One of the founders of a cryptocurrency scam that defrauded over $25 million from investors has been sentenced to eight years in prison. Sohrab Sharma, the co-founder of Centra Tech, reportedly relied on fake partnerships and endorsements from celebrities like boxing champion Floyd Mayweather to lure investors.
In its ruling, the Southern District of New York further imposed three years of supervised release on the 29-year-old Florida native. He will also have to forfeit $36,088,960 and pay a $20,000 fine.
As CoinGeek previously reported, Sharma pleaded guilty to charges of conspiracy to commit securities fraud, mail fraud and wire fraud in July 2020. His trial was set to start in November 2020, but he ended up pleading guilty, avoiding it altogether.
Commenting on the sentencing, U.S. Attorney Ilan Graff stated, “Sohrab 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 reality, Sharma’s most notable inventions were the fake executives, fake business partnerships, and fake licenses that he and his co-conspirators touted to trick victims into handing over tens of millions of dollars.”
Graff reiterated his office’s commitment to stamping out crime in the digital currency industry, stating, “We will continue to aggressively pursue digital securities frauds like this one.”
Sharma joins his fellow cofounder Robert Farkas who was sentenced to jail in December 2020. Farkas had pleaded guilty as well, admitting to have committed wire fraud and conspired to commit securities fraud. These crimes could have seen him land in jail for up to 10 years. However, a Manhattan court only sentenced him to one year and one day in jail. He also had to forfeit $347,000 he gained illegally from the scam and an expensive Rolex watch.
The two founded Centra Tech in 2017, alongside Raymond Trapani who has also been arrested and pleaded guilty to his crimes as well.
They managed to enlist celebrities to lure investors. They brought onboard Mayweather and Grammy Award-winning producer DJ Khaled as promoters. The two celebrities had to settle with the SEC for not disclosing that they received compensation to promote the scam.
In addition, Centra Tech claimed to have partnered with Bancorp, Mastercard and Visa to issue Centra Cards. This emerged to be a lie after the three companies denied ever working with Centra Tech.
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