Leaked Emails Detail Inner Workings Of Josh Garza's Scams

Alleged emails which detail the inner workings and day to day operations of Homero Joshua Garza's fraud outfit known as GAW Miners have been leaked. The damning emails not only confirm long held suspicions about Garza's operations but also bring to light other debacles GAW Miners finds itself involved in. The emails confirm:

  • Garza deliberately misled customers as to the viability of Paycoin.
  • Confirmation that the SEC is investigating GAW Miners, Paycoin, Paybase and other scams operated by Garza.
  • It was made advisable to GAW Miners by DHM Legal Services to shut down hashtalk.org until the SEC inquiry was resolved.
  • Paybase and Zencloud databases were compromised and thefts from those services occurred.
  • Through a close friendship with David Parker AKA Jonas Borchgrevink of CryptoCoinsNews, Garza is able to influence editorial content to his benefit.

Although Paycoin launched December 12th 2014, it was a mere week before Garza figured out his grand scheme could not work. He writes to his team:

Our entire paybase and xpy model is flawed. It has been to begin with. The crazy thing, no a single person or just has ever brought it up. Here is why. Let's separate things in to two buckets.

The first is people that buy xpy directly from Paybase at the full price of $20. We would need to escrow every penny of that right? Because that person would want liquidity for every penny because they paid full price. Right? Makes sense. Only that means we never can use that money.

Now that not the issue. The issue is way worse then that. As the above only means we would have to make money some other way. No, the issue comes next. Let's assume the the following it true. For the next year, for whatever the reasons are, the price of xpy only goes up to 18 on the open market. Maybe it will go higher, but let's agree that it's out of our control and that's the case.

So this would then mean, a person would be able to game us forever. They could go to the market, buy for 18 and come sell to us for 20 over and over and over again. Outside the limits we out in place, there is nothing we can do to stop that. This then also means we would constantly loose money from this. Now here is the scary part, combine the first thing i said. If we are escrowing all the new xpy they buy from us, where does the new money come from to cover that spread?

Now, multiply that by 10 million, and forever. Coming together now?

The entire model is flawed.

This is a big deal.

I am working on trying to figure out anyway around this. But the issue is the entire model is built around these concepts. I just can not believe I never thought of this before. There is no way this will work.

I will have amber call a meeting so we can talk about what options we have.

Numerous emails detail Garza's legal team's attempt to collect documents in order to submit them to the SEC as per the SEC subpoena. An exchange between DHM Legal Services and Garza reads:

Here is what needs to be done this week:

1. Detailed summary of the history of PayCoin (how we marketed it, how it was actually issued, what did not occur (i.e. public issuance), different ways people acquired it, who we sold to and for what price, where those proceeds went, etc.).

2. Engage an accountant to assist us in analyzing our books for SEC inquiry purposes – NEED APPROVAL OF AN ACCOUNTING FIRM ASAP

3. Need to decide who we want to send to the SEC offices with Juan in the next 2 weeks to explain from a technical side what our company does.

4. Need to submit as many responsive docs to SEC inquiry this week

David H. McLain, Esq.
DHM Legal Services, LLC

I am going to reach out to Meyers Brothers Kalicka, PC today to see if they are available to assist us with our accounting needs.

David H. McLain, Esq.
DHM Legal Services, LLC

Garza responds:

Dk, when will you have the first draft of number one finished?

Regarding number two, what are we expecting them to do in a few days?

DHM Legal Services:

They don't have to be done in a few days

DHM Legal Services also recommended Garza shutter hashtalk.org until the smoke blew over from the SEC investigation. That email reads:

It may be advisable to "turn off" Hashtalk.org for awhile (i.e. a few months) until we resolve the SEC inquiry – statements made on their by you Josh could potentially work against us in the future.

Thefts from Paybase and Zencloud were discussed by other staff members of GAW Miners. Those emails read:

Hey John,

Yesterday I found a user who figured out a way to steal from the company which I reported to the developers. Since then both PayBase and Zencloud withdrawals have been taken offline as well as the Hashmarket in order to prevent further loss.

