Homero Joshua Garza, a 33-year old Texas resident, has been sentenced to 21 months in prison, three years of supervised release, plus restitution in the amount of $9,182,000 for orchestrating a fraudulent cryptoassets mining scheme worth $9 million, according to a Finance Magnates report on September 14, 2018.
Another Cryptocriminal Goes Down
Per sources close to the matter, Homero Joshua Garza allegedly ran four scam cryptocurrency mining companies between 2014 to 2016: GAW, GAW miners, ZenMiner, and ZenCloud.
Garza used the four companies to sell crypto mining machines, the company’s PayCoin scamcoin and ‘hashlets’ – which basically entitles an investor to earn a share of the profits from the firm’s mining operations.
PayCoin was developed by GAW Miner coders in 2014. The scamcoin was built upon the SHA-256 algorithm and used both proof-of-work (POW) and proof-of-stake (POS) algorithms at the time.
However, Garza allegedly sold far more hashlets than the crypto mining capacity of GAW miners, and once he noticed things were falling apart, Joshua Garza started fabricating various lies to attract more investors and would use older participants’ money to pay new converts.
He also claimed the companies had a $100 million reserve that would cushion the price of PayCoin from falling below $20 per coin.
That’s not all, Garza deceived his clients into believing that GAW miners had purchased an $8 million stake in ZenMiner and that ZenMiner had become an arm of GAW.
End of the Road
It’s worth noting that the lawsuit against Joshua Garza and his firm has been ongoing since 2016.
The two-year-old court case finally came to an end this week when the Hartford federal court sentenced him to 21 months in prison instead of the usual 20-year term.
Garza has also been ordered to pay restitution amount of approximately $9.2 million; three years supervised release of which the first six months must be spent under house arrest.
Garza is expected to begin his jail term from January 4, 2018.
Due to the seemingly unregulated nature of the cryptospace, coupled with the fact that most investors feel lazy conducting adequate research on the crypto-based investment scheme they are interested in, bad actors have wreaked havoc on many gullible people.
On August 20, 2018, Blockchain Reporter informed that the head of the Asian arm of the infamous $2.4 billion bitcoin Ponzi scheme, Bitconnect had been arrested at a Delhi airport on his way back from Dubai.