Raymond Trapani

Full Report

Key Points

• Centra Tech Fraud: Raymond Trapani co-founded Centra Tech, a cryptocurrency company that defrauded investors of over $25 million through a fraudulent Initial Coin Offering (ICO) in 2017, misleading investors with false claims about partnerships and technology.

• Legal Outcome: Trapani pleaded guilty to 10 counts, including securities and wire fraud, but avoided prison through “extraordinary” cooperation with authorities, receiving time served and three years of supervised release.

• Background and Motivation: Trapani’s criminal behavior began in his teenage years, driven by a troubled childhood involving alleged sexual abuse and drug addiction, which he cites as shaping his pursuit of wealth through illicit means.

• Post-Scam Activities: Trapani claims to have reformed, working as a substance abuse counselor and starting a new loan business, Cambridge & Brown, though concerns remain about its high-interest rates.

• Crypto Industry Critique: Trapani asserts that fraud is pervasive in the cryptocurrency sector, estimating 95% of the industry involves fraudulent activities, a view supported by his own experiences.

Overview

Raymond Trapani, also known as Ray Trapani, is a former co-founder and COO of Centra Tech, Inc., a Miami-based cryptocurrency company launched in 2017 alongside co-founders Sohrab “Sam” Sharma and Robert Farkas. Centra Tech marketed a cryptocurrency called Centra and a purported debit card, the “Centra Card,” which claimed to allow users to spend cryptocurrencies at establishments accepting Visa or Mastercard. The company raised over $25 million through an ICO, but it was later exposed as a fraudulent scheme involving fabricated executive profiles, fake partnerships, and misleading marketing. Trapani, who has a history of criminal activity starting from his teenage years, including drug dealing and pharmacy scams, leveraged the unregulated crypto market to execute this high-profile fraud. After his arrest in 2018, Trapani cooperated with federal authorities, avoiding prison time. He now claims to have turned his life around, working as a certified substance abuse counselor and planning a new venture, Cambridge & Brown, focused on high-interest loans. He has also appeared in media, including the Netflix documentary Bitconned and the podcast Creating a Con, to discuss his past and the broader crypto industry’s vulnerabilities.

Allegations and Concerns

• Securities and Wire Fraud: Trapani, along with Sharma and Farkas, was charged by the U.S. Securities and Exchange Commission (SEC) and federal authorities in April 2018 for orchestrating a fraudulent ICO. The SEC alleged they created “fictional executives with impressive biographies,” fabricated partnerships with Visa and Mastercard, and used misleading marketing to deceive investors.

• Misrepresentation of Product: Centra Tech falsely claimed to have developed a functional debit card for cryptocurrency transactions, which was not operational at the time of the ICO. Trapani later admitted to initial lies but claimed the product was developed by the time of their arrest.

• Celebrity Endorsements: The company paid celebrities like DJ Khaled, Floyd Mayweather, and Paris Hilton to promote Centra Tech, misleading investors about the company’s legitimacy.

• Manipulation and Deception: Text messages revealed Trapani’s intent to create false documents, with one instance showing him instructing Sharma to “cook me up” a fake document, highlighting deliberate deceit.

• Lack of Accountability: Critics, including investors and media, expressed outrage over Trapani’s lenient sentence, arguing it failed to deliver justice for the $25 million lost by investors, none of whom had been fully reimbursed as of August 2023.

Customer Feedback

• Negative Feedback:

  • Investors who lost money in the Centra Tech scam expressed significant anger, particularly over Trapani’s lack of prison time. One investor, quoted in Bitconned, stated, “There are always going to be the people that hate me because people lost money. And I agree with their stance on that.”

  • Social media reactions to Bitconned highlighted shock and frustration, with one X user noting, “Ray said he aspired to be a criminal ever since he was young & he stands on that😂😁 This level of honesty is scary & surprising at the same time..😳😱.”

• Positive Feedback:

  • Some viewers of Bitconned found Trapani’s candidness compelling, with one review praising the documentary for letting “viewers form their own opinions” without heavy editorializing.

