Controversial cryptocurrency executive Josh Garza has pleaded guilty to one count of wire fraud.
As reported by CoinDesk earlier this week, Garza was rumored to have been preparing the plea, one for charges that stem from his operation of four cryptocurrency companies, GAW, GAW Miners, ZenMiner and ZenCloud, all of which were long suspected of fraudulent activities.
In total, the loss attributed to Garza’s fraud was estimated at $9,182,000. He is now set to be sentenced on October 12, at which time he will face up to 20 years in prison.
Still, that isn’t likely to be the last of the case against the executive, one known for attending conferences with body guards and other bizarre stunts that set off community alarm.
A separate case against Garza for securities fraud, brought by the SEC, is still ongoing, with the agency still gathering evidence until this August. That case could still be settled out of court.
But while unrelated, today’s filing touched on the specifics of that case, with the wording singling out the company’s sale of mining equipment and describing its operations in a manner similar to a Ponzi scheme.
The U.S. Department of Justice notice, for instance, stressed that Garza’s companies defrauded consumers by routinely making false claims about how their products operated, and the state of their business dealings.
Further, it called attention to GAW’s hashlet products, a type of virtual mining product that law enforcement officials allege was actually an investment product.
GAW’s business collapsed in 2015 and is no longer operational.
Legal image via Shutterstock
Disclosure Read More
The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.