Founder of Floyd Mayweather-Promoted ICO to Plead Guilty to Fraud
U.S. District Judge Lorna Schofield has granted Farkas’ attorneys’ request to schedule a plea hearing for next week, with details of the proposed plea yet to be disclosed.
The trials of Farkas and fellow Centra founder Sohrab Sharma were delayed until September as the coronavirus lockdown took effect during March.
Centra Tech founder to negotiate plea deal
Farkas and Sharma face charges for defrauding investors out of more than $25 million between July and October 2017 through the Centra Tech ICO.
Centra Tech falsified licensing agreements with Visa, Mastercard, and Bancorp to drive hype for the offering, before paying for endorsements from professional boxer Floyd Mayweather Jr and popular musician DJ Khaled.
Raymon Trapani was also charged with operating the ICO, however, pleaded guilty to nine counts in July 2019. The trio concocted Centra Tech while operating a luxury car rental company in Florida.
Celebrities liable for ICO spruiking
In November 2018, Mayweather and Khaled were charged by the United States Securities and Exchange Commission (SEC) for “unlawfully touting coin offerings.”
The SEC found that neither Mayweather nor Khaled had revealed their respective $100,000 and $50,000 payouts for promoting the offering to their social media followers. Mayweather was also found to have failed to disclose $200,000 in payments for promoting two other ICOs.
In total, Mayweather agreed to pay $300,000 in disgorgement, a $300,000 penalty, and nearly $15,000 in prejudgment interest for his role in promoting the three ICOs. Khaled paid disgorgement of $50,000, a $100,000 penalty, and nearly $3,000 in prejudgment interest.
In February, actor Steven Seagal was charged by the SEC for unlawfully promoting the Bitcoiin2Gen ICO in 2018 without disclosing that he was paid to endorse it. While Segal claimed to have only received $157,000 for promoting the scheme, the actor settled to pay $330,000 plus $16,000 in prejudgment interest