What do you get when you combine an ICO scam with a little help from unwitting celebs? A very unhappy U.S. Department of Justice and thousands of duped victims.
That’s what happened when Sam Sharma, who co-founded crypto company Centra Tech, defrauded victims out of more than $25 million.
Now, Sharma has pleaded guilty to securities fraud and has been sentenced to eight years in jail. Together with co-defendants Robert Farkas and Raymond Trapani, the Miami-based company convinced investors to part with their cash for the ICO and promised to launch a crypto debit card named the “Centra Card.” The idea was that you could spend in cryptocurrencies at any retailer that accepted Visa or Mastercard.
The trio hyped up the token sale by claiming that the company had licensees in 38 U.S. states and was headed by a Harvard-educated CEO with extensive business experience. They also falsely claimed that they had license agreements with Visa, Mastercard and Bancorp.
Floyd Mayweather and DJ Khaled Were Used to Hype Tokens
The twist in the tale comes as the boxing legend Floyd Mayweather and music producer DJ Khaled were brought on board to promote the ICO and Centra Card.
On September 18, 2017, Mayweather tweeted:
“Centra’s (CTR) ICO starts in a few hours. Get yours before they sell out, I got mine.”
As the celebrities didn’t disclose the amount that they were being paid to promote the ICO, the U.S. Department of Justice filed an action against them, which was later dismissed as part of a settlement, which meant they didn’t have to accept or deny the charges, although they did have to pay some hefty fines.