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Speaker 1: Shortly after my sixteenth birthday, invested two thousand of my

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Speaker 1: earnings I was going to use for college into the

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Speaker 1: initial coin operative Center Tech. I lost most of my

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Speaker 1: original investment and was left with tokens for a company

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Speaker 1: it's worthless, a sham, and a fraud.

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Speaker 2: Victim impact statements these offer the opportunity to describe the emotional, physical,

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Speaker 2: and financial impact of a crime they have suffered. As

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Speaker 2: the case against Center Tech drew closer, the government heard

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Speaker 2: from many investors.

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Speaker 1: I bet that most of the victims of this crime

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Speaker 1: ordinary people like me.

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Speaker 3: All your funds are gone, just overnight gone. My soul

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Speaker 3: was crushed at that point.

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Speaker 4: People are financially ruined from this and they're clinging at straws.

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Speaker 3: There's been so much trauma involved, it brings it back

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Speaker 3: up every time I think about it.

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Speaker 2: As you can imagine, most of these victims were pissed.

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Speaker 5: The founders of CenTra genuinely hurt people.

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Speaker 6: In my case, it led to a falling out, and

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Speaker 6: ultimately I haven't spoken to my father in four years now.

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Speaker 1: I ask the court to make sure this case is

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Speaker 1: a powerful precedent that deters anyone from doing this again.

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Speaker 2: But here's the thing, the case against centri Tech would

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Speaker 2: never go to trial. I'm Johnny be Good and this

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Speaker 2: is creating a con the story of Bitcom episode eight,

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Speaker 2: the United States versus centri Tech. Imagine you start a

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Speaker 2: company in July. By late October, that company has collected

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Speaker 2: tens of millions of dollars and its valuation is in

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Speaker 2: the hundreds of millions. That's going to raise a few eyebrows,

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Speaker 2: and it did. This was the reality for Centritech. By

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Speaker 2: November twenty seventeen, the SEC was looking deeply into the

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Speaker 2: activities of the tech firm and its founders. Five months later,

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Speaker 2: Ray Trepani, Sam Sorby Sharma, and Robert Farkes found themselves

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Speaker 2: sitting behind bars for wire fraud, securities fraud, and conspiracy

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Speaker 2: to commit both. They were each facing up to sixty

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Speaker 2: five years in prison. I fancy myself many things, but

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Speaker 2: a lawyer is not one of them. So here's former

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Speaker 2: SEC Prosecutor Howard Fisher to explain the serious charges they

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Speaker 2: were facing.

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Speaker 7: Wire fraud is actually one of the most commonly charged

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Speaker 7: frauds because it's so broad. It simply means that there

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Speaker 7: were lies told and wires were used. So if they're emails,

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Speaker 7: or if there are bank statements, or if there are

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Speaker 7: transfers of funds that take place electronically, and there were

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Speaker 7: lies told, it's a wire.

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Speaker 5: Fraud and securities fraud.

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Speaker 7: Securities fraud is basically I am lying to you or

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Speaker 7: I'm not telling you something you need to know, and

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Speaker 7: there is a purchase or sale or offering of a

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Speaker 7: security involved.

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Speaker 2: And of course conspiracy to commit both. Remember, a security

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Speaker 2: is a term that's used to describe a wide array

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Speaker 2: of investments, such as stocks and bonds, really any type

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Speaker 2: of investment that's expected to increase in value. The FEDS

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Speaker 2: were out to set a precedent to define cryptocurrencies as

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Speaker 2: a security. They thought by doing so, it would ensure

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Speaker 2: everyday investors were in preyed on by fraudile on actors

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Speaker 2: in the crypto space like Centritech. To do so, the

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Speaker 2: SEC wanted to pin y Sam Sharma and Robert Farcus

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Speaker 2: to the wall. Just to be clear, I know exactly

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Speaker 2: what the Feds came across in their investigation, but we

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Speaker 2: wanted to take you through some of the evidence we

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Speaker 2: saw in the SEC's indictment, evidence that we also came

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Speaker 2: across and producing this podcast a timeline of the life

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Speaker 2: and death of CenTra. It wasn't a long life, but

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Speaker 2: it was a full one. For the FEDS to build

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Speaker 2: their case, they would need to start by understanding how

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Speaker 2: the concept behind Centritech came to be. That information was

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Speaker 2: public from one of Sam Sharma's early interviews.

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Speaker 8: One day, I was like, what if I could just

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Speaker 8: go spend my bitcoins and just go buy stuff with

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Speaker 8: it without having to worry about withdrawing, depositing, et cetera.

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Speaker 8: And that's where kind of the idea manifested for centric Card.

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Speaker 2: Sam Sharma's vision to disrupt the crypto space was conceived

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Speaker 2: on July eighth, twenty seventeen, when he registered the website

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Speaker 2: CenTra dot tech. Ray remembers hearing the idea from Sam

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Speaker 2: for the first time.

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Speaker 9: But no fucking idea what crypto is or anything about

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Speaker 9: it or what he's talking about. But I do trust

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Speaker 9: his business sense.

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Speaker 2: Ray joined the company that very same month, and Robert Farcas,

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Speaker 2: the brother of Sam's girlfriend, joined shortly after.

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Speaker 5: Later.

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Speaker 2: In July of twenty seventeen, Sam Sharman incorporated center Tech

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Speaker 2: in Delaware, with offices out of Sam's apartment in Miami.

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Speaker 2: According to the government filings, Center Tech was born on

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Speaker 2: July twenty seventh, twenty seventeen.

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Speaker 9: After the groundworks all laid where in Serbey's apartment every day.

