Inexperienced co-founders, a non-existent product, and a mysterious CEO who seems to be MIA — what could possibly go wrong? Bitconned, the new documentary from director Bryan Storkel (The Pez Outlaw), goesinside the cryptocurrency craze of the late 2010s and unravels the story of Centra Tech, a crypto company dreamt up by a couple of South Florida hustlers with a knack for Photoshop and a penchant for living large.
“Crypto [was] just this new unfound territory, completely unregulated by the SEC,” explains Centra co-founder Ray Trapani in the doc. “Anytime you find a market like that, you just have to figure out how to exploit [it].”
Trapani and his cohorts managed to successfully do just that for a time, raising millions of unregulated fundraising dollars along the way. But when a New York Times reporter — and eventually, the authorities — dared to start asking questions, Centra’s web of lies unraveled. Using original interviews with Trapani, his family, and his co-conspirators, as well as a victim who poured money into Centra and the investigators who eventually brought the company’s malfeasance to light, Bitconned shines a light on just how easy it can be to create the illusion of a legitimate enterprise. After all, what is a scam if not an entrepreneurial venture situated firmly on the wrong side of the law?
Who is Ray Trapani?
A self-described scammer, Trapani says in Bitconned that he’s always been drawn to illegal activity. “Ever since I was a kid, I always wanted to be a criminal,” he says in the doc. “It was never like, ‘I’m gonna be a doctor,’ or ‘I’m gonna be a scientist.’ If I could have put it in my yearbook, I would have put: ‘I wanna be a criminal.’ ”
In Bitconned, Trapani says his first adolescent attempt at achieving his dream involved using a stolen prescription pad to obtain drugs, which he and his friends could then sell at a premium. When that scheme went belly-up, he partnered with two former classmates on a legitimate business: renting out exotic and luxury vehicles to Miami’s wealthiest clientele. Rampant spending and shady business expenditures threatened the future of the company, and spiraling debt and depression eventually led Trapani to try to take his own life. When Sam “Sorbee” Sharma, a high school classmate and one of his car rental cohorts, tipped him off to the incredible potential of the booming cryptocurrency market, Trapani saw a golden opportunity to earn back the money he needed to pay off his loans — and then some. Thus, Centra Tech was born.
What is Centra Tech?
In 2017, Trapani and Sharma launched Centra Tech, which purported to be raising funds through an initial coin offering (ICO) for a cryptocurrency called Centra. Centra, like other cryptocurrencies — including Bitcoin, Ether, and Dogecoin, is a kind of digital currency whose transactions are conducted through a decentralized system, i.e., without relying on any bank or government. In addition to the currency itself, Centra Tech also claimed that it was in the process of creating an actual debit card that would easily allow users to spend Centra and several other virtual currencies in real time.
“Centra was the archetype of what was wrong with cryptocurrency,” Nathaniel Popper, the New York Times journalist who eventually exposed Centra’s fraudulent claims, says in the doc. “In a sense, Centra was the story of crypto itself, which is an endeavor that has something real underneath it, but keeps failing… and yet people keep coming back to it.”
According to the Centra Tech website, the company’s proposed debit card would be run on the Visa network, and the brain trust behind the project was well-versed in the worlds of business and finance: The executive team boasted Ivy League degrees and years of experience working for established financial institutions.
The only problem? None of these details were true.
“We didn’t know anything about this fucking business,” Trapani explains in the documentary. “But it didn’t matter at all. …. We lied, we cheated, we made millions of dollars.”
In 2017, an unprecedented number of new cryptocurrencies began pitching themselves directly to investors with ICOs, a sort of unregulated form of crowdfunding.
“During the ICO boom, you had people doing these serious projects — kids with PhDs from Stanford, from MIT — at the same time as you had these kids who were agents at rental car companies in Miami who were raising the exact same amount of money as the PhDs from MIT — without any experience,” Popper explains.
What happened to Ray Trapani and Centra Tech?
As ICO money rolled in, the Centra Tech team acquired big-name celebrity endorsements from the likes of Floyd Mayweather Jr. and DJ Khaled, which only increased its popularity among investors. When Popper began working on a story about celebrity crypto endorsements, he contacted Centra to discuss its A-list ambassadors and found that something about the business wasn’t quite right. Flattered by the attention from the newspaper of record, Trapani agreed to an interview and invited a Times photographer to visit Centra’s new offices.
Under intensified scrutiny, the cracks in Centra’s foundational promises began to show, especially when investors and reporters began to ask more questions about Michael Edwards, the company’s CEO. Billing him as a financial industry veteran, original money man, and ghost investor more content to work behind the scenes than speak directly to the press, Centra announced that Edwards had died tragically in a car accident and a new CEO had been appointed: Trapani’s grandfather.
When Popper’s story went to press and the world saw Centra’s discrepancies in print, it wasn’t long before the authorities came knocking. The Securities and Exchange Commission brought a complaint against Centra, at which point the money began to evaporate and the company’s biggest players — Trapani, Sharma, and alleged stripper turned CFO Robert Farkas — were eventually convicted of several crimes. Sharma pled guilty to conspiring to commit securities fraud, wire fraud, and mail fraud, and is still serving his eight-year sentence. Farkas pled guilty to conspiring to commit securities fraud and wire fraud. He served a year in prison and was released. Trapani, who cooperated with federal authorities and pleaded guilty to 10 counts, including securities fraud and wire fraud, was sentenced to time served.
Watch Bitconned on Netflix now.
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