Centra Tech Inc co-founder sentenced to 8 years in prison for ICO fraud
United States Department of Justice today sentenced Sohrab “Sam” Sharma, one of the founders of the ‘Centra Tech’ crypto project, to serve eight years for an “ICO fraud scheme.” Authorities said that the infamous crypto investment scheme attracted more than $25 million worth of digital funds from victims.
Sharma earlier pled guilty to his charges that included conspiring to commit “securities fraud, wire fraud, and mail fraud” through a July 2017 ICO. In addition to the prison term, the 29-year-old Florida resident has been ordered to pay a fine of $20,000 and further forfeit over $36 million in ill-gotten funds.
The Miami-based company boasted experienced chief executives who were fake and advertised false partnerships with companies such as Bancorp, Visa, and Mastercard. The company purported a fake CEO named “Michael Edwards” with credentials such as a two-decade-long experience in banking and education from Harvard University.
It aimed to dupe investors with claims such as Centra Tech’s possession of a money transmitter license that was supposedly valid in 38 US states. The firm went as far as hiring famous people such as boxer Floyd Mayweather and media personality DJ Khaled to promote its tokens among crypto investors. Based on these claims, victims offered the firm crypto running into millions of dollars to invest in the company’s “Centra Tech tokens.”
With regard to the case, US Attorney Ilan Graff said in a statement:
Sharma led a scheme to deceive investors by falsely claiming that the start-up he co-founded had developed fully functioning, cutting-edge cryptocurrency-related financial products.
In 2018, alongside the Federal Bureau of Investigation (FBI), DoJ seized 100,000 Ether as part of funds raised from victims who purchased Centra’s tokens. Earlier this year, US Marshals Service sold the seized Ether assets for approximately $33.4 million. DoJ intends to use these funds and other fraud proceeds to compensate victims of the Centra Tech fraud.