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Speaker 2: A bunch of guys working out of an apartment wasn't

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Speaker 2: the look they were going for, so they created a

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Speaker 2: fictitious CEO named Michael Edwards.

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Speaker 9: The name is obviously just a very generic Michael Edwards

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Speaker 9: with a picture of some random guy from Canada that

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Speaker 9: looks professional.

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Speaker 2: This didn't go unnoticed, As Nathaniel Popper of The New

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Speaker 2: York Times recalls, one.

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Speaker 10: Of the bloggers started digging into this and discovered that

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Speaker 10: the image of their CEO, this guy Michael Edwards, was

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Speaker 10: back to professor at a Canadian university who had absolutely

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Speaker 10: nothing to do with Center Tech.

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Speaker 2: This was the first clear case of fraud marketing to

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Speaker 2: potential investors that your company was being run by a

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Speaker 2: Harvard educated banker with decades of experience, when in reality,

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Speaker 2: Michael Edwards never even existed. That wasn't the only thing

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Speaker 2: Ray and Sam did to mislead investors. According to text

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Speaker 2: messages obtained by the SEC, in late July twenty seventeen,

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Speaker 2: Sam told Ray to go make a LinkedIn and make

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Speaker 2: as many connections as you can link yourselves as Center Tech,

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Speaker 2: as COO, Google coo LinkedIn profiles and get all the info.

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Speaker 2: Ray responded accordingly, it was like.

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Speaker 9: A mad rush to create LinkedIn's and me and sorby

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Speaker 9: both put education from Harvard. Obviously, people start questioning that

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Speaker 9: I changed mind to UCLA shortly after.

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Speaker 2: Oh, I didn't know he transferred another instance of whire fraud.

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Speaker 2: Ray never attended Harvard or UCLA for that matter, but

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Speaker 2: he had investors thinking he did. As Center Tech's fundraising ICO,

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Speaker 2: or initial coin offering, launched at the end of July

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Speaker 2: twenty seventeen, the guys slapped together a white paper using

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Speaker 2: sophisticated methods such as control C and control v plagarizing

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Speaker 2: their business plan from another crypto company. The SEC found

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Speaker 2: that Centra's original white paper touted relationships with Bancor as

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Speaker 2: well as Visa and MasterCard, but New York Times reporter

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Speaker 2: Nathaniel Popper revealed those relationships never existed.

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Speaker 9: That's like the most illegal thing we did was saying

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Speaker 9: that we had those bank contracts.

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Speaker 5: More wire fraud.

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Speaker 2: Look, I have no idea how Ray comes up with

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Speaker 2: his whole criminal scoring system. But it all sounds super

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Speaker 2: illegal to me. Then in August, center received an unlikely

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Speaker 2: endorsement from a crypto guru named Cliff High.

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Speaker 9: From Cliff, I kickstarted our whole thing.

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Speaker 2: Cliff naming the wrong CenTra and his wealth report that

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Speaker 2: misprint sparked a flurry of investments from his fan base,

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Speaker 2: and even though he retracted it and apologized quickly, Cliff's

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Speaker 2: words carried some significant financial weight. We emailed Cliff asking

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Speaker 2: him to sit for an interview on this podcast. He

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Speaker 2: responded to our producer, Nope, period, not interested. Period in

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Speaker 2: the past period alrighty. Then by the end of August,

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Speaker 2: Centertech received their first season desist letter from Bancourt. That's

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Speaker 2: when investigators found evidence that the co founders started scrubbing

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Speaker 2: bankcor from their marketing materials. Here's Nathaniel Popper of The

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Speaker 2: New York Times again.

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Speaker 10: Every time that they respond by scrubbing something, they're acknowledging

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Speaker 10: that whatever they've scrubbed as a problem.

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Speaker 2: I'd imagine investigators agreed with Nathaniel's assessment removal of the

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Speaker 2: fraud that should count. By September, Center Tech had brand ambassadors.

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Speaker 9: We got in touch with Floyd Mayweather and we're like,

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Speaker 9: you know, let's get an endorsement. And Floyd Mayweather does

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Speaker 9: a commercial for US and he does two Instagram posts

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Speaker 9: for two hundred thousand.

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Speaker 2: Then came a second celebrity promoter another.

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Speaker 9: One, and so we're like, yo, let's get DJ Khaled.

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Speaker 5: Some would say the best.

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Speaker 11: Way, the best.

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Speaker 2: The guys paid fifty thousand to DJ Khaled, who in

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Speaker 2: turn posted on Instagram about the center Card being a

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Speaker 2: game changer.

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Speaker 9: And that brings in, like, you know, a couple million.

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Speaker 2: That was problematic for the SEC because Floyd Mayweather and

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Speaker 2: DJ Khaled failed to disclose that they were paid to

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Speaker 2: endorse centri Tech. And guess what, the SEC came after

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Speaker 2: them too. Turns out they were the first to get

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Speaker 2: fined by the SEC for promoting a cryptocurrency. These fines

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Speaker 2: weren't light. Floyd Mayweather paid over six hundred thousand dollars

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Speaker 2: in penalties, while DJ Khaled was fined over one hundred

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Speaker 2: and fifty thousand dollars. The SEC came across more text

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Speaker 2: messages between the co founders. September twenty ninth, Sam texts

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Speaker 2: Ray and farcas anything that doesn't exist current we need

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Speaker 2: to remove we don't have a real product either.

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Speaker 5: Right now.

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Speaker 9: There's text messages in my indictment that say, you know,

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Speaker 9: we have to clear all the fufu, Like that's kind

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Speaker 9: of what we were thinking, like all the bullshit, We

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Speaker 9: had to just take it away.

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Speaker 2: That was around the time Nathaniel Popper was investigating Centritech

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Speaker 2: for his New York Times cover story.

