The collapse of Paycoin has been like nothing Crypto has ever seen. I don’t say that lightly. I realize how massive the Mt. Gox hack was, and how the Silk Road and even Sheep Marketplace incidents far exceed the money stolen in Paycoin, but Paycoin is just different.
I’ve never seen someone do what Homero Joshua Garza, better known as Josh Garza, the CEO of GAWminers LLC and creator of Paycoin, did. I don’t know if anyone has. If he wanted to create a name for himself, and image was clearly important to him, then he did that, but he destroyed his image while doing so. The last few days has been a collapse of epic proportions. Part of it, without a doubt, is Garza hamming it up. He appears to have lost control of Paycoin and seems to be willing to blow it all up. But his disregard for his own legal safety, like speaking openly about deals with Russian mobsters, seems to indicate there is more than that in play. We are watching a mental breakdown.
The people who have taken his place haven’t inspired any confidence, as long as the Prime Controllers exist, this is a Ponzi scheme with infinite money printing machines. Paycoin is down to $0.11 but what is $0.11 multiplied by infinity?
What Josh did, however, the Paycoin Foundation and TeamXPY and everyone else has yet to manage. Garza created a cult of personality that ran so strong, some didn’t disavow Garza until the very last moment. It is easy to write that off as sock puppets, we already know Garza was paying sock puppets, as shown in the leaked emails, but I find it doubtful that they were all being disingenuous. Someone bought USD $20 million dollars worth of Paycoin at one point. Maybe there was some foul play and that number is exaggerated, there was foul play in nearly everything else Paycoin, but clearly a lot of Paycoin was bought by someone.
Smart people in Crypto recognized the scam quickly enough, anyone who promises you twenty dollars for four is pulling something on someone. But enough people did jump in, buoyed by blog posts in the Wall Street Journal and New York Times, people put their life savings into something they didn’t understand, with the hope that the nerds would bring them the next digital gold rush.
So when that didn’t materialize, they should have gotten out, any rational person would have. But a large number of supporters seemed convinced that the entire internet was out to get Garza, and who would sell when Paycoin is so cheap? They would have been better off selling at a dollar, or fifty cents or even twenty cents . Just as they are better off selling now at eight or eleven cents instead of waiting for the currency to be measured in Satoshis rather than pennies.
But it was what happened a last week that made the Paycoin collapse really special. After everything else, the failed promises, the leaked emails showing corruption and malfeasance but very little talk of development or meaningful partnerships, the reveal of the still pending SEC investigation, speculation that Garza is anywhere but America, it was the total mental break down suffered by Garza that was the most interesting.
He had clearly lost it. That isn’t me showing my biases, that seems to be the reality of the situation. Having lost all but the most hardcore of his followers, his coin and likely his company, members of the Paycoin leadership began taking pot shots at him, before deciding that devouring the remains of the Paycoin corpse should be their exclusive domain. This appeared to be too much for Josh, that is my theory anyway. He posted a Skype chat between him and Phil Vadala, aka FastXPY. Vadala had been the face of FastXPY, a shapeshift-like service for Paycoin, but it was revealed in the leaked emails that the company was primarily funded by Garza.
Vadala took some Prime Controllers from Garza and in response, Garza posted a Skype chat that seemingly implicated himself in dealings with violent criminals in organized crime. While Garza later tries to frame it as him warning Vadala, the threatening undertones of the conversation are clear to anyone who has a basic ability to read between the lines.
My first reaction was that Garza’s account had been hacked. Similar things had happened, his Twitter account appeared to get hacked shortly after the email leak, so it was worth presenting him the question: did he actually post it? To my surprise, he didn’t disavow the post and instead embraced it. To my surprise, he actually answered my questions, for a while.
Once I put the screws in, and contradicted his accounts with his own words, he folded. He refused to answer any more and said he would have to talk to legal and “the authorities”. When I asked him how I can contact his legal department, he refused to give me any information. When I asked which authorities he was talking to, I was ignored.
