Homero Garza to serve time for $9M cryptocurrency mining fraud
The court district of Connecticut has sentenced Homero Joshua Garza to 21 months in prison and three years of supervised release for $9 million in cryptocurrency mining fraud. He owned and operated GAW, GAW Miners and ZenMiner, according to a report by Ellington Patch.
Garza's companies sold more hashlets than they could support in their data centers. He also falsely claimed that GAW Miners' parent company purchased a stake in ZenMiner for $8 million, even though there was no transaction.
Garza also claimed that Paycoin, a virtual currency created by his companies, would never fall in value below $20 because the companies held a reserve of $100 million to purchase Paycoins and drive up prices. There was never any reserve, according to John H Durham, a U.S. attorney for the District of Connecticut.
The court has ordered Garza to pay restitution for the $9 million he allegedly defrauded from investors.