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Speaker 10: How Floyd Mayweather helped two young guys from Miami get rich.

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Speaker 2: After lots of digging into the company, Nathaniel learned the

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Speaker 2: truth or lack thereof around centri Tech and printed his

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Speaker 2: juicy article.

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Speaker 10: On October twenty seventh. That's the day that the New

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Speaker 10: York Times article appeared, and that's the day when it

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Speaker 10: became clear that this was not a real business.

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Speaker 2: By the end of March twenty eighteen, the Southern District

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Speaker 2: of New York, the FBI, and the SEC filed charges.

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Speaker 2: On April first, twenty eighteen, the SEC officially shut down

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Speaker 2: center Tech, and by the end of the month, all

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Speaker 2: three co founders were sitting in jail facing criminal charges.

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Speaker 2: Center Tech investor Mehdi was shocked at what he found online.

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Speaker 3: I went onto center Tech's website and you get that

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Speaker 3: big screen that says SEC Security Exchange Commission shut down

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Speaker 3: site and had their big logo in the middle of

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Speaker 3: the screen.

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Speaker 2: The government felt confident with the evidence they had, but

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Speaker 2: they wanted one more asset on their side before going

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Speaker 2: to trial. By the end of April twenty eighteen, Ray

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Speaker 2: found himself locked up in Broward County Jail in Miami,

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Speaker 2: awaiting word on what would be next for him. His

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Speaker 2: bail was set at seven hundred and fifty thousand dollars.

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Speaker 9: I'm in jail for like a week, basically just withdraw

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Speaker 9: cold turkey in a prison.

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Speaker 2: Ray's mom, Carrie, she always finds a way. She posted

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Speaker 2: bond for Ray that week, but the court had one condition.

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Speaker 2: His next stop would have to be rehabed. It would

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Speaker 2: be Ray's thirteenth visit. We were all hoping things would

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Speaker 2: be different this time.

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Speaker 9: I'm just like fucking going on like paddle boards and

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Speaker 9: going to the beach and you know, flirting with like

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Speaker 9: random crackheads in the rehab you know, regular shit. More

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Speaker 9: worried about like my cigarettes than I was about like

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Speaker 9: anything people had been to rehab. Understand what I'm saying.

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Speaker 2: I gotta believe that deep down, Ray knew if he

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Speaker 2: didn't get his shit together, he'd be sitting in a

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Speaker 2: cell until his ninetieth birthday. Ray and I were talking

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Speaker 2: more regularly at this point. Ray's mom had just landed

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Speaker 2: him a new lawyer and they were forming a defense

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Speaker 2: on one call with him. I remember Ray explaining the

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Speaker 2: choices as lawyer laid out for him.

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Speaker 12: She's like, three things you can do fight the case, which,

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Speaker 12: of course you like a million dollars, cooperate, or you

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Speaker 12: can plead out or some shit like that.

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Speaker 1: You know.

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Speaker 7: The push for cooperators really took off following the financial crisis.

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Speaker 2: Once again, here's our friend Howard Fisher, formerly of the SEC.

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Speaker 7: Cooperators can be essential for variety of reasons. First, they

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Speaker 7: could tell you where the bodies are buried. They could

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Speaker 7: also help you in the discovery process, walk you through

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Speaker 7: the documents. I mean, in a lot of cases you

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Speaker 7: have literally millions of documents, but they don't necessarily connect

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Speaker 7: unless you have someone to connect them. And finally, and

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Speaker 7: perhaps the most important reason why you have a cooperator

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Speaker 7: is that it prevents the other defenders from telling a

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Speaker 7: story without any checks on it.

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Speaker 9: I might fucking whatever, I'll cooperate sounds good to me.

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Speaker 9: I mean, I've always co operated every time, every time

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Speaker 9: I've ever got in trouble in my life.

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Speaker 5: I'm just like, all right, fucking I'll help with you.

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Speaker 9: Benef it's me fuck them words.

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Speaker 2: I never thought I would hear Ray Trepani, state's witness.

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Speaker 9: I was just so willing to talk at this point.

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Speaker 9: I was like, there's nothing for me to hide anymore

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Speaker 9: in my life, Like I want to get this shit across.

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Speaker 2: Ray flipping on salmon farcas was the final piece prosecutors needed.

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Speaker 2: At the advice of his attorney, Ray agreed to the

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Speaker 2: government steal. But to get that deal, Ray would need

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Speaker 2: to spill the tea like kettles of tea, like the

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Speaker 2: fucking Boston Tea Party two point zero.

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Speaker 9: The first time meeting with them is the hardest. You know,

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Speaker 9: you end up having to go back to like your

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Speaker 9: youngest childhood crimes, and you committed selling wheat and large

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Speaker 9: amounts of heroin and cocaine and drugs like that.

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Speaker 5: This was no simple interrogation.

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Speaker 2: Ray was sitting in front of FBI agents, SEC investigators,

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Speaker 2: and US district attorneys.

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Speaker 5: Tough crowd, i'd say, and he break that ice.

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Speaker 9: They're basically just dogging me, right, like, just completely shitting

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Speaker 9: on me. We're going to fuck you if you're not

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Speaker 9: telling us the truth because there's a trust barrier, right.

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Speaker 2: If they were going to put Ray on the stand

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Speaker 2: testify against Sam Sharma and Robert Farcas, they needed to

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Speaker 2: know he was willing to come clean about everything from

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Speaker 2: high school to crimes. He wasn't even alive to see.

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Speaker 9: They even asked me about my grandfather and if my

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Speaker 9: grandfather ever committed any crimes. I'm like, yeah, he definitely

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Speaker 9: committed crimes. I just have no idea what he did.