Garza looks for sympathy because he says he is receiving death threats, but assuming that they are real at all, he brought that on himself. No one steals up to twenty million dollars without expecting to piss some people off. If the threats are real, they need to be condemned, but Garza had to know threats were coming and brought them on himself.
And so, here is my interview with Josh Garza, Homero Joshua Garza, whatever he calls himself. The Paycoin Scammer. Long time followers of Garza will notice that his responses are missing the tell tale “homerisms” that have come to haunt Garza. His seemingly constant spelling and grammar mistakes have become near legendary. I edited them out. Simply because with normal interviews, I usually clean up the interviewee’s response a little bit. I figured the least I could do for Garza, not that he is owed any favors, was extend that same courtesy.
The format is also a little strange. It starts off with just emails back and forth, but because we covered multiple topics in each email and each follow up email, I put them into a format where each subject is held together for readability sake. So, you will read one subject discussion that goes from the beginning to the end of our conversation and then you will start on the next subject that does the same. This was done for readability purposes.
That probably sounds confusing, but it should make more sense below.
My first question, I wasn’t really worried about the details of the situation, I just wanted to know if he posted the now infamous post or not. When it became apparent that he was answering some of my questions, I became more direct. I didn’t get to everything I wanted to before he ducked out, but felt that the conversation would be interesting for those still wondering exactly who Josh Garza is.
Ian DeMartino: I just want to confirm that you are still in control of your Hashtalk.ch account?
Anything you want to tell me about the Prime Controller re: Ownership and Phill [Vadala] and everything else?
Thanks.
Josh Garza: If you want to chat in the morning, that’s fine.
Ian DeMartino: I just want to confirm that the conversation posted by GAWCEO was indeed you and that the contents of the conversation were factual?
[This question was left unanswered]
Ian DeMartino: Also, I need you to confirm or deny the accusations made in this post:
https://hashtalk.ch/topic/37457/prime-controller-scraping-to-cryptsy-addresses
Josh Garza: They are not accurate.
Josh Garza: Nice reporting btw, good job keeping it balanced, leaving out all the threats made against me, etc. I can tell you will go far in your line of work! [Garza is referring to my article about his post, which was just published at that time]
Ian DeMartino: Josh, I think you misunderstand what happened last night.
You didn’t blow the whistle on anyone, but yourself. You had a break down, online, in front of the whole world. It was worse than Stephon Marbury eating Vaseline on camera. And you allowed your delusional mental state to convince yourself that people would be on your side. When you are posting that you need Prime Controllers to make criminal investors “whole” while other investors are looking at <0.10 a coin, no one feels bad for you. You are the bad guy here, and nearly everyone knows it.
You (apparently, according to your posted chat log) got involved with some organized crime elements. That you are being threatened after scamming millions of dollars, is of absolutely no surprise to anyone. It would be a bigger story if you weren’t being threatened after what you did, to be honest.
So, the story isn’t about threats being made on you or even Vadala, the story is about you having this break down, admitting crimes and then committing more. Honestly, I never imagined you would be dumb and desperate enough to post something like that. I guess that is my question for you: What made you think this post would be positive for XPY, GAW or yourself in anyway? that is what I would like to know, along with:
How much did the Russian, who is apparently involved in organized crime, invest, and how much do you/Vadala owe him?
Are you prioritizing these criminal “early” investors over the mass of regular Paycoin investors?
How often have you promised Prime Controllers to investors to ‘make them whole’?
You can say whatever you want about my career, but at least I won’t be stuck in an 8×12 cement room anytime soon.
If you have something that proves your innocence, then I suggest you post it as soon as possible.
Thanks,
-Ian
Josh Garza: I get random call, text and emails making threats all the time. I am not involved in any organization, have spoken to, or been reached [out] to. The best I know is trying to do a reverse look up on [the] texts I get. I started getting anonymous, threatening messages. I felt it was important that I warn Phil. He asked me to speak to [them] on his behalf, I told him I was not comfortable doing that.
Innocence? I have already spoken to the authorities, there is nothing wrong with warning others if threats have been made against them. Anything else?
