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GAW Miners CEO Garza pleads guilty to $9M fraud scheme

Homero Joshua Garza, founder of GAW Miners and ZenMiner, pleaded guilty in Hartford federal court to one count of wire fraud related to his role in his companies’ purported generation and sale of virtual currency.

According to the US Department of Justice, Garza defrauded victims through his companies in connection with the procurement of virtual currency on their behalf between May 2014 and January 2016. In order to attract potential customers, Garza made multiple false statements, including that GAW Miners’ parent company purchased a controlling stake in ZenMiner for $8 million and that ZenMiner became a division of GAW Miners.

The Justice Department also noted Garza’s “hashlet” scheme, which entitled an investor to a share of the profits that GAW Miners or ZenMiner would purportedly earn by mining virtual currencies using the computers that were maintained in their data centers.

“In fact, GARZA’s companies sold more hashlets than was supported by the computing power maintained in their data centers”, it added.

The total loss attributed to Garza’s fraudulent scheme is estimated at $9,182,000. He is scheduled to be sentenced on October 12, 2017, and faces a maximum term of imprisonment of 20 years.

The Securities and Exchange Commission had also charged Garza and his companies with conducting a Ponzi scheme in December 2015. Last month, the U.S. District Court for the District of Connecticut entered a final default judgment against GAW Miners and ZenMiner, in the case.

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