The Southern District of New York sentenced one of the founders of the Centra Tech cryptocurrency project, Robert Joseph Farkas. He was charged with orchestrating a fraudulent ICO that defrauded investors of $25 million.
The court’s verdict proved significantly softer requested sentence than the prosecutors’ request of 70–87 months and a $250,000 fine.
“Farkas and his associates installed fictitious executives and forged business relationships with legitimate institutions. By misleading investors, they induced them to hand over millions of dollars for the fraudulent ICO,” the court’s ruling states.
Seized proceeds from the fraud scheme, totaling about $33.4 million in ETH, are being used in a special amnesty program. Under the program, the U.S. Department of Justice will return the funds to Centra Tech’s victims.
In 2017, Centra Tech raised $32 million during its ICO. The organizers promised to issue a debit card with Visa and Mastercard support. They claimed to hold licenses to process money transfers in 38 states.
In 2018, Farkas, along with fellow founders Sohrab Shah and Raymond Trapani, were charged with defrauding investors. The famous boxer Floyd Mayweather and music producer DJ Khaled, enlisted to provide media support, paid a combined penalty of $767,500.
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