Sharma, co-founder of Centra Tech, pleads guilty of misleading thousands of investors.
Prosecutors have given assurances that they will continue to aggressively pursue this type of fraud.
Sohrab Sharma, aka “Sam Sharma”, was sentenced to 8 years in prison on March 4th for participating in Centra Tech. Sharma prompted thousands of victims to invest more than $ 25 million in tokens from the Initial Coin Offering (ICO) sponsored by former boxer Floyd Mayweather.
The judgment passed by District Judge Lorna G. Schofield of the Manhattan Federal Court was announced in a press release from the US Department of Justice.
Sharma, a 29-year-old American, founded Centra Tech in 2017 in Miami, Florida with partners Robert Farkas and Raymond Trapani. The Company claimed to provide cryptocurrency-related financial services.
Centra Tech gave false information about its managers.
They are spreading false information to get people to buy their tokens from the ICO. Amongst other things, They invented a CEO, “Michael Edwards,” who reportedly had more than 20 years of banking industry experience and an MBA from Harvard. They said they were affiliated with Bancorp, Visa, and Mastercard to issue cards that allowed users to convert their tokens into dollars, in addition to licenses in 38 states.
Ilan T. Gradd, the prosecutor who delivered the verdict, said, “Sohrab Sharma led a program to mislead investors by falsely claiming that the company he co-founded had developed cutting-edge cryptocurrency-related financial products that were fully functional … We will continue to aggressively pursue digital securities fraud like this one. ‘
Sharma pleaded guilty to fraud
The statement reads: “Sharma accepted his guilt in the conspiracy to commit securities fraud, electronic and postal, related to the use of material misrepresentations and omissions by himself and his accomplices to encourage investors to purchase securities in the form of issued digital tokens to ask. by Centra Tech ”.
After 8 years in prison, Sharma is released under supervision for 3 years. He was also fined $ 20,000.
The ICO funds were seized in 2018 and were 100,000 units of ether, which at some point this year was worth $ 60 million. At today’s price, they would be the equivalent of $ 155 million.
The US Securities and Exchange Commission (SEC) was the one who denounced the culprits of this fraud. CriptoNoticias reported that Farkas, one of the founders of Centra Tech, was sentenced to one year and one day in prison plus three years’ custody release last December.
Alongside Floyd Mayweather, renowned DJ Khaled also got involved in the scam by publicizing the project. Both have been reported to the SEC and fined $ 28,000 and $ 158,000, respectively.