Ian DeMartino: Again, same questions Josh, you didn’t answer any of them:
How much did the Russian, who is apparently involved in organized crime, invest, and how much do you/Vadala owe him?
Are you prioritizing these criminal “early” investors over the mass of regular Paycoin investors?
How often have you promised Prime Controllers to investors to ‘make them whole’?
I’ll add two more:
Are either the Middle Eastern investor or Russian investor actually real, or did you fabricate them out of whole cloth?
How many other investors are you directly involved with, that you know to be involved in organized crime?
[This is where I will begin splitting the conversation up by topic rather than email]
How Involved Are Organized Crime Elements?
Ian DeMartino: How much did the Russian, who is apparently involved in organized crime, invest, and how much do you/Vadala owe him?
Josh Garza: I can’t tell you. I just know the threats I have gotten.
Ian DeMartino: So, you are claiming that you never had contact with them until the threats came in? What about the so-called “Brian” in the conversation? In any case, I didn’t ask about the threats, I asked what is owed to what you called an “early investor”
Josh Garza: Since the majority of the threats I have received were people that pooled their money into one person and that was the person we dealt with. So no, I had never heard from them before.
Ian DeMartino: I’m sorry, but I don’t understand. You stated you worked with “Brian” and that Vadala had worked with Brian. So, were you working with them or not?
[This question went unanswered]
Ian DeMartino: Are you prioritizing these criminal “early” investors over the mass of regular Paycoin investors?
Josh Garza: Nope, these arrangements were done a while ago.
Ian DeMartino: How often have you promised Prime Controllers to investors to ‘make them whole?
Josh Garza: No one has ever just gotten anything for free. We have certainly looked to use XPY to promote business investors are looking to back paycoin companies. That is one of the purposes of the primes.
Ian DeMartino: How many other investors are you directly involved with that you know to be involved in organized crime?
Josh Garza: I don’t think I ever said I knew anyone that was involved in organized crime. So the answer is none. Its based on the communication I have gotten and continue to get
Should I receive another threat I will document it, warn the person if I have to, and report it as always.
Ian DeMartino: Well, you stated that “one is the head of a huge Russian family” what did you mean by that? Do you not see how that would be construed by most reasonable people to imply involvement in organized crime?
Josh Garza: One of the anonymous threats I got stated you better do X as I am the head of bla bla.
Ian DeMartino: You state “I was saving those coins to make some very large investors whole and you took that from them”
If you were saving coins for very large investors, how would you know they were needed without previous contact with them?
You then state that you gave them Vadala’s information and tell him to “keep his family close”
So, when did you realize that these people were a threat to Vadala’s family and how long after that did you continue to communicate with them?
You also state that “after I told them I would give them my coins, they told me what they are going to do” [to Vadala] That doesn’t seem possible without you having significant contact with them. Surely you didn’t give up all of your remaining coins simply because of an anonymous threat? Wouldn’t you check to make sure they were real investors?
[Josh Garza declined to answer this question]
Ian DeMartino: Now that you know they have “people” who are willing to use violence, are you still planning to give them Prime Controllers?
Josh Garza: Since I can not tie a particular person to a particular threat, they were all anonymous. So I would not have a way of knowing.
Ian DeMartino: But you stated “I was giving them [the Middle Eastern investor] 65% and the other 35% to the Russians” and then right after stated “they were getting the coins and the controllers”
That seems to contradict what you say above, doesn’t it? If the threats were anonymous, how are you giving them particular amounts of Paycoin and how are you giving them Prime Controllers? Either you are sending them to the Paycoin or Bitcoin address they demand you send it to, or you aren’t.
Later, when Vadala asked you if you could call them off, you state “I already vouched for you and said you were a safe place to keep the coins” If you had no previous communication with them, how could you have vouched for Vadala?
[This question also went unanswered]
On if Josh Was Warning or Threatening Phil Vadala
Ian DeMartino: You state in the conversation with Phil, and I quote, “I am providing these investors any info I can on you.” That is present tense and seems to indicate that you were, at least at the time of the conversation, still assisting these men in finding Vadala.
