On Friday, the US Securities and Exchange Commission (SEC) released a complaint document outlining charges against the three co-founders of Centra Tech Inc, the company which raised $32 million USD through an initial coin offering (ICO) and held its reputation through its support by champion boxer Floyd Mayweather.
It was announced in an official SEC press release earlier this month that the company’s co-founders Sam Sharma and Robert Farkas had been charged and arrested for the fraudulent activity involved in the ICOs methods.
Now, in a newly released document, the SEC describes the details in which Sharma, Farkas and the third founder, Raymond Trapani, were apparently involved in malicious business behavior.
Reportedly, aside from engaging in an illegal securities offering which had not been lawfully registered, the founders made false claims to entice customers, paid off celebrities to endorse the token and doctored the project’s white paper on various occasions offered to various provisional clients.
The aggressive social media approach the founders took is also outlined, such as how they “created pseudonymous online identities and used them in online chat rooms or bulletin-board forums such as Reddit to promote the Centra ICO or to harass or bully posters critical of Centra.”
Intimidation tactics of online critics were not only exclusive to threats. The three were also discovered to bribe critics with Centra Tokens in exchange to remove unfavorable posts or videos. In an alleged text conversation, Farkas had asked Sharma whether he had had success to get a post removed using a bribe, to which Sharma responded “Yea 2k CTR [Tokens].” “To him it’s 2 racks. To us its air Lol.”
SEC issues complaint to founders of @centra_card ICO. Aside from engaging in an illegal unregistered securities offering to the tune of $32 million, they also tried to choose a CEO based on resemblance to stock photos used. You can’t make this up.https://t.co/A65Ec6Yb4b pic.twitter.com/mX8VucYDcP
— ?? (@FluidFluxation) April 21, 2018
Attempted cover-ups for false claims were tried using deception and blatant lying. After Sharma had received a cease-and-desist from The Bancorp – a major banking institution – with instructions to remove any reference to the bank from Centra’s promotions, Sharma texted Farkas and Trapani that they had to “get that s[***] removed everywhere and blame freelancers lol.” And in efforts to get the ICO tokens listed on an exchange using fake credentials, Trapani texted Sharma to “cook [him] up” a document, to which Sharma replied with amusement that he shouldn’t text him things like that.
Further falseness was reportedly involved in the way in which the defendants had used fictional biographies to promote the company and then attempted to build fictional stories for the ‘executives’. CEO “Michael Edwards” and “Jessica Robinson” were particularly detailed and the document tells of how Sharma almost killed Jessica’s character after questions were raised, saying that they were going to “kill both Ceo and [Jessica]. Gonna say they were married and got into an accident.”
The official paper, which outlines the colorful creativity of the defendants, is black and white in detail and makes for interesting reading for anyone invested in either Centra’s ICO or a narrative of Centra’s founder’s illegal activity.