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Speaker 2: That's a tall order for Ray. This kid is coming

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Speaker 2: down off a decade of excessive drug use. To remember

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Speaker 2: each one of his infractions had to be impossible, right well,

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Speaker 2: Ray past the test and Rai's cooperation. It led to

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Speaker 2: a pretty wild indictment by the SEC, which they brought

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Speaker 2: to the Southern District of New York.

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Speaker 7: There's so much it's like you're going to Thanksgiving. There

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Speaker 7: are forty seven vegetable side dishes, and you like vegetable

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Speaker 7: side dishes.

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Speaker 2: Here's former SEC Prosecutor Howard Fisher again, who happens to

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Speaker 2: be pretty good with analogies.

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Speaker 7: Do you go for lying about your executive board, making

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Speaker 7: stuff up about your business partners, perhaps a little appetizer

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Speaker 7: of using celebrity endorsements. Maybe finish up with a dessert

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Speaker 7: of paying off people on the internet who put in

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Speaker 7: bad statements about you. Whatever you choose, you have an

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Speaker 7: incredible feast laid out before you.

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Speaker 2: That feast for the SEC prosecutors, well, it was served

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Speaker 2: up by Rays. He cooperated with investigators and it didn't disappoint.

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Speaker 7: It's also not only one of these loast of complaints

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Speaker 7: with tons of stuff. It was among the first ico prosecutions.

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Speaker 5: That's right.

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Speaker 2: Centro was one of the first crypto companies to be

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Speaker 2: prosecuted for fraud because it was the first of its kind.

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Speaker 2: The SEC had Ray walk them through everything that took

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Speaker 2: place behind Centra's doors.

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Speaker 13: At the time, you had the SEC, Justice Treasury all

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Speaker 13: trying to figure out what the fuck is bitcoin.

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Speaker 2: That's Robert Farcas's lawyer, Paul Petruzzi. Robert was raised former

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Speaker 2: partner at Center Tech.

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Speaker 13: From an idea perspective, CenTra was a very very good idea.

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Speaker 13: But you can only fake it till you make it.

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Speaker 13: For so long before they find out that your Harvard

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Speaker 13: degree is not so crimson fake pictures, fake degrees, it's

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Speaker 13: stuff that's easy to prove is false. And see, that's

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Speaker 13: where you become a.

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Speaker 2: Target and has a strong opinion about what happened once

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Speaker 2: Center Tech became a target.

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Speaker 13: I think if there wasn't a New York Times article,

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Speaker 13: it wouldn't have been a prosecution.

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Speaker 2: That could be true, But remember the New York Times

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Speaker 2: article came out the same month that authorities copied all

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Speaker 2: the data off Ray's business phone. That's text, messages, emails, contacts,

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Speaker 2: you name it. Authorities got full access to all of

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Speaker 2: Ray's frauduleent behavior. Our team couldn't confirm exactly what started

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Speaker 2: the investigation, but Ray's arrests from his perjury charge certainly

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Speaker 2: feels like a front runner.

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Speaker 13: I think they were almost embarrassed into prosecuting the case.

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Speaker 2: On the opposite side, I'm sure the government was less

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Speaker 2: concerned about the optics around the New York Times article

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Speaker 2: and more focused on ensuring their key witness didn't embarrass

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Speaker 2: them in court.

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Speaker 13: I don't know how they prepped Ray, because they managed

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Speaker 13: to get him on a day where he wasn't high.

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Speaker 2: I mean He's not wrong. Ray was whacked out of

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Speaker 2: his mind throughout his time at Center Tech. So was

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Speaker 2: the government see curious about putting Ray on the stand.

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Speaker 13: I was chomping at the bit to go to trial

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Speaker 13: on this because I wanted to cross Ray bad. It

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Speaker 13: was more than just you know, him going on benders

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Speaker 13: and burglarizing houses. It was more than him violating his

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Speaker 13: conditions of release by testing positive for drugs to bad

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Speaker 13: shit bringing a gun to the office repeatedly. I mean,

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Speaker 13: who does that?

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Speaker 2: The trial kept getting pushed, and then COVID hit, which

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Speaker 2: put the trial on ice for even longer. Farcas and

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Speaker 2: Petruzzi had an important decision to make.

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Speaker 13: Could we have put on a defense that the real

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Speaker 13: purpose that the false statements were made were to fit

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Speaker 13: in We're to stop being rassed about being so young

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Speaker 13: or so brown. We're to stop being rassed for being

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Speaker 13: a dropout from West Virginia University instead of a Harvard grad. Yes.

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Speaker 13: Was there an obvious intent to have this company be legitimate? Yes?

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Speaker 13: But does that take away from prior misrepresentations? No, and

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Speaker 13: so a trial in this case would have been extraordinarily risky.

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Speaker 2: During the summer of twenty twenty, over two years since

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Speaker 2: their arrest, both Robert and Sam Sharma decided to plead out.

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Speaker 2: In Robert's deal, he admitted to one count of wirefraud

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Speaker 2: and one count of conspiracy to commit wirefraud.

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Speaker 13: Robert's the good man who got caught up in something

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Speaker 13: that just went too far.

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Speaker 2: Given that most of the world was on lockdown thanks

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Speaker 2: to COVID. Both sentencing hearings were done virtually, like over

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Speaker 2: a zoom call. Farcas's hearing was up first in December

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Speaker 2: twenty twenty. Instead of standing in a New York courtroom,

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Speaker 2: he was in front of a computer screen at his

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Speaker 2: home in Florida. His family and even Sam were there

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Speaker 2: with him. His lawyer made one final case for why

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Speaker 2: Robert shouldn't spend the next ten years behind bars.

