Robert Joseph Farkas, Securities Fraud, New York 2023

Robert Joseph Farkas, 1 Year and 1 Day in Prison for Securities Fraud in New York

Robert Joseph Farkas, a/k/a 'RJ,' was sentenced to one year and one day in prison on December 15, in connection with his participation in a scheme to induce victims to invest more than $25 million dollars' worth of digital funds in Centra Tech, Inc., a Miami-based company he co-founded.

Farkas previously pled guilty to conspiring to commit securities fraud and wire fraud in connection with his and his co-conspirators' use of material misrepresentations and omissions to solicit investors to purchase securities, in the form of digital tokens issued by Centra Tech, through an initial coin offering (ICO) beginning in approximately July 2017.

U.S. District Judge Lorna G. Schofield imposed the sentence in Manhattan federal court.

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, according to statements in the Superseding Information and other filings and statements at public court proceedings in the case.

According to the statements, Farkas and his co-defendants Sohrab Sharma and Raymond Trapani founded Centra Tech in or about July 2017, which 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.

From approximately July 30, 2017, through October 5, 2017, Farkas and his co-defendants solicited investors to purchase unregistered securities, in the form of digital tokens issued by Centra Tech, through a so-called 'initial coin offering' or 'ICO.'

The claims that Farkas and his co-conspirators made to help secure these investments were false. In fact, the purported CEO 'Michael Edwards' and another supposed member of Centra Tech's executive team were fictional people who were fabricated to dupe investors, Centra Tech had no such partnerships with Bancorp, Visa, or Mastercard, and Centra Tech did not have such licenses in a number of those states.

In 2018, this Office and the Federal Bureau of Investigation (FBI) seized, pursuant to judicially authorized seizure warrants, 100,000 Ether units, consisting of digital funds raised from victims who purchased digital tokens issued by Centra Tech during its ICO based on fraudulent misrepresentations and omissions.

The United States Marshals Service sold the seized Ether units for approximately $33.4 million.

Defendant: Robert Joseph Farkas, a/k/a 'RJ'

Criminal Charges: Conspiring to commit securities fraud and wire fraud

City and State: New York

Exact Date: December 15, 2023

Sentence or Outcome: One year and one day in prison

Dollar Amounts: $25 million (initial investment), $33.4 million (seized Ether units)

Source: https://www.justice.gov/usao-sdny/pr/co-founder-cryptocurrency-company-who-defrauded-ico-investors-sentenced-prison