By PoliceOne Staff
BLOOMFIELD, Conn. — Homero Joshua Garza will spend 21 months in prison followed by three years of supervised release after pleading guilty of scamming over $9 million from businesses.
Between 2014 and 2015, Garza sold bitcoin-mining hardware, offered shares in a virtual currency mining operations and created and sold virtual currency called PayCoin to several Connecticut-based businesses, the FBI reports. Through a series of misleading and false statements about his company, financial backing and partnerships, Garza fraudulently drew investors into his enterprises, resorting to a Ponzi-scheme tactic to delay fraud detection.
“Garza got into this market at the right time,” said Special Agent Mark Munster, who investigated the case. “The interest and enthusiasm for these currencies was high, and he was able to market himself and the business very effectively. The problem was that much of what Garza was marketing was a lie.”
The FBI became aware of Garza’s schemes through the Security and Exchange (SEC) Commission who issued a complaint against him and his companies in 2015. The SEC conducted an investigation and obtained a court-issued injunction against Garza and his businesses. Garza had not only violated civil security laws, but criminal laws as well, prompting the FBI to initiate an investigation.
“We relied heavily on the extensive analysis by the SEC,” said Munster. “Then it was a matter of interviewing employees and other investors and following the money trail—looking at what was brought in and what was spent, what was real and what was invented.”
Garza has also been ordered to pay restitution to his victims.