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Speaker 13: He's one of those defendants that shouldn't have been a

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Speaker 13: defendant to begin with. He came into CenTra, and I

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Speaker 13: was really doing good things there to try to turn

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Speaker 13: what started initially in a wrong way into a company

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Speaker 13: that could have gone places.

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Speaker 2: Robert would then make his final plea to the judge

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Speaker 2: for mercy. There aren't recordings of these hearings, so we

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Speaker 2: used voice actors. To recreate what was said in the

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Speaker 2: court transcripts of the proceedings. Here's Robert Farcas's statement to

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Speaker 2: Judge Laurna Schofield.

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Speaker 4: I do want to say that I am extremely ashamed

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Speaker 4: of my actions. There are not enough words for me

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Speaker 4: to find to say that I'm sorry to the victims,

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Speaker 4: but I'm sincerely sorry. As I rock my daughter to

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Speaker 4: sleep every night, I think of what kind of father

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Speaker 4: I want to be. Being her father is the most

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Speaker 4: incredible and fulfilling role that I've ever been granted that

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Speaker 4: it saddens me.

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Speaker 2: At the same time, the judge called Farcas the least

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Speaker 2: guilty of the three partners, but was his guilt small

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Speaker 2: enough to avoid prison time.

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Speaker 14: Mister Farcas, after assessing the particular facts of this case,

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Speaker 14: it is the judgment of the court that you were

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Speaker 14: to serve a custodial sentence of a year and a day,

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Speaker 14: to be followed by three years of supervis relief.

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Speaker 13: I wasn't expecting a pass I thought it was a

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Speaker 13: good sentence. I thought it was a good result in

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Speaker 13: the case.

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Speaker 2: With Robert getting a year and a day in prison,

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Speaker 2: the court turned its attention to Sam Sharma, whose sentencing

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Speaker 2: hearing took on a completely different tone. In March of

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Speaker 2: twenty twenty one, nearly three years since his arrest, Sam

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Speaker 2: Sharma logged onto the most important zoom call of his life,

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Speaker 2: his sentencing hearing. The mastermind behind Centritech had pled guilty

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Speaker 2: to conspiracy to commit wire fraud, conspiracy to commit mail fraud,

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Speaker 2: and conspiracy to commit securities fraud. Unlike Robert Farcas's hearing,

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Speaker 2: they were a handful of tech investors listening in.

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Speaker 1: The FBI had reached out to me and asked me

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Speaker 1: to testify as a victim in Sam Sharma's sentencing.

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Speaker 2: Nick Bail was one of those Center Tech investors on

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Speaker 2: the call. By the time of Sam's sentencing, Nick was

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Speaker 2: a freshman in college and had lost the two grand

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Speaker 2: he invested when he was only sixteen. He listened to

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Speaker 2: the hearing from his college dorm in Michigan.

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Speaker 1: The prosecution comes up and they just teared the guy

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Speaker 1: to shreds. I mean for almost an hour. You know,

401
00:23:29,760 --> 00:23:33,920
Speaker 1: every detail of his life, every stone got unturned, every relationship,

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Speaker 1: every petty thing he did when he was probably sixteen

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Speaker 1: that he thought was funny.

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Speaker 2: Here's the thing about sentencing hearings, every bad thing you've

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Speaker 2: done in your life, it all gets brought up. That

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Speaker 2: meant that judge heard about Sam's many scams and schemes,

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Speaker 2: including the perjury charge that stemmed from SAM'SDWI, even crimes

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Speaker 2: that Sam was never charged with, like those ghost loans

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Speaker 2: from his days as a car salesman and the three

410
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Speaker 2: hundred ninety five thousand in law he took out in

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Speaker 2: the name of an elderly man. They even touched on

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Speaker 2: the time Sam ripped off a priest. According to prosecutors,

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Speaker 2: Sam Sharma pulled off four major schemes, with Centritech being

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Speaker 2: his greatest. Here's what prosecutor Nagar Tekie had to say,

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Speaker 2: followed by Sam Sharma's attorney, Jerry Coriglia.

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Speaker 15: Your honor, he was the admitted and undisputed mastermind of

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Speaker 15: this scheme, who oversaw every aspect of its operation, and

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Speaker 15: who personally obtained approximately thirty six million in fraud proceeds.

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Speaker 1: You're like, Okay, this guy's going to jail for life,

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Speaker 1: and then the defense comes up.

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Speaker 11: During his teen years, his parents got divorced, which took

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Speaker 11: an emotional toll on him. Not just an emotional toll,

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Speaker 11: a financial toll. He was a disappointment to his father,

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Speaker 11: and his father put immense pressure on him and that

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Speaker 11: had a substantial effect on him.

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Speaker 1: Remember like almost tearing up at that point. I was like,

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Speaker 1: this is really raw, really.

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Speaker 11: Emotional, but the bottom line is passed. As well as

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Speaker 11: the fact that he was using alcohol and marijuana during

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Speaker 11: this time factored into his decision making.

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Speaker 1: You're like, Okay, maybe he's not going to jail for life,

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Speaker 1: even though I probably shouldn't have. I've felt empty. He's

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Speaker 1: a young guy trying to start a family, and how

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Speaker 1: he's gotten receive the light a day.

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Speaker 2: For years, Sam's lawyer claimed Sam was in way over

436
00:25:28,640 --> 00:25:31,919
Speaker 2: his head. One lie led to another and then to another.

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Speaker 1: I expected to be an hour long, with the judge

438
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Speaker 1: talking most of the time. The defense would talk for

439
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Speaker 1: five minutes, the prosecut would talk for five minutes and

440
00:25:39,359 --> 00:25:41,000
Speaker 1: then get our sentence sing and that would be that.

