Homero Joshua (Josh) Garza, the chief executive officer of fraudulent bitcoin mining operation GAW Miners that made headlines in 2015, today was been jailed for 21 months over his role in the scam.

Garza was accused of perpetrating 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.

The sentence includes six months of home confinement and three years of supervised release overall, according to Coindesk. It comes on top of a fine of $9.18 million plus prejudgment interest of $742,774 imposed on Garza in October last year.

Garza’s fraud was the first big scam in the period after the collapse of Mt. Gox as the cryptocurrency market started to heat up, leading to the massive boom in 2017. The SEC charged the two companies and Garza for operating a Ponzi scheme in December 2015, the culmination of an investigation that started that January.

“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 U.S. Securities and Exchange Commission said at the time. “As alleged in our complaint, 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.”

Garza, for a time, was highly influential in the cryptocurrency business, even going as far as acquiring the BTC.com site for $1 million.

Pioneering scams to come, one of Garza’s offerings was Paycoin, a cryptocurrency that was pitched as a semistablecoin complete with a “guaranteed” price floor of $20. Like many token and coin scams to come, Paycoin turned into a pump-and-dump scheme and the price floor wasn’t worth the computer it was typed on.

While Garza’s sentencing may be seen as justice served, not everyone is happy. Coin Journal described it as a case of Garza getting off lightly, particularly given that he was facing up to 20 years in prison for each of his infractions.

Photo: Josh Garza