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Bloomfield cryptocurrency entrepreneur gets 21 months in prison

BY Matt Pilon

9/13/2018
PHOTO | Contributed
PHOTO | Contributed
Homero Joshua Garza.
The former CEO of a now-defunct Bloomfield-based cryptocurrency company, Gaw Miners, was sentenced Thursday in Hartford federal court to 21 months in prison for defrauding investors.

Homero Joshua Garza originally faced up to 20 years in prison for his guilty plea last July on a wire fraud charge related to the creation and sale of a cryptocurrency called PayCoin.

Prosecutors say he ran an approximately nine-month scheme that damaged investors to the tune of $9.2 million -- an amount Judge Robert Chatigny ordered Garza to repay as restitution.

Another Connecticut judge levied a $9.9 million civil judgement against Garza last year.

When he is freed in 2021, Garza will have three years of supervised release, including six months spent in home confinement.

Gaw Miners and associated companies ZenMiner and ZenCloud sold "hashlets" to investors -- which were essentially the right to profit from a slice of the companies' virtual currency mining operation, but prosecutors say they sold more hashlets than they had computing power to cover.

Gaw also lied to investors about the company purchasing an $8 million stake in ZenMiner and guaranteed a $20 floor price for PayCoin on the basis that the companies had a $100 million reserve at their disposal to keep the price afloat, when they in fact did not, according to authorities.

Garza will report to prison on Jan. 4, 2019.