Submitted via IRC for SoyCow1984
A man who, according to federal authorities, ran a fake cryptocurrency Ponzi scheme and pleaded guilty last year to one count of wire fraud is now headed to prison.
On Thursday, Homero Joshua Garza, also known as Josh Garza, has now been sentenced by a federal judge in Hartford, Connecticut, to 21 months in prison, three years of supervised release, and more than $9 million in restitution. The news was first reported Thursday by CoinDesk.
In their sentencing memorandum filed before the hearing, prosecutors were blunt in their assessment of Garza, saying that he "lied to investors and customers and took their money" to the tune of $9 million in losses spread across thousands of people worldwide.
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Fake-Cryptocurrency Ponzi Scheme Lands Creator in Prison
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(Score: 0) by Anonymous Coward on Sunday September 16 2018, @04:16PM (5 children)
This is great news! Bitcoin is clearly a ponzi scheme.
(Score: 0) by Anonymous Coward on Sunday September 16 2018, @04:47PM (3 children)
I do not think it means what you think it means.
That being said, I'm not defending Bitcoin's virtues.
(Score: 1, Insightful) by Anonymous Coward on Monday September 17 2018, @12:17AM (2 children)
Bitcoin is form of fraud which pays profits earlier investors using funds obtained from newer investors.
(Score: 0) by Anonymous Coward on Monday September 17 2018, @12:47AM (1 child)
You're not understanding supply/demand.
You're not understanding wealth creation.
In general, you're not thinking very deeply about this; you're merely falling prey to naive (and erroneous) pattern matching.
(Score: 1, Interesting) by Anonymous Coward on Monday September 17 2018, @01:07AM
Capitalism is a Ponzi scheme. You're both right, just at different scales of thinking.
(Score: 0) by Anonymous Coward on Monday September 17 2018, @11:55AM
This one was fake ponzi scheme, bitcoin is the real deal. How he dare to lure people into a fake scheme. Well deserved jail time.
(Score: 4, Insightful) by RandomFactor on Sunday September 16 2018, @04:59PM (4 children)
This strikes me as odd, you can be forced to appear under oath and under legal threat by the government and if you can't afford a council it is just too bad?
In no way defending these guys, but I think the brother has an actual point here.
Maybe some legal types have more perspective on this?
В «Правде» нет известий, в «Известиях» нет правды
(Score: 0) by Anonymous Coward on Sunday September 16 2018, @05:12PM (1 child)
same thing with speeding laws, at least in my state. they make speeding a criminal offense but don't provide a public defender(maybe because they know they are holding traffic court illegally to begin with, but that's another matter.) and private attorneys won't bother with traffic cases, unless maybe you're in a large city where they can appear for several clients in one day or something. so, you are left without representation. judges, DA's and cops are just criminals in costumes.
(Score: 4, Interesting) by PartTimeZombie on Sunday September 16 2018, @09:12PM
If my sister gets a speed camera ticket, she always writes back to say she intends pleading not guilty, and could they please send her the maintenance records for the camera they used so that she can pass it on to her lawyer.
100% of the time they withdraw the charge.
Not in the US, so that might not be of any use to you, but it is interesting.
(Score: 3, Insightful) by zocalo on Sunday September 16 2018, @05:32PM
I don't doubt that the SEC lawyers are correct in their assertion, nor am I defending the Garza's, but have to agree that this seems like a particularly nasty legal gotcha for someone to be in. Maybe if you have no real association with the accused that wouldn't be a problem - no different from being called to give evidence in any other trial - but given that were are talking about an immediate family member and given the level of jailtime and financial restitution that can clearly result, it does seem particularly harsh.
UNIX? They're not even circumcised! Savages!
(Score: 2) by bzipitidoo on Sunday September 16 2018, @11:31PM
Is this a civil case, or a criminal case? I thought a basic distinction is that prison is not a factor in civil cases. If found guilty, the perps can be fined, put under a restraining order, and things of that sort, but not imprisoned.