441
00:25:44,320 --> 00:25:47,760
Speaker 2: The hearing dragged on for over three hours as lawyers

442
00:25:47,760 --> 00:25:51,160
Speaker 2: from both sides spoke about Sam's past and debated how

443
00:25:51,160 --> 00:25:54,560
Speaker 2: he'd spend his future. Sam was just twenty nine years

444
00:25:54,600 --> 00:25:57,600
Speaker 2: old and was facing up to fifteen years in prison.

445
00:25:59,280 --> 00:26:01,960
Speaker 2: Nick wasn't the only Center Tech investor who dialed into

446
00:26:02,000 --> 00:26:04,760
Speaker 2: the hearing. There were a handful of others who shared

447
00:26:04,760 --> 00:26:06,200
Speaker 2: their victim impact statements.

448
00:26:06,800 --> 00:26:10,640
Speaker 1: The statement I remember vividly was the mom who had

449
00:26:10,680 --> 00:26:13,200
Speaker 1: invested most of her kid's college fund.

450
00:26:13,920 --> 00:26:17,919
Speaker 16: Centritech stole from our children, from our retirement, and we

451
00:26:17,960 --> 00:26:22,800
Speaker 16: are incredibly disappointed that we chose to trust, support and

452
00:26:22,920 --> 00:26:26,439
Speaker 16: invest in a startup company, only to be taken advantage of.

453
00:26:27,000 --> 00:26:29,359
Speaker 2: A victim named Lisa, who was a mother of six,

454
00:26:29,480 --> 00:26:31,080
Speaker 2: went off on Sam.

455
00:26:31,280 --> 00:26:34,200
Speaker 16: I have anxiety now, in constant worry over a lack

456
00:26:34,240 --> 00:26:38,040
Speaker 16: of retiring savings, and my husband, who works very hard

457
00:26:38,040 --> 00:26:41,080
Speaker 16: to provide for us, has developed chronic anxiety and he

458
00:26:41,119 --> 00:26:45,879
Speaker 16: struggles with insomnia and depression. It's really despicable and incredibly

459
00:26:45,920 --> 00:26:48,600
Speaker 16: low blow that our family and many other families will

460
00:26:48,680 --> 00:26:50,120
Speaker 16: never recover from.

461
00:26:50,440 --> 00:26:53,440
Speaker 2: One by one, a handful of other Center Tech investors

462
00:26:53,520 --> 00:26:57,680
Speaker 2: unmuted themselves and unleashed their anger. One called Sam a

463
00:26:57,760 --> 00:27:01,480
Speaker 2: con artist, and another set his crime was un American.

464
00:27:02,359 --> 00:27:05,520
Speaker 2: But then things got interesting. There were also a handful

465
00:27:05,560 --> 00:27:10,280
Speaker 2: of victims who spoke during the teleconference praising centri Tech,

466
00:27:11,000 --> 00:27:13,080
Speaker 2: including a guy named George.

467
00:27:13,400 --> 00:27:15,960
Speaker 9: I was delivered everything I was led to believe and

468
00:27:16,160 --> 00:27:18,240
Speaker 9: promised when investing in the ICO.

469
00:27:19,440 --> 00:27:23,600
Speaker 2: Some of these victims sounded more like defense witnesses. Here's

470
00:27:23,640 --> 00:27:26,639
Speaker 2: what another guy from Hong Kong named Tomo had to say.

471
00:27:27,920 --> 00:27:31,440
Speaker 17: I can definitely testify that he was very respectful, hard

472
00:27:31,440 --> 00:27:35,960
Speaker 17: working and delivered on all he promised. I sincerely hope

473
00:27:36,000 --> 00:27:39,160
Speaker 17: Sam Sharma can avoid jail time as much as possible,

474
00:27:39,359 --> 00:27:41,960
Speaker 17: as I believe he has been punished enough already.

475
00:27:42,480 --> 00:27:46,520
Speaker 2: It all highlighted the major issue. Both sides disputed whether

476
00:27:46,600 --> 00:27:51,280
Speaker 2: centri Tech was a legitimate company. For the prosecution, there

477
00:27:51,359 --> 00:27:54,560
Speaker 2: was no dispute.

478
00:27:53,359 --> 00:27:53,840
Speaker 16: Your honor.

479
00:27:53,960 --> 00:27:58,960
Speaker 15: Thousands of investors believing his lives poored approximately thirty six

480
00:27:59,160 --> 00:28:03,199
Speaker 15: million dollars worth of funds into this defendant's hands, and

481
00:28:03,320 --> 00:28:07,840
Speaker 15: immediately he began spending that money, including millions of dollars,

482
00:28:07,880 --> 00:28:11,240
Speaker 15: for his personal use and for his friends and his

483
00:28:11,400 --> 00:28:15,720
Speaker 15: co conspirators. But that was not the end of it.

484
00:28:16,440 --> 00:28:19,480
Speaker 15: Rather than come clean and own up to his lies,

485
00:28:20,040 --> 00:28:24,479
Speaker 15: this defendant doubled down. He lied to his victims, he

486
00:28:24,560 --> 00:28:29,680
Speaker 15: obstructed the SEC's investigation, and then after he was arrested

487
00:28:29,720 --> 00:28:32,199
Speaker 15: in this case, he doubled down again.

