GAW Miners CEO Sentenced To Prison

- Advertisement -

September 14, 2018 9:21 PM

Josh Garza gets 21 months for a $9 million fraud.

After pleading guilty to a wire fraud charge in July of last year, Josh Garza, former CEO of GAW Miners, has been sentenced to 21 months of imprisonment, to be followed by three years of supervised release, the first six months of which are to be spent under house arrest. This sentence appears to bring to an end one of the earliest major cryptocurrency enforcement actions.

Garza’s current legal troubles go back to at least December 2015, when the SEC brought a civil action against him. At that time, Paul G. Levenson, director of the SEC’s Boston Regional Office, said, “Garza and his companies cloaked their scheme in technological sophistication and jargon, but the fraud was simple at its core: they sold what they did not own, misrepresented what they were selling, and robbed one investor to pay another.”

The final judgement in the civil case was obtained by the SEC in October 2017, three months after pleading guilty to the wire fraud charge. Garza was ordered to pay over $9 million in restitution and an additional $742,774 in interest.

Garza ran GAW Miners and ZenMiner. Through these companies, Garza sold mining hardware and shares (called “Hashlets”) of profits GawMiner and ZenMiner obtained through their mining efforts. However, the companies did not possess the hash power they claimed, and investors were not paid out of mining currency, but were instead paid from funds Garza received from new investors.

- Advertisement -

Garza also offered a coin called PayCoin. According to the US Attorney’s Office, Garza “stated that the market value of a single PayCoin would not fall below $20 per unit because Garza’s companies had a reserve of $100 million that the companies would use to purchase Paycoins to drive up its price. In fact, no such reserve existed.”

According to CoinMarket Cap, the value of a PayCoin never exceeded $14; they are currently valued at $0.013.

In a letter provided to the court prior to sentencing, Garza wrote:

- Advertisement -

“While the company started with a legitimate purpose, it was not long before the thought of the financial freedom began and ultimately turned into greed. That greed turned in to poor personal and business purchasing decisions [including] large bonuses to myself. I began to make decisions that put my needs before our customers, like making announcements that were not true.”

Garza has been ordered to report to prison in January 2019.

Tim Prentiss is a writer and editor for ETHNews. He has a master’s degree in journalism from the University of Nevada, Reno. He lives in Reno with his daughter. In his spare time he writes songs and disassembles perfectly good electronic devices.

Like what you read? Follow us on X @Bitnewsbot to receive the latest Josh Garza, GAW Miners or other Ethereum law and legislation news.



Previous Articles:

- Advertisement -

Latest

Uniswap (UNI) Rebounds Above $6 After Brief Uptrend Breakdown

Uniswap's UNI token dropped below its key uptrend line following a failed hold above the $6.00 support level.High trading volumes accompanied the decline, including...

Michael Saylor Invites Joe Rogan to Discuss Bitcoin on Podcast

Michael Saylor has shown interest in discussing Bitcoin on The Joe Rogan Experience podcast.The idea has generated excitement in the Bitcoin community, with some...

Congress Debates Stablecoin Bill Amid Rising Bank and Crypto Tensions

U.S. lawmakers are moving forward with the Senate Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act, with debates set to resume after...

American Engineer Drugged, Robbed in Sophisticated London Crypto Heist

An American software engineer lost approximately $123,000 in cryptocurrency after being drugged and robbed in London.The victim was targeted by an impersonator posing as...

Max Keiser Doubts New Bitcoin Treasuries’ Discipline in Bear Market

Bitcoin-focused companies are increasingly copying the treasury strategy used by Michael Saylor's Strategy.Max Keiser raised doubts about whether these newer companies can maintain commitment...

Must Read

10 Best Bitcoin Debit Cards

You are reading this post because you want to get your hands on the best bitcoin debit card - right? Well, we got you covered. We...