Topic: [FRAUD] Centra Tech - The Floyd Mayweather promoted 'Crypto debit card' ICO (Read 634 times)

Just to update this thread with some more news on the arrest and detention of the three main scammers:

https://www.reuters.com/article/us-crypto-currencies-centratech-indictme/u-s-says-centra-tech-co-founders-indicted-for-cryptocurrency-fraud-idUSKCN1IF32O

NEW YORK (Reuters) - U.S. prosecutors on Monday announced the indictment of three co-founders of a cryptocurrency start-up once promoted by the boxer Floyd Mayweather, accusing them of fraudulently raising more than $25 million from investors in an initial coin offering.

Sohrab “Sam” Sharma, Robert Farkas and Raymond Trapani, who co-founded Centra Tech Inc, were each charged with securities fraud, wire fraud and two conspiracy counts, according to an indictment filed with the U.S. District Court in Manhattan.

Prosecutors said the defendants, who live in Florida, misled investors in Centra tokens that they had formed partnerships with Visa Inc (V.N), MasterCard Inc (MA.N) and Delaware-based The Bancorp Inc (TBBK.O) to issue debit cards, lied about having money transmitter licenses and created a fictitious chief executive officer.

Lawyers for the three defendants could not be immediately reached for comment.

The three men were arrested last month and the FBI seized 91,000 “Ether units” consisting of digital funds currently worth $60 million, according to a release announcing the indictment.

Authorities around the world have attempted to rein in the global boom in trading cryptocurrencies - a form of digital money created and maintained by its users.

“As alleged, the defendants conspired to capitalize on investor interest in the burgeoning cryptocurrency market,”

Deputy U.S. Attorney Robert Khuzami said in the release. “Whether traditional or cutting-edge, investment vehicles can’t legally be peddled with falsehoods and lies.”

SEC Halts Fraudulent Scheme Involving Unregistered ICO

FOR IMMEDIATE RELEASE
2018-53

Washington D.C., April 2, 2018 —

The Securities and Exchange Commission today charged two co-founders of a purported financial services start-up with orchestrating a fraudulent initial coin offering (ICO) that raised more than $32 million from thousands of investors last year.  Criminal authorities separately charged and arrested both defendants.   

The SEC's complaint alleges that Sohrab “Sam”� Sharma and Robert Farkas, co-founders of Centra Tech. Inc., masterminded a fraudulent ICO in which Centra offered and sold unregistered investments through a "CTR Token."�  Sharma and Farkas allegedly claimed that funds raised in the ICO would help build a suite of financial products.  They claimed, for example, to offer a debit card backed by Visa and MasterCard that would allow users to instantly convert hard-to-spend cryptocurrencies into U.S. dollars or other legal tender.  In reality, the SEC alleges, Centra had no relationships with Visa or MasterCard.  The SEC also alleges that to promote the ICO, Sharma and Farkas created fictional executives with impressive biographies, posted false or misleading marketing materials to Centra’s website, and paid celebrities to tout the ICO on social media. 

According to the complaint, Farkas made flight reservations to leave the country, but was arrested before he was able to board his flight.  Criminal authorities also arrested Sharma. 

"We allege that Centra sold investors on the promise of new digital technologies by using a sophisticated marketing campaign to spin a web of lies about their supposed partnerships with legitimate businesses,” said Stephanie Avakian, Co-Director of the SEC's Division of Enforcement.  “As the complaint alleges, these and other claims were simply false."

"As we allege, the defendants relied heavily on celebrity endorsements and social media to market their scheme,”� said Steve Peikin, Co-Director of the SEC's Division of Enforcement.  “Endorsements and glossy marketing materials are no substitute for the SEC’s registration and disclosure requirements as well as diligence by investors.”

The SEC’s complaint, filed in federal court in the Southern District of New York, charges Sharma and Farkas with violating the anti-fraud and registration provisions of the federal securities laws.  The complaint seeks permanent injunctions, return of allegedly ill-gotten gains plus interest and penalties, as well as bars against Sharma and Farkas serving as public company officers or directors and from participating in any offering of digital or other securities.  In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Sharma and Farkas. 

The SEC's investigation, which is continuing, is being conducted by Jon A. Daniels, Luke M. Fitzgerald, and Alison R. Levine of the SEC's Cyber Unit and New York Regional Office, and supervised by Valerie A. Szczepanik and Robert A. Cohen.  The litigation is being conducted by Mr. Daniels, Mr. Fitzgerald, and Ms. Levine, and supervised by Ms. Szczepanik.  The SEC appreciates the assistance of the U.S. Attorney’s Office for the Southern District of New York, the Federal Bureau of Investigation, and the Financial Industry Regulatory Authority.

Investors in the Centra ICO who believe they may be a victim should contact www.SEC.gov/tcr.  The SEC's Office of Investor Education and Advocacy has issued an Investor Bulletin on initial coin offerings and additional information is available on Investor.gov and SEC.gov.

how much effort do you think it would take to get into a partnership with a Bank to be able to release even a normal credit card?

They released several high end cards to users before the ICO finished and those people used the cards to make purchases verified in may ways in photo and by video.

From official chat :

Our card is a Co Branded Debit Card from our issuing Bank Partner. We are not directly contracted with Visa or Mastercard.

The app was released on IOS this morning and Android follows shortly after

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