US Prosecutors Seek ‘Substantial’ Prison Sentence for Centra Tech Co-Founder in $25M Fraud Token Sale

According to court documents, U.S. federal prosecutors are asking that one of Centra Tech’s co-founders, Robert Farkas, be sentenced to prison instead of his request for home confinement and community service.

AccessTimeIconNov 4, 2020 at 7:54 p.m. UTC
Updated Sep 14, 2021 at 10:27 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

U.S. federal prosecutors are seeking a substantial prison sentence for Robert Farkas, one of the co-founders of crypto project Centra Tech, which garnered multiple celebrity endorsements for its initial coin offering (ICO) in 2017. Farkas later pleaded guilty to fraud. 

In a sentencing submission filed with the U.S. District Court for the Southern District of New York on Oct. 30, federal prosecutors said that “a substantial sentence of imprisonment would be reasonable and just in this case,” noting Farkas participated in a scheme that directly caused losses of tens of millions of dollars in funds from hundreds of victim investors. 

In June, Farkas had pleaded guilty to charges of conspiring to commit securities and wire fraud brought in relation to the fraudulent ICO. 

As part of the scheme, Farkas, along with the two other founders, Sohrab Sharma and Raymond Trapan, pitched investors on a “Centra Card” crypto debit card purportedly issued by Visa or Mastercard. They also claimed to have 38 state money transmitter licenses and a CEO who, they said, attended Harvard. In a report from June, prosecutors said tnone of those claims were true. 

While the sentencing submission notes Frakas has requested home confinement and community service, the prosecutors said in the document this would be insufficient given the nature and seriousness of his crimes. 

Endorsed by multiple celebrities including former professional boxer Floyd Mayweather, who later settled charges brought by the U.S. Securities and Exchange Commission, the Centra Tech project raised $25 million in its ICO and was one of many such projects that exploited the nascent nature of such offerings for illicit personal gain. 

The document also said a “substantial sentence of incarceration is also necessary to serve the sentencing goals of adequately deterring criminal conduct.” 

Disclosure

Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by Block.one; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.


Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.


Read more about