The co-founder of the cryptocurrency firm Centra Tech, Robert Farkas, has been sentenced to one year of imprisonment for conducting an illicit ICO [Initial Coin Offering] that fleeced investors for $25 Mln.
The Miami-based company had alleged to offer cryptocurrency-based financial products like a debit card, consistent with a news release from the Attorney’s Office within the Southern District of New York recently on Tuesday.
It had touted a powerful executive team that didn’t exist, also as falsely claiming it held 38 state money transmitter licenses, prosecutors added.
Earlier in July 2017, Farkas along with his partners, Raymond Trapani and Sohrab Sharma, held an ICO, or token sale, raising the $25 Mln from investors who had believed Centra Tech’s claims.
Earlier also, Farkas had pleaded guilty to conspiring to commit securities fraud and wire fraud in reference to the utilization of material misrepresentations and omissions to solicit investors to get securities within the sort of the firm’s tokens.
“Farkas and his co-conspirators created fictitious executives and fabricated business relationships with legitimate institutions to dupe investors into delivering several dollars for a fraudulent ICO,” added lan T. Graff, chief counsel to the acting United States attorney, within an official statement.
Farkas will also face 3-years of supervised release and must forfeit $347,062 USD and a Rolex watch purchased with the proceeds of the scam.
The U.S. Marshals Service sold Ethereum [ETH, +1.34%] cryptocurrency seized from Centra Tech for over $33.4 Mln earlier this year.