Mastermind of $25 Million Crypto Debit Card Scheme Sentenced to Prison

The mastermind behind a $25 million cryptocurrency debit card scheme has been sentenced to one year and one day in prison, in addition to three years of supervised release. The authorities have also seized his cryptocurrency.

$25 Million Crypto Credit Card Scheme

The U.S. Department of Justice (DOJ) announced Tuesday that Robert Joseph Farkas, also known as RJ, was sentenced to “one year and one day in prison” on Dec. 15. The sentencing was in connection with defrauding investors of more than $25 million in digital tokens issued by Centra Tech, a Miami-based company he co-founded.

Farkas previously pled guilty “to conspiring to commit securities fraud and wire fraud in connection with” digital tokens issued by Centra Tech through an initial coin offering (ICO). Ilan Graff, the attorney for the U.S., stated:

Farkas and his co-conspirators created fictitious executives and fabricated business relationships with legitimate institutions to dupe investors into handing over millions of dollars for a fraudulent ICO.

The 34-year-old and his co-defendants, Sohrab Sharma and Raymond Trapani, founded Centra Tech around July 2017. Their company “claimed to offer cryptocurrency-related financial products, including a purported debit card, the ‘Centra Card,’ that supposedly allowed users to make purchases using cryptocurrency at establishments accepting Visa or Mastercard payment cards,” the DOJ explained.

The defendants solicited investors to purchase the centra tokens, which were considered unregistered securities. They made numerous false claims, including that Centra Tech had an experienced executive team with impressive credentials, had formed partnerships with Bancorp, Visa, and Mastercard to issue licensed Centra Cards, and had money transmitter and other licenses in 38 states.

However, in reality, the company’s Harvard-graduated CEO was fictional and there were no partnerships with Bancorp, Visa, or Mastercard, and…

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