US Court Sentenced Crypto Company Director to 21 Months in Prison
Joshua Homero Garza, GAW miners director, has been sentenced to 21 months in prison, along with an order to pay $9,187,000 in restitution and three years of supervised release after serving his sentence by the Court of Hartford, Connecticut, CoinJournal reports.
The judge has covered fraud cases in the past, though this appears to be his first major case relating to cryptocurrencies. He and all parties involved spoke of Paycoin as an ICO and how this case could set precedent for future cases involving ICOs.
Garza was facing up to 20 years of prison for each of his infractions, technically enough to send him away for the rest of his life. That was always unlikely, however, and Garza agreed to a plea deal in order to get the sentence down. The plea deal included recommendations for the sentence and as expected the judge stayed within those guidelines.
The accusations against GAW Miners and ZenMiner were made in 2015. The company was pretending to mine Bitcoins whereas in fact it was just running a Ponzi scheme.
Joshua Homero Garza was the owner of both companies. By 2014 they had started to lose ground and began a cloud mining scheme that now appears to have been fraudulent. Near the end, he launched his own cryptocurrency called Paycoin. It promised partnerships with major retailers and a $20 price floor. None of that materialized and the currency’s value dropped like a rock.
The SEC also previously received a final judgement against GAW Miners and Zen Miners, both Garza owned companies, to the tune of $11 million. In addition, GAW Miners and Zen Miner will have to pay $1 million civil penalty.