Since these are still offline customers are posting on the forums and opening a lot of tickets regarding withdrawals being down. Are you able to craft a response we can give to customers on the forums? So far in tickets I have told customers withdrawals are currently offline and I will update them when they are back online but I did not offer any explanation as to why.

Can you help with this? I am not receiving any ETA's and I know the conspiracy theories are going to fly and people are going to get upset.


Luke Rusten
TS Manager
GAW Miners LLC
O: (866) 554-5861 x300
C: (802) 275-8932

John Caceres responds:

The fact that I am getting this Luke, who informed dev of this at 8pm, just sucks. It's great that he did it, but sucks that Matt, Jonah or Evan sat on it.

This could and should have been realty with last night.

John C. Caceres
Chief Marketing Officer
Business Technology for Cryptocurrency
34 East Dudley Town Road
Bloomfield CT. 06002
917.882.0900 – Mobile
802.359.7569 – VT Office

Garza, Matthew Eden, Jonah Dorman and John Caceres later discuss the breach:

Matthew Eden writes:

We have everything shut down atm. The databases for Paybase and Zencloud have been compromised, and we are attempting to ascertain the severity of the breach.

This nature of the breach is very convoluted though, and every bit of data we have is currently suspect. It's very possible that the markets and withdrawals for both platforms will be offline until sometime tomorrow afternoon.

Jonah Dorman responds:

This is not something that should be announced or discussed with anyone. ANYONE outside of the company and should not be discussed inside the company. I can make a generic announcement that the platforms are down for unscheduled maintenance. Just not yet.

Garza weighs in:

Hey guys, what is happening here? Jonah, why didn't we use the outage policy we placed a while back? Customers are getting upset.

John Caceres responds:

What is going on?? And why am I not be kept in this loop to the extent that we are just putting stuff up without consultation as to how to comunicate? How is it that we are being compromised…again. Who is in charge of this stuff? WTF?!!

any and all outbound communications need to go through my office including CSR scripts/messaging, announcements, outages…anything. We have had too many issues with the media and unfriendlies and their reaction to things that can be easily twisted.

I don't understand why we are addressing this nearly 12 hours later.

To which Jonah Dorman replies:

While I understand your frustration with this I would prefer that you let me know your best contact method and remain professional as well as respectful when inquiring about these types of events.

John Caceres proceeds to have a meltdown over his co-workers cavalier response to the thefts and compromise:

Are you kidding?! Do you understand the implications here? A call should have been made if you did hear from me in a timely manner, ensuring that a proper response was put together.

I did not receive an email or phone call.

And, it took hours to get a response to my earlier email. I was not copied on the original email; I received it from Josh. The response, method of response and timeliness of response is and was unacceptable.

Last but not least, damning emails between Scott Fargo, David Parker AKA Jonas Borchgrevink and Garza depict Garza's ability to guide CCN's content so as not to be as critical of Garza's scams.

Garza writes:


This is the second libelous article your publication has released in 24 hours! The conference just emailed me and we are considering filing a joint lawsuit.

Not only did they make claims about us. They said this about them:

"In their view, Josh has been less-than-honest with the bitcoin community with his company dealings, and they smell another scam coming that would re-tarnish the digital currency brand. They’ve taken it upon themselves the duty of crowd-sourced self-policing in the bitcoin space."

This completely made up and needs to be immediately removed!

Jonas, I really like you, but you need to get your arms around this. It's going to create a liability for you.

David Parker AKA Jonas Borchgrevink responds:

Looking into it now Josh.

It seems like the article has been taken down. Do you remember who wrote it? I can't find it at time being. In discussions with our editors now.

Know who the author is, trying to find out what happened to it.

From now on Josh, I've asked the editors to send me articles about Paycoin/Paybase, GAW or you, before they are published. I'll contact you before an article is published if I'm in doubt that there are any errors. Hope this works for you.

I have removed the sentence, Anything else regarding that article?

Garza replies:

Thank you man, I have no idea why we are all the sudden attack by your reporters. New is news I get that, but making up stuff is out of control. Thank you for stepping in

Can you send me the revised copy?

