U.S. federal prosecutors are seeking a harsh jail sentence for one of the founders of Centra Tech, the company behind the infamous 2017 ICO promoted by pro boxer Floyd Mayweather and musician DJ Khaled.
In a government decision on October 31, the government asked US District Judge Lorna Schofield to sentence Centra Tech co-founder Robert Joseph Farkas to “significant jail time” for keeping other scammers from conducting illegal ICO operations.
“While legitimate ICOs are a new and effective way to raise capital, the loss of investor confidence that can result from false ICO offers will make it difficult for honest coin issuers to raise capital through digital asset markets,” the prosecution said.
“As a result, this case requires a substantial sentence to send a convincing signal to others, such as defendants seeking to use digital assets or other new technologies to commit legacy fraud.”
In June, Farkas pleaded guilty to two counts of fraud related to his role in the ICO, as a result of which from July to October 2017 more than $ 25 million was lured from investors in June this year.
Centra Tech lied about licensing agreements with Visa, Mastercard, and Bancorp to create an undisclosed hype for the crypto debit card maker and ICO, which was promoted with celebrity endorsements.
In the introduction of the verdict from Varcas on October 23, the verdict asked for the time he had already spent (55 days) in addition to home and “a lot of community service,” and claimed that he played an “undisputed” minor role in the scheme.
The prosecution disagreed that federal regulations recommended 70 to 87 months in jail, while the supervisor suggested 60 months.
“Day after day, for about nine months, Farkas was involved in a scheme that directly resulted in the loss of tens of millions of dollars in money from hundreds of sacrificial investors.”