The US Securities and Exchange Commission has issued a press release regarding the investigation into Centra Tech, a company which raised $32 million through an allegedly fraudulent ICO.
The release names Raymond Trapani as a third defendant. He joins Centra Tech co-founders Sohrab “Sam” Sharma and Robert Farkas in the dock. Sharma and Farkas were both arrested on the 1st of April.
Centra Tech advertised itself as a provider of cryptocurrency debit cards. However, the SEC alleges that these products never really existed. Robert A. Cohen, Chief of the SEC Enforcement Division’s Cyber Unit, said: “We allege that the Centra co-founders went to great lengths to create the false impression that they had developed a viable, cutting-edge technology.”
The SEC also said in its initial complaint that the Centra website featured an entirely fictitious team. The company has attracted extra attention because it used celebrities as advertisement, receiving endorsements from Floyd Mayweather and DJ Khaled.
It is now alleged that Raymond Trapani was “a mastermind of Centra’s fraudulent ICO”. It is not the first time that he has faced legal action due to his involvement with the company; the same three were targeted by a class action suit in December 2017 (together with another associated individual named William Hagner), in which customers are seeking their money back from Centra Tech.
The native token of the Centra Tech blockchain is called CTR. The SEC release says that Trapani worked with Sharma to artificially prop up the price of CTR so as to attract investment.
Suspicious text messages are also revealed. Apparently, Trapani requested via text that Sharmani fabricate a document for him, using the words “cook me up”. Sharmani replied: “Don’t text me that s[***] lol. Delete.”
The SEC seeks the return of ill-gotten gains plus interest and penalties, as well as a ban on Trapani working in the financial sector in any capacity. The US Attorney’s Office for the Southern District of New York filed has filed criminal charges – meaning that the penalties could include jail time.