  • Trapani’s podcast co-host, Jonny B Good, portrays him as reformed, emphasizing his cooperation with authorities and personal growth through therapy and family life.

• Mixed Sentiment: While Trapani’s openness about his past garners some respect for his honesty, the overwhelming sentiment from affected investors and observers is negative, focusing on the financial harm caused and his perceived lack of accountability.

Risk Considerations

• Financial Risks: Trapani’s new venture, Cambridge & Brown, plans to offer loans at 50% interest rates, which raises concerns about predatory lending practices and potential exploitation of vulnerable borrowers.

• Reputational Risks: Trapani’s public persona as a convicted fraudster, coupled with his boastful attitude in Bitconned (e.g., “It was just too easy to do”), undermines his credibility and may deter trust in his new business endeavors.

• Legal Risks: Although Trapani avoided prison, he remains under three years of supervised release and is obligated to pay nearly $3 million in fines, which could strain his financial stability and lead to further legal scrutiny if not fulfilled.

• Industry Risks: Trapani’s claim that 95% of the crypto industry is fraudulent suggests ongoing vulnerabilities in the sector, potentially implicating any future crypto-related ventures he may pursue.

• Personal Risks: Trapani’s history of drug addiction and self-reported mental health struggles, including depression and suicidal thoughts, pose risks to his stability and decision-making in business ventures.

Business Relations and Associations

• Centra Tech Co-Founders:

  • Sohrab “Sam” Sharma: Co-founder and primary leader of Centra Tech, currently serving an eight-year prison sentence for his role in the scam.

  • Robert Farkas: Co-founder and CFO, served one year in prison and was released.

• Celebrity Endorsers: DJ Khaled, Floyd Mayweather, and Paris Hilton were paid to promote Centra Tech, though they were unaware of the fraudulent nature of the company.

• Media Collaborations:

  • Bryan Storkel: Director of Bitconned, who worked closely with Trapani to document the Centra Tech scam.

  • Jonny B Good: Co-host of the Creating a Con podcast, providing a platform for Trapani to share his story and views on crypto fraud.

• New Venture: Trapani’s planned company, Cambridge & Brown, is not yet operational, and no specific partnerships have been disclosed.

Legal and Financial Concerns

• Legal Actions:

  • SEC and Criminal Charges (2018): Trapani was charged with securities fraud, wire fraud, conspiracy to commit securities fraud, and conspiracy to commit wire fraud. He pleaded guilty to 10 counts but received time served due to cooperation with the FBI.

  • Supervised Release: Sentenced to three years of supervised release, running concurrently on all counts, starting in April 2022.

  • Fines: Ordered to pay nearly $3 million in restitution to victims, a significant financial burden that remains ongoing.

• Financial Status:

  • Centra Tech Losses: Investors lost over $25 million, with the U.S. Marshals Service recovering approximately $33.4 million in seized Ether to reimburse victims, though full repayment has not been achieved.

  • Personal Finances: Trapani claims to have no hidden wealth from the scam, stating his current home was purchased with help from family and a mortgage.

• Bankruptcy Records: No public records indicate personal bankruptcy, though his previous venture, Miami Exotics, went bankrupt due to reckless spending.

Risk Assessment Table

Raymond Trapani’s story, as detailed in Bitconned and his media appearances, reveals a complex individual driven by a troubled past and a desire for wealth, exploiting the unregulated cryptocurrency market to perpetrate a significant fraud. His cooperation with authorities and claims of personal reform—evidenced by his work as a substance abuse counselor and family life—suggest a potential for redemption. However, his history of deceit, lack of remorse in early interviews, and plans for a high-interest loan business raise serious concerns about his trustworthiness and ethical business practices.

Cautionary Advice: Investors, business partners, and consumers should approach Trapani with extreme caution. His history of fraud, combined with his new venture’s questionable ethics, suggests a high risk of future misconduct. Those considering engagement with Cambridge & Brown should demand transparency, verify regulatory compliance, and seek independent financial advice. Regulators should monitor Trapani’s activities closely, given his past and the crypto industry’s ongoing vulnerabilities. For the public, Trapani’s story underscores the need for due diligence in crypto investments, particularly in unregulated markets.