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.”