Former CEO Sentenced To Prison For Crypto Ponzi Scheme

Former CEO of a crypto company was sentenced to prison, in addition, to pay $9 million for involving his company in a major Ponzi scheme.

The fraud cost hundreds of investors millions of dollars and the U.S government and regulatory agencies got involved into solving this so-called ‘’crypto fraud’’.

33-year-old Josh Garza was sentenced by a district court judge in Connecticut to a 20-month prison sentence, 6 months house arrest and paying a grand total of $9 million back to the investors. He is believed to take a major role in a Ponzi scheme for issuing a new cryptocurrency named PayCoin that allegedly entitled investors a portion of another company’s profits.

Garza owned four companies and he conducted his plan through all four of them for 5 years.
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His companies sold rights to cryptocurrency mining operations and investors were tricked into buying a portion of these operations through his PayCoin. The district judge said that despite the operation seeming legitimate, there are a few clear signs that Garza could potentially scam them. For example, he guaranteed that the price of virtual currencies will not go below $20 per unit because he had a $100 million digital currency back up to pump the price. He did, however, plead guilty for defrauding investors. This is why he was ordered to pay full restitution to all investors.

His arrest comes after another crackdown on cryptocurrencies by regulatory bodies when a federal judge in New York ruled ICOs as securities. The SEC and other regulatory bodies are continuing their path to handling all the crypto-related scams in near future.