In the final chapter of a long-running prosecution, Homero Joshua (Josh) Garza, the chief executive officer of fraudulent bitcoin mining operation GAW Miners, has been fined $9.18 million plus prejudgment interest of $742,774 for his role in the scam.

The judgment, handed down by a federal judge in Connecticut on Tuesday, came as a result of the Securities and Exchange Commission applying for a default judgment in February 2016. The court had previously approved a default judgment of $11.38 million against GAW Miners and related entity ZenMiner in June.

Garza was accused and charged in February 2015 of having perpetrated fraud through GAW Miners and ZenMiner by offering shares in an alleged digital bitcoin mining operation while never having enough computing power for the mining it promised to conduct.

“Garza and his companies cloaked their scheme in technological sophistication and jargon, but the fraud was simple at its core: They sold what they did not own, misrepresented what they were selling and robbed one investor to pay another,” the commission said at the time. “Most investors paid for a share of computing power that never existed … Returns paid to some investors came from proceeds generated from sales to other investors.”

The GAW Miners and ZenMiner scams are believed to have sucked in more than 10,000 investors, with most never recovering the full amount of their investments.

The successful conclusion of the long-running case comes less than a week after the SEC filed charges against an operator of two dubious initial coin offerings promoting coins linked to diamonds and real estate. In that case, Maksim Zaslavskiy is alleged to have been selling digital tokens or coins for a product that doesn’t actually exist in a similar fashion to the way Garza was selling nonexistent bitcoin mining services.

Photo: Josh Garza