488
00:28:33,160 --> 00:28:36,159
Speaker 2: After his arrest in twenty eighteen, Sam was supposed to

489
00:28:36,240 --> 00:28:38,280
Speaker 2: provide the FEDS with a pass code to the account

490
00:28:38,280 --> 00:28:42,440
Speaker 2: that started all the investors' money, but according to court documents,

491
00:28:42,720 --> 00:28:45,120
Speaker 2: Sam gave the FEDS an altered code to the account,

492
00:28:45,560 --> 00:28:49,360
Speaker 2: which of course did not work. A month after his arrest,

493
00:28:49,680 --> 00:28:53,400
Speaker 2: Sam finally came clean to the FBI. The correct passcode

494
00:28:53,440 --> 00:28:55,760
Speaker 2: was taped to the bottom of a silverware drawer at

495
00:28:55,760 --> 00:28:56,280
Speaker 2: his condo.

496
00:28:58,320 --> 00:29:01,600
Speaker 15: Your honor, these are not the actions of a legitimate

497
00:29:01,640 --> 00:29:05,560
Speaker 15: business person with true intentions. These were not, as he

498
00:29:05,600 --> 00:29:11,720
Speaker 15: puts it, mistakes or poor decisions. These were calculated, painstaking,

499
00:29:11,840 --> 00:29:16,320
Speaker 15: and thoroughly fraudulent actions that this defendant took day in

500
00:29:16,480 --> 00:29:19,600
Speaker 15: and day out, over the course of many months to

501
00:29:19,760 --> 00:29:22,440
Speaker 15: carry out and then to cover up his scheme.

502
00:29:23,400 --> 00:29:26,040
Speaker 2: Sam's lawyer asked the court to sentence Sam to thirty

503
00:29:26,040 --> 00:29:28,960
Speaker 2: months in prison, which amounted to two and a half years,

504
00:29:29,280 --> 00:29:33,120
Speaker 2: followed by three years of supervisor release. And then it

505
00:29:33,160 --> 00:29:34,640
Speaker 2: was Sam's turn to speak.

506
00:29:37,400 --> 00:29:40,240
Speaker 6: Your honor, this is the first time that I can

507
00:29:40,320 --> 00:29:44,520
Speaker 6: finally express myself publicly since my arrest, with everything that

508
00:29:44,560 --> 00:29:49,000
Speaker 6: I've had bottled up inside of myself for years. When

509
00:29:49,040 --> 00:29:53,800
Speaker 6: I started Centertech, Your honor, I had a vision of prosperity, happiness,

510
00:29:54,120 --> 00:29:57,240
Speaker 6: and good fortune for everyone involved in Center Tech. For

511
00:29:57,320 --> 00:30:00,480
Speaker 6: the hardship any of them suffered. I'm truly sorry, and

512
00:30:00,520 --> 00:30:02,800
Speaker 6: I pray for a day where there is solitude in

513
00:30:02,840 --> 00:30:06,160
Speaker 6: everyone's life affected by this. I wanted to go with

514
00:30:06,360 --> 00:30:10,640
Speaker 6: the Silicon mentality, build fast, fix later. I wanted to

515
00:30:10,640 --> 00:30:13,360
Speaker 6: fake it till I made it, and I was hoping

516
00:30:13,400 --> 00:30:16,600
Speaker 6: that the ends justified the means. I only cared about

517
00:30:16,600 --> 00:30:19,760
Speaker 6: delivering on the promises and delivering at any cost necessary.

518
00:30:20,400 --> 00:30:23,400
Speaker 2: Build fast, fix later, and fake it till you make it.

519
00:30:23,600 --> 00:30:29,239
Speaker 2: We're familiar refrains throughout Sam's nearly eight minute plea for mercy.

520
00:30:29,880 --> 00:30:32,720
Speaker 6: I needed this wake up call to really put my

521
00:30:32,840 --> 00:30:35,360
Speaker 6: life on the right track and for me to use

522
00:30:35,440 --> 00:30:38,920
Speaker 6: my talents and skills to be a positive member of society.

523
00:30:40,240 --> 00:30:43,160
Speaker 6: I'm working now and I will never need nor want

524
00:30:43,240 --> 00:30:47,200
Speaker 6: to commit any type of bad deed. This has been

525
00:30:47,240 --> 00:30:52,000
Speaker 6: the most frightening experience in my life. Being around murderers,

526
00:30:52,280 --> 00:30:55,480
Speaker 6: rapists and really bad people was the wake up call.

527
00:30:55,560 --> 00:30:59,600
Speaker 6: I needed your honor. I understand that I have to

528
00:30:59,600 --> 00:31:02,440
Speaker 6: go to pri isn't for my actions. Two and a

529
00:31:02,520 --> 00:31:05,200
Speaker 6: half years in prison is going to be extremely difficult

530
00:31:05,240 --> 00:31:10,640
Speaker 6: for myself and my family. Please allow me this punishment

531
00:31:10,800 --> 00:31:14,600
Speaker 6: so that I can go start a family, continue working

532
00:31:14,640 --> 00:31:18,920
Speaker 6: to pay my debts, give back, and continue giving back

533
00:31:18,920 --> 00:31:22,560
Speaker 6: to my community. Thank you for your time, your honor.

534
00:31:23,720 --> 00:31:27,000
Speaker 2: Remember it's a sentencing hearing. There are no jurors or

535
00:31:27,040 --> 00:31:31,400
Speaker 2: closing statements by counsel. Sam is already guilty. All he

536
00:31:31,440 --> 00:31:33,720
Speaker 2: could hope for was the judge would take his statements

537
00:31:33,760 --> 00:31:38,240
Speaker 2: into consideration. Here's what the Honorable Judge Lorna Schofield said

538
00:31:38,280 --> 00:31:38,880
Speaker 2: in response.

