SEC files fraud charges against co-founder of Centra Tech

The Securities and Exchange Commission has filed charges against Raymond Trapani, the third co-founder of Centra Tech Inc., due to accusations of fraud surrounding an initial coin offering which raised $32 million and promised a crypto debit card.

“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,” said the SEC’s Robert Cohen. “Investors should exercise caution about investments in digital assets, especially when they are marketed with claims that seem too good to be true.”

The SEC’s complaint alleges that Trapani was the “mastermind” of the ICO that allegedly deceived investors with promises of partnerships with major credit card companies, misleading claims regarding the company’s product, false founder biographies, and manipulation of the company’s digital currency Centra Token.

The SEC also alleges that Trapani and the others knowingly engaged in fraud and point to a string of text messages as evidence of its claims.

“Text messages among the defendants reveal their fraudulent intent,” the complaint reads. “After receiving a cease-and-desist letter from a major bank directing him to remove any reference to the bank from Centra’s marketing materials, Sharma texted to Farkas and Trapani: ‘[w]e gotta get that s[***] removed everywhere and blame freelancers lol.’”  And, while trying to get the CTR Tokens listed on an exchange using phony credentials, Trapani texted Sharma to “cook me up” a false document, prompting Sharma to reply, “Don’t text me that s[***] lol.  Delete.”

In addition to the SEC’s complaints, Tech Crunch reports that the U.S. Attorney’s Office for the Southern District of New York has announced criminal charges against Trapani.

“As alleged, Raymond Trapani conspired with his co-defendants to lure investors with false claims about their product and about relationships they had with credible financial institutions,” said Deputy U.S. Attorney Robert Khuzami. “While investing in virtual currencies is legal, lying to deceive investors is not.”

In addition to the alleged deception, Centra’s ICO was bolstered by endorsements from celebrities such as recently retired boxer superstar Floyd Mayweather.

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