The infamous Josh Garza — CEO of the now-defunct Gaw Miners — has pleaded guilty to wire fraud related to PayCoin, his company’s digital currency.
Josh Garza the PayCoin Scammer Brought to Justice
The US Department of Justice (DOJ) reported the plea this afternoon, saying that Garza waived his right to indictment and pleaded guilty to the wire fraud charge against him in a Hartford, Connecticut federal courthouse.
According to the DOJ, the fraud committed by Garza resulted in a loss of $9,182,000 from victims.
Between May 2014 and January 2016, Garza, GAW Miners and its associated companies scammed the cryptocurrency community through their PayCoin digital currency project. In addition to the PayCoin scam, the companies operated a cloud mining scheme — called “Hashlets” — that they claimed would guarantee a share of profits generated from the mining operation.
During that time, the DOJ reported, Garza made false and misleading statements in order to maintain the public’s confidence.
One of the more controversial of thsoe statements was the $20 price floor promise. In this instance, Garza promised that GAW would never let the PayCoin value sink below $20 per coin.
Shortly after he publicly made that promise, PayCoin dropped to $20 and below, and GAW made no effort to shore up the coin’s value.
Eventually — after several months of skepticism from the cryptocurrency community — the PayCoin value fell to a point where traders considered the digital currency defunct. People who had bought in to the coin’s presale at inflated prices had been cheated out of their money, and GAW was nowhere to be found.
Quietly closing down their corporate headquarters, GAW disappeared, along with Josh Garza, and many feared he would never be brought to justice.
Garza, the DOJ reported, is scheduled for sentencing by US district judge Robert N. Chatigny on October 12, 2017. He faces a maximum sentence of 20 years in prison.
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Images via Imgur, Archive.fo