David Parker AKA Jonas Borchgrevink forwards Garza a revised copy, but Garza is not finished adding his own bias to CCN's articles.

Garza continues:

Hi Jonas,

Did you approve this?

I was also just informed that we were not reached out for any comment. I can not imagine you would allow that to happen?

On a different note, BTC.com will be launching soon. How far out are your ads booked?

David Parker AKA Jonas Borchgrevink replies:

Did you not get any email? Let me check with the author.

Let me know if you have any comment on the article that I can put in. Not sure if the author is awake or not.

The ads seem to be booked for 1 month (background ad) but we still have some available now, or you can book it at a later point if we can pre-arrange it.

Garza responds and now brings Chief Marketing Officer John Caceres in on the conversation:

It just seems pretty armature for him to write a piece with no attempt to gather any facts.

John, do you have input?

Jonas is the owner of CCN and has been a friend for a while now.

David Parker AKA Jonas Borchgrevink replies:

He did reach out to your law firm, but didn't receive any answers for 48 hours. Not quite sure why he didn't contact you yet, but I'm checking that.

John Caceres responds to Jonas Borchgrevink:

The law firm will not respond. Any correspondent with any basic knowledge of the US legal system let would know that. Further, if the correspondent did make contact, the firm's representatives would have directed the correspondent to the client for comment. Seems that didn't happen here.

Most correspondents know that there is this called client confidentiality. This is just shabby and irresponsible reporting. Suffice it to say, we will not acknowledge or work with any media outlet that continues along these lines; we will not "…be forthcoming at all" and will only work with outlets that have proven to be fair, balanced and responsible.

The entire category is being "investigated" by the SEC. CNN's Martin Spurlock did an hour long piece last Sunday on Bitcoin. A rep from the SEC was a part of that segment. Paraphrasing the SEC Rep, "Bitcoin / Cryptocurrency is here to stay and as such, we need to take a look at it."

Taking statements out of context and using them for gain of eyesballs seems the SOP among many publications in this category. Perhaps the only thing of value in this piece is the fact that their are a lot of crazy things that are and will happen in this emerging category to which was alluded to in this thread…quite eloquently I might ad.

David Parker AKA Jonas Borchgrevink responds with:

I can add a statement from you, let me know if you have any.

To which John Caceres replies:

I think we let Gizmodo take care of things…I haven't heard back from her, btw, yet.

Scott Fargo, writer for CryptoCoinsNews and Bitcoinist now shares his opinion on the matter:

HI David,

I just wanted to let you know Josh was able to talk about the issues that were brought up in the article.

In the last few days leading up to this article more information has been publicly released and things have happened from PayBase and TeamXPY and none of that was mentioned.

There are things promised that are actually happening. I have in my possession the emails confirming they have struck the deal with MasterCard. Despite coinfire who again called Master Card to ask about a partnership that was not announced they have a deal with a processor as it normally goes to provide debit cards to their customers.

The reason am writing this is because good or bad news it does not matter I take a ton of crap. I cannot even use reddit anymore due to the crap storm from the PayCoin/GAW stuff. I covered their news good and bad since they started their business. This negatively effects me even more when a one sided article like this comes out. I can and will connect writers with Josh or anyone in the Mining industry be it cloud or physical. I would have made sure Josh responded to Paul's request for a comment.

I have not published anything on PayCoin/GAW anywhere to try and weather this storm. I have slowed down my writing to the point I just got the lowest payment since I started CCN because I am so frustrated with all the harassment I get. I was literally cyber bullied out of the funds that were donated to me by the community to pay my medical bills putting me in a very difficult financial situation.

Paul is a writer I respect very much and consider him a friend I am not bashing him here. I just think we need to stay neutral in this we cannot swing to negative just to placate these few people.

I have learned the hard way they do not care about any of us what we do or do not do. They have their own agenda to destroy Josh and his company no matter the people the have to hurt to do so.

