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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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The average income of the modern teenager is about 2 a.m.
(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?