Josh Garza: These were completely different people then the ones that made any threats.
That comment was about customers that have asked for the information of the person holding the coins, so they can press legal charges.
Ian DeMartino: There appears to be nothing in the chat to indicate you have gone from talking about the investors who had threatened you and Vadala to other investors. In any case, you had stated earlier that you were giving 100% to the investors who made threats (65% to the “Middle Eastern” investor and 35% to the Russian investor) so the plan, according to your own words, was to give them the coins.
So, given that, how would legit investors hope to get their coins back, when your intention was to give the coins to the Middle Eastern and Russian investors that had issued threats?
[No answer to this question was given]
On if he will prove he is still in the United States
Ian DeMartino: Are you still in America? Will you prove it by taking a picture somewhere public with today’s newspaper? Will you do anything at all to prove you are where you say you are?
Josh Garza: It’s creepy
Ian DeMartino: Considering that (1) you had an estate sale before your “vacation” and (2) you admitted in the conversation that you were in Dubai at some point (although you denied it on the forums previously) I do not think it is an unreasonable request for the people who entrusted you with millions of dollars and have so far seen their investment evaporate, to simply ask you prove you are in the country. You have hundreds of pictures of yourself online, one more that proves you are in the same legal jurisdiction as the one your company operates in, would go a long way and would take virtually no work.
Hell, if you want, I can look at the picture to verify it and simply not publish it.
[Garza refused to answer this question]
Garza Asks Why I Don’t Report His Side?
Josh Garza: While it does not surprise, I notice you have not asked one question about the actual theft. They have been reported and we are seeking out further legal guidance.
Ian DeMartino: Honestly, no one cares anymore about the inner bickering of the Paycoin top brass. Everyone in crypto knows the ship is sinking and the rats are eating each other. I don’t honestly care and I don’t think our readers care, who owns the right to these controllers, you or Vadala. The reason being: (1) no reasonable cryptocurrency would have anything like a hyper staking wallet at 100% or 350% and (2) The plan seems to be to give them to violent criminals anyway. Please correct me if I am wrong in that?
Josh Garza: The last few weeks was [when I first] got anonymous threats of this nature. So I would say that’s incorrect.
Ian DeMartino: Again, you state that “they were getting the coins and the controllers” That seems to indicate that you want to give them these controllers once Vadala hands them over, how is that incorrect?
[Garza refused to answer this question]
Garza ended all of the above questioning with this email:
Josh Garza: Since these questions are getting outside of my comfort zone, I am going to pass them along to legal and the authorities we are working with to see what they advise me to answer, as this is an open case.
I asked him for contact information for his legal department, but he refused to give it to me, stating that they “work on their own time.” Several days later, I have yet to hear from them. I also asked him which authorities he was working with, but he never answered.
I also sent emails to Garza’s other known email addresses. They came back undelivered.
I’m not sure that there is a single person left who believes Homero Joshua Garza was acting with even half-decent intentions. Certainly, no one speaks of the honor program or dozens of other failures, except in anger.
The only debate left is what to do with all the poor saps who followed Garza down the rabbit hole. While most have moved on, a desperate few cling to the coin, while condemning Garza. It is impossible to know their motivations, but their posts echo the cries of the desperate. Even if everyone left in the community acted benevolently, the community doesn’t have the technical knowledge or good will to compete with even fourth tier currencies. It’s done, it is only going down. Investors are better off getting out now. Its short, medium and long term all look bleak. Even coins spoofing Paycoin are a better bet.
Garza won’t provide the flimsiest of evidence that he is in the country, his fans have abandoned him, his coin is becoming increasingly worthless, almost all of his emails accounts and points of contact have shut down, the SEC is breathing down his neck. If I were a man with a reason to disappear, and Garza seems like he is, I’d be working on getting out soon. If the SEC asked for my advice, I’d tell them to move quickly.
Paycoin is dead, leave it be, don’t even buy it when it is “cheap” let Garza and the Foundation and everyone else hoping to profit off of the infinite money printing machine play by themselves and for the love of god, stop giving them money.