Author: Jagdish Kumar, India
Florida based Indian origin man, Sohrab Sharma along with other two have been charged with multi-million dollar fraud.
All the three are the co-founder of start-up company called Centra Tech, which was dealing in cryptocurrerncies in the Us.
Sharma along with Raymond Trapani and Robert Farkas were running a ponzi scheme and making false claims about their product and about relationships they had with credible financial institutions.
The jury in the Southern District of New York indicted the three on the charges with conspiring to commit securities and wire fraud in connection with a scheme to induce victims to invest millions of dollars’ worth of digital funds in the form of digital currency tokens issued by the company.
According to allegations made in July 2017, the three began looking for investors to purchase unregistered securities in the form of digital tokens issued by Centra Tech, through a so-called initial coin offering (ICO).
After the arrests, the Federal Bureau of Investigation (FBI) seized 91,000 Ether units, consisting of digital funds raised from victims. The seized digital currency is presently worth more than USD 60 million.
Centra Tech also told investors that their potential investors that they have partnerships with Bancorp, Visa, and Mastercard to issue Centra Cards licensed by Visa or Mastercard along with money transmitter and other licenses in 38 states.
At the end of Centra Tech’s ICO ended October 2017, the company raised more than USD 25 million. Due to appreciation in the value of those digital funds raised from victims, those digital funds are presently worth more than USD 60 million.
But the representations made by the three accused were false, as the investigation found that they had no such partnerships with Bancorp, Visa, or Mastercard.
Apart from this, the Securities and Exchange Commission also filed civil charges against the three men.