However, fraud and theft are criminal matters. Anyone who tries a Ponzi scheme is breaking criminal law. That's what these Paycoin bandits did. I'm guessing the original complaint was a civil one, which was not satisfactorily addressed. It may have boiled down to "sorry to imply you might not know what you're doing (or could even be (gasp!) white collar criminals), but show how this particular cryptocurrency is not a Ponzi scheme". Had they come clean then, possibly the whole thing could have been stopped before any investors were hurt, and they would get off with a wrist slapping. It was basically a warning, and a snare for criminals. Probably they had to make statements on the record, about things that couldn't be shown at that time, but could and would be checked later when there was a track record. And if those things turned out not to be true, they would be guilty of criminal fraud. They gave the SEC a load of crap, and kept on running their scheme, possibly with minor changes. They may have danced this dance several times, and each time the net got tighter. Then it finally caught up with them.
They tried to play stupid. But, you know, lots of criminals try that angle.
Whenever there's lots of money, the roaches swarm out of the woodwork. Cryptocurrencies are the big fad in white collar criminal circles this decade. Last decade it was home mortgages. Next decade, who knows?
(Score: 1, Insightful) by Anonymous Coward on Sunday September 16 2018, @05:01PM (1 child)
now go get every banker and throw their asses in a hole. or are you just mercenaries? they run a con every day with the blessing from the rest of the thieves in government. when you are allowed to print money, and devalue the currency you loaned to people, while you charge them interest on the loan, you are engaged in theft.
(Score: 3, Interesting) by Runaway1956 on Sunday September 16 2018, @11:23PM
Well, let's just try to pretend that the Federal Reserve isn't a scam to begin with. If we were to suppose that bankers weren't thieves by definition, then WTF did we bail them out when they crashed? I mean - we agreed for a moment that they weren't thieves by definition, right? But, they still managed to steal billions in bailout money - and to appropriate huge parts of that for "bonuses" for the crookedest among them.
Every bank in danger of failing should have been allowed to fail. Every single one of them.
(Score: 3, Insightful) by Thexalon on Monday September 17 2018, @01:43AM (3 children)
1. The guy in question was convicted not of mining cryptocurrency, but of pretending to mine cryptocurrency while in fact doing no such thing.
2. Bitcoin isn't a Ponzi scheme. It's a different kind of scam akin to Tom Sawyer's fence-whitewashing operation: "He had discovered a great law of human action, without knowing it – namely, that in order to make a man or a boy covet a thing, it is only necessary to make the thing difficult to attain." Bitcoins have value to Bitcoin believers because there was substantial expense in obtaining them (either by purchase or mining).
The only thing that stops a bad guy with a compiler is a good guy with a compiler.
(Score: 2) by FatPhil on Monday September 17 2018, @08:09AM (2 children)
Great minds discuss ideas; average minds discuss events; small minds discuss people; the smallest discuss themselves
(Score: 2) by All Your Lawn Are Belong To Us on Monday September 17 2018, @06:23PM (1 child)
How is that any different from any other form of investment?
That's not a flame attempt. All investing is done on the premise that what is being invested in will carry greater future value. Is Bitcoin different because there is no apparent intrinsic value to it and no governmental authority declaring it has fiat value? Or some other quality that differs Bitcoin from, say, gold?
This sig for rent.
(Score: 2) by Thexalon on Tuesday September 18 2018, @01:48AM
Yes, there are differences.
Regarding the "intrinsic value" issue: Bitcoins have a cost to obtain, via mining or purchase. Bitcoin believers think this gives them intrinsic value, but they are wrong about that, because the Bitcoins don't have any useful application - you can't use them to make anything. By contrast, gold you can use it to make things like jewelry that won't tarnish easily, and electronics.
Regarding the "government authority" issue: Fiat currency is required to pay taxes, and is also considered a legal offer of payment of debt. In both cases, anyone doubting those factors can expect a visit from people with guns to explain matters to them. Bitcoins, not being fiat currency, don't have the organized group of people with guns backing them up.
The only thing that stops a bad guy with a compiler is a good guy with a compiler.