Plaintiff in civil suit claims Garza has reached plea deal
According to Shinners, the plea deal was reached between Joshua Homero Garza, the U.S. Department of Justice, the FBI and the SEC. Shinners wrote that he learned about the plea deal on a conference call with the FBI and the DOJ on March 31. Shinners is a plaintiff in a civil suit filed against Garza's alleged partner in a bitcoin scheme the plaintiffs contend bilked thousands of investors out of millions of dollars.
Jane Kreisman, who first reported the story (https://www.linkedin.com/pulse/crypto-criminal-josh-garza-pleads-guilty-jane-kreisman) and who claims she also lost money in Garza's bitcoin scheme, wrote on LinkedIn.com, "Burned customers worldwide are celebrating the news published today from Allen Shinners, (AKA Allen1980s online,) who is leading a civil suit, called the GAWsuit, and helping various federal agencies prosecute Garza and (Stuart) Fraser, who are accused of operating an illegal Ponzi scheme."
"A specific restitution amount has been agreed to," wrote Shinners. "The hearing, for the plea deal, is sometime in May or June. Sentencing, for prison time, will be not long thereafter."
In late March, in documents filed with the U.S. District Court for the District of Connecticut, it was noted that a trial for Garza, who was accused of violating federal anti-fraud laws, was scheduled for early next year.
"Garza's victims, including the author," wrote Kreisman, "who expected another whole year's wait for the latest court date recently set, will be relieved to see justice served that much sooner, and are already expressing pleasure online to see Garza finally admit his guilt."
According to court documents filed by the SEC, violations committed by Homero Joshua Garza "relate to his sale of investment contracts, that he named Hashlets, to more than 10,000 investors."
"Defendants sold far more Hashlets worth of computing power than they possessed. Garza and his companies also made numerous false and misleading statements about their virtual currency mining operations to potential and actual investors," stated the Securities and Exchange Commission.
For his part, Garza has had little to say, pleading the Fifth Amendment and refusing to answer any questions about his involvement. The SEC filed its complaint against Garza in late 2015. He founded the now-defunct Optima Computers in Brattleboro in 2002. After Optima Computers went out of business, Garza and Fraser founded Great Auk Wireless High Speed Internet, also in Brattleboro. Garza and his Connecticut-based companies, GAW Miners LLC and ZenMiner LLC, which operated under the business name of ZenCloud, sold $20 million worth of Hashlets from August to December 2014.
Garza and his alleged partner, Stuart A. Fraser, a vice president at the investment firm Cantor Fitzgerald, were named in a civil suit by Shinners and other investors seeking the return of $10 million. Garza was dismissed from the suit following "discussions," according to court documents. In January, Fraser filed a motion to dismiss the civil suit. In March, the federal court denied Fraser's motion.
Fraser, who has been characterized by the plaintiffs in the civil suit as Garza's mentor and "the man behind the curtain," has contested that he had very little, if any, control of Garza's actions in the alleged Ponzi scheme. Fraser has claimed the plaintiffs made "a deal with the Devil, agreeing with the previously alleged mastermind of the fraud ... Joshua Garza, to dismiss all the claims against him in exchange for purported information from him in the hope that it could cure the deficiencies in their claims against Fraser."
Shinners wrote that people who have filed documents with the SEC that support their claims that Garza bilked them out of money will be contacted by "FBI/DOJ Victims' Advocates" soon. "What they are looking for, is how this fraud has affected you directly (adversely). I know how much many of you have lost, and it is important that you respond to the FBI/DOJ advocates when they contact you. It may affect how the judge decides the period of time Garza will spend in prison."
Alleged victims will also be invited to speak at the federal sentencing hearing, wrote Shinners, and those who are unable to attend can write a victim statement.
"As for our civil case, it is proceeding," wrote Shinners. "Hopefully, I will be able to make a formal announcement soon."
Bob Audette can be contacted at 802-254-2311, ext. 160. Follow him on Twitter @audette.reformer.
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