GAW Miners boss gets 21 months in jail after Ponzi plea bargain

September 14, 2018
Chris Wheal

Homero Joshua Garza, chief executive of GAW Miners, has been sentenced to 21 months in prison for fraud by a federal court in Hartford, Connecticut.

Garza had pleaded guilty to a wire fraud charge in July 2017 after using his now-defunct company to front a scam crypto token called PayCoin.

Saved from 20-year incarceration

He could have been facing a 20-year sentence, but his plea bargain means he will serve less than two years behind bars, followed by six months of home detention as part of a three-year supervised release.

GAW Miners was a crypto mining operation that claimed some success until the lauch of a token that represented hash power on the bitcoin network – that many claim didn’t exist.

The launch of PayCoin was widely reported but it quickly fell apart as claimed partnerships with the likes of Visa, Mastercard, Amazon and Target were strenuously denied by those companies.

Ponzi detected

Eventually it was apparent the whole enterprise was a Ponzi scheme when the Securities and Exchange Commission determined that GAW had sold more contracts for hashing power than it was able to control. At this point the FBI were called in to investigate.

The court also ruled that Garza must compensate investors, repaying a $9.2m restitution – estimated as the amount of financial damage caused by the scam.

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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