SEC: Josh Garza and GAW Miners “robbed one investor to pay another.”

This is the second civil suit filed against the company within the last six months—it was sued by the Securities and Exchange Commission in December 2015 over similar accusations of fraud. The SEC alleged $19 million worth of fraudulent deals. (That SEC case was put on hold for six months, starting in April 2016, according to court records.)

In early 2014, GAW Miners was first introduced to the Bitcoin public by re-selling mining rigs. Later, the company shifted to cloud-based mining (Hashlets), and in early 2015, it introduced its own altcoin, dubbed “Paycoin.” GAW also tried its hand at its own cloud-based wallet service (Paybase) and its own online discussion board (HashTalk).

Carlos Garza: “I want to help, but l’d have to have an attorney present.”

According to the suit, which was filed last week, GAW founders Joshua Homero Garza and Stuart Fraser (who at the time was a vice president at the investment firm Cantor Fitzgerald) scammed those that paid money, believing they were getting something for that payment. The four named plaintiffs, who seek unspecified damages, hope to represent the approximately 10,000 customers that they say were taken for a ride by Garza and Fraser.

As the plaintiffs allege:

Defendants’ activities had the hallmarks of a Ponzi scheme. Because defendants sold far more computing power than they owned and dedicated to virtual currency mining (with respect to hosted mining services and Hashlets), they owed investors a return that was larger than any actual return they were making on their limited mining operations. Investors were simply paid back gradually over time, as “returns,” the money that they and others had invested in GAW Miners’ products and paid to GAW Miners for purported “maintenance” fees.

In January 2015, Garza told Ars that he “started the company because of scammers.” He claimed that he first heard of Bitcoin around a year ago, at which point he tried to buy a hardware mining rig and “spent $100,000 for a product I never got.” He declined to say which company he purchased the rig from.

“I’d never had any experience with that—realizing a couple weeks later that these guys didn’t care how much money I can afford to lose,” he said. “I got really frustrated and thought we should start a company to try to fix this.”

Garza told Ars that GAW made “over $1 million in sales our first month,” adding that within a few months, “we leveled at $60 million to $80 million per year.”

At the time, Garza claimed the company had 100,000 customers, with “10,000 to 15,000 new accounts per day.”

Neither Garza, nor Fraser, nor Garza’s attorneys have responded to Ars’ request for comment.