token sales. According to the allegations made by US Attorney Robert Khuzami of New York, the team,

“purported to offer cryptocurrency-related financial products, with conspiring to commit, and the commission of, securities and wire fraud in connection with a scheme to induce victims to invest millions of dollars’ worth of digital funds for the purchase of unregistered securities, in the form of digital currency tokens issued by Centra Tech, through material misrepresentations and omissions.”

Floyd Mayweather and DJ Khaled picked the wrong opportunity to get involved with cryptocurrency. Both parties showed their support for the Centra Tech scammers through their Instagram posts, of which Mayweather’s has been taken down. However, in the posts, both indicated they were excited to use the new card to pay for Bitcoin, Ethereum, and unlisted “other coins.”

The biggest problem with this ICO seems to be the allegation that the three founders created a fake CEO, in effort to look more credible as an ICO. However, that’s far from the last wrong decision made in this scheme. In order, the team:

  • Falsely offered the Centra card to spend cryptocurrency tokens in the same way as they would spend VISA or MasterCard credit cards
  • Solicited consumers to buy unregistered security tokens
  • Claimed that Centra Tech had a CEO that had 20 years of experience and a degree from Harvard, though no CEO existed at all
  • Claimed partnerships with Bancorp, Visa, and MasterCard
  • Claimed that the company held licensed in 38 other states

The team has had 91,000 Ether seized, which amounts to $90 million. At this time, authorities with the FBI state that they were charged with:

“one count of conspiracy to commit securities fraud, which carries a maximum potential sentence of five years in prison; one count of conspiracy to commit wire fraud, which carries a maximum potential sentence of 20 years in prison; one count of securities fraud, which carries a maximum potential sentence of 20 years in prison; and one count of wire fraud, which carries a maximum potential sentence of 20 years in prison.”

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