BRATTLEBORO >> The Securities and Exchange Commission is asking a federal judge in the state of Connecticut to award a default judgment of more than $10 million against a former local businessman accused of running a Ponzi scheme.

According to documents filed in federal court, Homero Joshua Garza, who founded Great Auk Wireless in Brattleboro with Nick Huanca, used cyber currency — Hashlets — to defraud his customers. Garza and Huanca also founded Optima Computers. Both were graduates of Leland & Gray Union High School in Townshend. Huanca has not been implicated in Garza's scheme.

Garza stands accused of perpetrating the fraud through his Connecticut-based companies, GAW Miners and ZenMiner, by purporting to offer shares of a digital Bitcoin mining operation. "In reality, GAW Miners and ZenMiner did not own enough computing power for the mining it promised to conduct, so most investors paid for a share of computing power that never existed," stated the SEC, in a press release. "Returns paid to some investors came from proceeds generated from sales to other investors."

In an interview conducted in February 2014 by Tech Crunch, Garza said he used $1 million of his own money from the sale of Optima and Great Auk. "The company was an overnight success and achieved over $10 million in sales during its first month and is on schedule to do $100 million in this first year," said Garza.


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According to research conducted by VTDigger, Garza had registered and dissolved about a dozen companies in at least three states — Vermont, Massachusetts and Delaware. According to VTDigger, the SEC, the Federal Trade Commission, the Department of Homeland Security and the IRS are all involved in the investigation into Garza's activities.

According to the SEC, Garza and his companies sold $20 million worth of Hashlets to more than 10,000 investors.

According to VTDigger, Garza, 30, still lives in Brattleboro, but earlier this year there were reports that he had fled to a country in the Middle East to avoid prosecution.

In the spring of 2015, an investigator for the SEC received computer files from an unnamed GAW Miners employee. "The ZenCloud Database produced to the Commission is very large. It consists of 29 tables containing approximately 45 million records. Because of its size, and the amount of personally identifiable information about Hashlet customers it contains, it would be technologically challenging to produce the complete database to the Court for its review."

According to the document review, Garza sold $20,755,203 in Hashlets, paying back $15,336,090 to investors. But Garza charged $4,659,218 in "maintenance fees" to his investors, resulting in a total disbursement of $10,078,331, wrote the investigator.

The SEC is asking for a default judgment because of Garza's failure to answer or appear. However, on Jan. 27, an attorney made an appearance on behalf of Garza. The court allowed his attorney until April 1 to file a response.

Garza also made a number of fraudulent claims, according to court documents, including "Hashlets would be always profitable and never obsolete."

"There was no computer equipment to back up the vast majority of Hashlets that the two companies sold," state court documents. "As a result, most of the purported 'returns' that were paid to investors were not actually proceeds earned from virtual currency mining. Instead, most of the those claimed returns were the slow payback, over time, of money investors collectively had paid to purchase Hashlets."

In 2014, Garza received a $64,130 grant from the Vermont Telecommunications Authority to serve 11 locations in Rutland County, but the company never delivered the service, according to the state. The Attorney General's Office sent a letter on April 10 demanding the return of the grant award money. The Attorney General's Office says it sent a second letter on May 15, and it was delivered, but the state has not been reimbursed.

Bob Audette can be contacted at 802-254-2311, ext. 160.