Centra Tech: Fictional Executives, Licenses and Partnerships

Centra Tech fraud centered on fictional executives, false licenses and invented partnerships used to sell tokens for a supposed cryptocurrency debit-card business. In the Justice Department’s account of its leading co-founder’s guilty plea, the company’s own messages expose the distance between the pitch and the business: a search for someone who resembled a fictional executive, applications for licenses already claimed, and a discussion about making a product page look good without a real product. If you worked on the product, the partnerships or the marketing, that distance is where your knowledge matters.

What Centra Tech Promised Investors

Centra Tech offered a simple promise: spend cryptocurrency through a debit card at businesses accepting Visa or Mastercard. The Miami-based company solicited investment in Centra tokens, also called CTR tokens, through an initial coin offering and other fundraising efforts from approximately July through October 2017. The card was called the Centra Card.

The Justice Department’s criminal plea announcement describes oral and written offering materials distributed over the internet. Centra claimed partnerships with Bancorp, Visa and Mastercard to issue cards licensed by the payment networks. It also claimed an experienced executive team and money-transmitter and other licenses across much of the country.

Those claims made the card pitch seem like an operating business with people and institutions behind it. According to the guilty-plea announcement, the supposed chief executive and another executive were fictional, the claimed partnerships did not exist, and the company lacked the claimed licenses in a number of states. Investors supplied digital funds based in part on those representations.

We see a company selling financial expertise with a management team it had to invent. They were selling access to familiar payment networks, supported by banking experience and regulatory credentials, while privately discussing how to manufacture the appearance of those things.

Fictional Executives Needed Team Photos

Centra Tech’s fictional chief executive supposedly had more than 20 years of banking experience and a master’s degree in business administration from Harvard University. The July 2020 criminal plea announcement says the co-founders knew the executive was invented. It reproduces a text exchange from on or about July 29, 2017, in which the leading co-founder discussed finding someone who looked like the supposed executive and mentioned team photos.

The exchange went beyond inventing a biography. After acknowledging that the supposed executives were not real, the co-founder suggested a story that would explain their disappearance:

The message shows the work going into keeping an invented management team believable, from photographs to an explanation for why those executives would no longer be around. Even their disappearance needed inventing. For someone who handles executive biographies, company photography or investor materials, the relevant evidence can be the instructions behind the finished page.

The banking experience and university credential served a purpose in the fundraising story. They made the imagined executive look qualified to lead a financial-products company. The internal exchange connected that public claim of experience to the people who knew they had invented the person.

False Partnerships and a Product Page That Looked Good

Centra Tech’s claimed relationships with Bancorp, Visa and Mastercard were false, according to the criminal plea announcement. The same announcement describes a July 31, 2017 text conversation in which the co-founders discussed the absence of actual bank or card-company partnerships. Their own conversation addressed the business relationships the offering materials presented as already in place.

On or about September 29, 2017, the day the Securities and Exchange Commission announced a fraud complaint against another initial coin offering, the leading co-founder asked the group to remove false information about the Visa relationship from Centra’s website. Later that day, he admired another company’s product page and wanted something similar. His explanation included this:

The discussion joined the product problem to the presentation problem. A good-looking page was something the co-founder could ask for while acknowledging that the product itself was missing. For a marketing or product employee, the contrast between what management wanted displayed and what management said internally is the point.

The borrowed institutional credibility also appears in My Big Coin’s criminal case. A federal jury convicted that company’s founder in a fraud involving false claims about asset backing, functionality, exchangeability and a Mastercard relationship. The parallel is specific: a claimed connection to an established payment company helped sell the digital-currency story.

Licenses Claimed Before Applications

Centra Tech claimed money-transmitter and other licenses in 38 states while lacking those licenses in a number of them. The Justice Department’s criminal plea announcement describes an internal conversation on or about August 30, 2017 about applying for licenses the company had already represented it held. The leading co-founder wrote:

State money-transmitter licenses, such as those covered by New York’s money-transmitter licensing rules, authorize business in that state. Centra’s order of events is the evidence: a claim of licenses already held, followed by a conversation about applying. Someone handling the applications would have a direct view of the difference between the licensing work underway and the credentials presented to investors.

How Much Centra Tech Raised From Investors

The digital funds raised by Centra Tech were worth more than $25 million at the end of its fundraising efforts in approximately October 2017. The Justice Department’s later account of the criminal case says those funds were worth more than $60 million at certain times in 2018, while the scheme continued.

The connection to the pitch matters as much as the valuation. The announcement says investors provided the digital funds based in part on the claimed executives, partnerships and licenses. A person inside the company may know which representations management approved and what the people soliciting investment were told to say.

What the Public Pitch and Private Messages Show Together

The Justice Department announced the leading co-founder’s guilty plea on July 17, 2020, for conspiring to commit securities, wire and mail fraud. Its account ties the public offering materials to messages showing knowledge of the invented credentials and relationships. The FBI investigated, with assistance from the Securities and Exchange Commission.

A crypto business leaves evidence in more than its transactions. A public blockchain transfer can show value moving while company messages and internal records explain who controlled the transaction, which customer was credited, or what staff knew. Centra makes that distinction concrete: the messages explain the decisions behind the offering’s executive, partnership and licensing claims.

We look at that connection with the person who understands the work. A licensing employee may know when an application began; a product employee may know what was functioning when the sales page went up. Your account of those decisions can connect an investor-facing promise to the people who knew the business could not support it.

Can Crypto Fraud Whistleblowers Earn a Reward?

The SEC’s whistleblower program can pay qualifying whistleblowers a combined 10% to 30% of the money collected in a successful securities enforcement action. We help you assess how your knowledge of a token offering fits that opportunity.

You Know What Stood Behind the Pitch

If you saw a crypto company claim partners, licenses or executives it did not have, speak to one of our Whistleblower Experts about what stood behind the pitch. We work beside you to build your strongest crypto fraud whistleblower case around the promises, the business records and the decisions you witnessed, and bring in crypto fraud whistleblower lawyers who understand token offerings and financial-product claims. We stay with you through the case, with your knowledge of the business at its center.