539
00:31:39,480 --> 00:31:43,280
Speaker 18: I think the disconnect is and I see it sometimes

540
00:31:43,280 --> 00:31:47,200
Speaker 18: in people who are in this situation. They're so kind

541
00:31:47,400 --> 00:31:51,600
Speaker 18: and caring and generous to people in their immediate circle

542
00:31:52,240 --> 00:31:55,560
Speaker 18: because they are real people to them, they mean something

543
00:31:55,720 --> 00:32:02,000
Speaker 18: to them. But somehow they can't extend that to other people,

544
00:32:02,920 --> 00:32:07,560
Speaker 18: people who are strangers, who become faithless and therefore unimportant,

545
00:32:08,160 --> 00:32:10,480
Speaker 18: And that's something that you need to work on.

546
00:32:11,120 --> 00:32:14,160
Speaker 2: The government sought a sentence of fourteen years, but the

547
00:32:14,200 --> 00:32:16,320
Speaker 2: decision ultimately was up to the judge.

548
00:32:16,600 --> 00:32:18,600
Speaker 18: It is the judgment of the court that you were

549
00:32:18,640 --> 00:32:21,280
Speaker 18: remanded to the custody of the Bureau of Prisons for

550
00:32:21,320 --> 00:32:24,160
Speaker 18: a total of eight years, followed by three years of

551
00:32:24,200 --> 00:32:25,200
Speaker 18: supervised release.

552
00:32:26,400 --> 00:32:28,680
Speaker 2: Sam cried a bit after the ruling and appeared to

553
00:32:28,680 --> 00:32:33,520
Speaker 2: be stunned by his eight year sentence. Others following the

554
00:32:33,520 --> 00:32:38,320
Speaker 2: case reacted as well. Here's Paul Petruzzi, Robert Farcas's attorney.

555
00:32:38,920 --> 00:32:42,120
Speaker 13: I watched Sam's hearing and I was really disappointed. I

556
00:32:42,160 --> 00:32:46,000
Speaker 13: don't think that the judge really saw through the government's

557
00:32:46,000 --> 00:32:47,719
Speaker 13: smoke screen with Sam.

558
00:32:48,040 --> 00:32:51,360
Speaker 19: I think that Sam got a pretty decent sentencing for

559
00:32:51,600 --> 00:32:55,160
Speaker 19: what I've seen the standard to be for white collar crimes.

560
00:32:55,760 --> 00:32:59,920
Speaker 2: That Center investor Jacob Renzel he also shared what he

561
00:33:00,160 --> 00:33:02,880
Speaker 2: say if he had the opportunity to speak to Sam today.

562
00:33:03,160 --> 00:33:04,640
Speaker 19: If I saw him in the bathroom, I'd be like,

563
00:33:04,800 --> 00:33:07,520
Speaker 19: first off, fuck you, You're a piece of shit. And then

564
00:33:07,560 --> 00:33:09,480
Speaker 19: I'd be like, this is not how you cope with

565
00:33:09,480 --> 00:33:12,080
Speaker 19: your problems, and you're fucking other people's lives up.

566
00:33:12,600 --> 00:33:15,920
Speaker 2: Sam Sharma's sentence was one of the harshest punishments received

567
00:33:15,920 --> 00:33:19,400
Speaker 2: by a crypto founder to date. It sent shockwaves through

568
00:33:19,440 --> 00:33:24,520
Speaker 2: the crypto community, but one question loomed large. Where did

569
00:33:24,520 --> 00:33:25,160
Speaker 2: that leave Ray.

570
00:33:25,720 --> 00:33:29,120
Speaker 9: I'd rather go to jail now than have to fucking

571
00:33:29,120 --> 00:33:30,760
Speaker 9: wait another year then go to jail.

572
00:33:31,680 --> 00:33:34,400
Speaker 2: Ray's day and court was coming, but he wouldn't get

573
00:33:34,400 --> 00:33:37,360
Speaker 2: his wish. He'd stand in front of a judge over

574
00:33:37,400 --> 00:33:39,760
Speaker 2: a year after Sam Sharma was sentenced.

575
00:33:40,680 --> 00:33:42,800
Speaker 9: Thank you, your honor for allowing me to address the

576
00:33:42,840 --> 00:33:47,320
Speaker 9: court Today is a very heavy day for me.

577
00:33:48,160 --> 00:33:51,920
Speaker 2: Unlike his partners, Ray was facing one hundred and seventy

578
00:33:52,080 --> 00:33:53,479
Speaker 2: five years in prison.

579
00:33:53,840 --> 00:33:55,480
Speaker 9: I know the things that I have done are wrong,

580
00:33:55,920 --> 00:34:00,400
Speaker 9: and I understand this fraud affected many people's lives. I

581
00:34:00,440 --> 00:34:02,480
Speaker 9: cannot take back the things that I've done, and I

582
00:34:02,520 --> 00:34:04,840
Speaker 9: will forever have to live with the guilt and sorrow.

583
00:34:05,400 --> 00:34:09,479
Speaker 2: Would this fraudsterare my best friend walk out of court

584
00:34:09,480 --> 00:34:12,359
Speaker 2: a freeman or would he be locked up for the

585
00:34:12,360 --> 00:34:16,759
Speaker 2: rest of his life? That's on the season finale of

586
00:34:16,840 --> 00:34:23,680
Speaker 2: Creating a Con. Creating a Con is a production of

587
00:34:23,719 --> 00:34:27,920
Speaker 2: Glass Podcasts, a division of Glass Entertainment Group in partnership

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Speaker 2: with iHeart Podcasts. If you would like to reach out

589
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Speaker 2: to the Creating a Con team, email us at Creating

590
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Speaker 2: a Con at gmail dot com. That's Creating a coen

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Speaker 2: at gmail dot com.

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