I included Josh in this email because I wanted you both to know how I feel. This has ruined me and my family financially. It has shaken my self confidence as a writer.
My point is we need to stay neutral here we need to cover both sides or not at all. I will get any info I can from Josh to give you as proof. I will copy you David on the Master Card emails like I did the Gyft information if you want and Josh is ok with me sending them

This whole situation has messed me up badly. I was sitting here writing about the BitFury 28nm release when I started getting msgs about the article getting blamed by one side for not bashing GAW enough (despite it not being my article) and the other side wondering why CCN would only print the negative side.

I am sorry for this wall of text to both of you but I have had my entire life directly affected by this.
Please let me know what I can do here to help??

I want to reiterate as well that I am not nor have I been paid by Josh. People seem to throw that out there anytime I do anything.

As a note David I will have my BitFury article ready in a couple hours.

Thank you for the opportunity to be part of the CCN team and thank you Josh for taking the time to contact me inside details for verification on things you announce.

Thank you,


Josh Garza replies:

Thank you Scott, and I can confirm the same things. You are a man of integrity.

We did find it ironic that CCN rushed out to write and entire story about a credit processor (stripe) that is had no real facts about, yet did not write an article about gyft, even though it had the evidence.

Then to read this article, also without any attempt to collect any real facts. Who writes an article about a companies programs and does not contact them? Even coinfire contacts us before they write their garbage.

I am not sure asking for a quote after the damage is done, is an ethical way of handling things.

The appropriate way to handle this is to write another piece and take ownership of the fact they we were never asked for our plans. Then report on our plans, so the facts are actually delivered.

I hope the right thing happens.


David Parker AKA Jonas Borchgrevink replies:

I would like to have a new article with all your plans revealed, can you give us a sum of it and either Scott or another journalist can write a follow up. That would be good.

Josh Garza replies:

This is a bit challenging as we are not ready to show them all. I guess the point is more that had they contacted us, we could have given them a high level plan which would have debunked the entire article.

In essence, the article that is there is very false as it missing facts.

Scott Fargo replies:

Hi David and Josh,

Let me think a bit on how best to address this. I do think David you are right an article with the proof and info is a good idea. That being said Josh I know you have things you cannot talk about yet.
Let me think of a way to present what you can release publicly and also maybe get Team PayCoin involved. If we can present a balanced article I feel it would be a good thing.Give me a couple days. I am so beaten down by all of this I do not want to make any mistakes.

Thank you both for reading my concerns last night. This has been very stressful for me.


Additional emails contained in the leak include correspondence between Garza and journalists from Ars Technica, Gizmodo and CoinTelegraph. These emails do not include anything untoward but are available to download here with the aforementioned emails included in this article.

4 thoughts on “Leaked Emails Detail Inner Workings Of Josh Garza's Scams

  1. "Our entire paybase and xpy model is flawed. It has been to begin with. … Here is why."

    The floor price scheme was obviously flawed, but his explanation is laughable. He cames out as one who is unable to do simple accounting.

    Didn't it really occur to him, when conceiving of the plan, that Paybase would have to keep those 20 $/XPY in reserve, in order to peg the coin at that price?

    His "nex issue" is not a separate problem; the reserve would be necessary precisely because of that "next issue".

    However, the reserve of 20$ for each issued XPY would be also *sufficient* for that "next issue", because the redeemed XPY would come back to Paybase, so they would only have to cover the price difference only once for each coin.

    • Yes, this Josh doesn't seem to be a bright bulb.

      > They could go to the market, buy for 18 and come sell to us for 20 over and over and over again.

      No, Josh — you become the bag holder — and just sit on those XPY that you bought at 18 unless the price rises above $20. Nobody can sell to you XPY that they do not have so there's no risk of paying "over and over".

      If the price later goes above $20 you can sell into the market those XPY that you bought and those proceeds go back to the escrow in case later the price drops below $20 again.

  2. if they had the $100 million CAF as they claim this is a non-issue! however, it seems that was also a lie, they don't and they're in the hole for x * paycoin whatever value

  3. Juicy lolzmine is juicy.

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