SPECIAL REPORT: SEC investigates Vt. broadband company founder

Josh Garza

Josh Garza posing with one of two red Ferraris.

Wireless Internet customers and the state of Vermont may have fallen prey to an alleged scammer who is under investigation by the U.S. Securities and Exchange Commission.

Customers in the Brattleboro region say representatives for Great Auk Wireless are not picking up the phone to field customer complaints, and the founder of the company who left it two years ago may have fled the United States to avoid an investigation.

The company, now called GAW High Speed Internet, serves more than 1,000 customers in Vermont, according to Jim Porter, the head of the state’s telecommunications division. Customers have had outages in recent months and in some instances have lost email service and can no longer retrieve anything from their email accounts.

The Department of Public Service is asking customers who use GAW Wireless to call the consumer affairs line at 1-800-622-4496. The department will provide customers with information about alternative wireless Internet service providers.

Porter said it was “not a good sign” that GAW’s website has been down this week.

Most addresses in GAW’s customer base have another option for Internet services, and the remaining roughly 100 will have access once a federally funded project is completed, Porter said. The Public Service Department answers a consumer hotline daily to help customers find providers, and Porter says his staff is there to help Vermonters find broadband companies.

The consumer advocates at the Public Service Department may be the last options for customers, since no one can confirm who is running GAW, and Crypto Coin News is reporting that the alleged founder of the company fled to Dubai to escape creditors and federal regulators, who subpoenaed him in February in relation to his startup company, PayCoin, a Bitcoin-like enterprise.

Vermont’s Public Service Board does not have the legal authority to regulate any Internet service provider. While the attorney general can investigate and prosecute a business for consumer fraud, two letters that the office sent to the last known address of the owner of GAW High Speed Internet were returned to sender.

Meet Josh Garza

The man in question is Homero Josh Garza, a 30-year-old Houston native who moved to Vermont at age 17 and attended Leland and Gray High School in Townshend. He started his first company, Optima, a computer repair company, while he was in high school, and then started Great Auk Wireless, before settling down in Massachusetts.

But Garza made a name for himself in the digital currency industry with a failed company similar to Bitcoin.

Garza has 44,000 followers on Twitter, and pictures on the Internet show him wearing a tuxedo, riding in a private jet and posing next to Ferraris. His former address just outside of Springfield, Massachusetts, is a 5,300-square-foot, four-bedroom stone house with a marble entryway that sold for around $600,000, according to real estate listings.

Garza has registered and dissolved about a dozen companies in at least three states — Vermont, Massachusetts and Delaware. Garza’s latest digital currency company, which came and went in early 2015, was called GAW Miners, and is now being sued for more than $300,000 in unpaid electric bills, according to Crypto Coins News.

The Securities and Exchange Commission is investigating Garza and anyone else involved in the digital currency company, according to a leaked subpoena dated Feb. 6 demanding that Garza appear in Boston and provide relevant documents. The SEC previously subpoenaed GAW Miners email from Google for the company’s domain names and TD Banknorth records, according to the Bitcoin industry news website Coin Fire. SEC internal documents obtained by Coin Fire show the cloud mining system Hashlets may be considered to be an unregulated security. The SEC investigation is centered on the marketing of an unregulated security.

The SEC is sharing documents with the Federal Trade Commission, which is also investigating GAW Miners in a multi-agency effort, according to Coin Fire. The Department of Homeland Security and the IRS are also involved in the probe. The FTC is investigating whether GAW Miners was engaged in false advertising; Homeland Security is looking at potential money laundering activities; and the IRS is probing potential unreported capital gains, Coin Fire reports.

Josh Garza

Josh Garza

Cryptocoinnews.com suggests in a video report May 29 that Garza fled to Dubai.

GAW Miners is registered with the Vermont Secretary of State through a parent company, but the GAW Miners registration was terminated because Garza did not file updated annual reports. GAW High Speed Internet is also registered with the Secretary of State, and also has been terminated for lack of annual reports.

Garza has ruffled feathers with local governments and customers in New England in connection with his wireless broadband company — which is similar in name but separate from the company under investigation. In 2012, he gave up on building broadband access in Ashland, Massachusetts, despite being offered a $40,000 government broadband grant, according to the Christian Science Monitor.

Meanwhile, the state of Vermont is trying to collect $18,018 in grant money because GAW High Speed Internet never provided wireless broadband service that it promised to build in 2014. The money was part of a grant for $64,130 from the Vermont Telecommunications Authority to serve 11 locations in Rutland County, but the company never delivered the service, according to the state.

Porter, director of telecommunications and connectivity at the Public Service Department, says his division just assumed the responsibilities of the Vermont Telecommunications Authority last week. Porter said his office knew for several years that GAW’s service was “subpar,” and the division reached out to the Attorney General’s Office two months ago.

The Attorney General’s Office sent a letter on April 10 demanding the grant award money back. The letter was returned to sender on May 6. 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.

Consumers complain of Internet outages, lost email

GAW High Speed Internet was started by Garza in 2004, but he departed the company as chief executive officer in 2012, according to his personal website and LinkedIn profile.  However, through June of this year, GAW was operated by website that named Garza as its CEO.

The site boasted that GAW was “one of the largest technology-based companies in New England,” and it had a picture of Garza posing with Gov. Jim Douglas. While it purported to be a large company, GAW’s LinkedIn snapshot said it had between 11 and 50 employees.

“For a couple of years we have believed they have provided subpar service,” Porter said. “As we look at our connectivity map we want to increase speeds in targeted areas where GAW is the provider. We have known them to be a problematic provider for two to three years.”

Rep. Oliver Olsen, I-Londonderry, has heard complaints from constituents in his district and has raised concerns with the state about whether the company will dissolve and leave customers without service.

Porter said GAW has between 1,000 and 2,000 customers in Vermont, and 29,000 addresses are within the company’s wireless broadband coverage range. Most customer addresses in GAW’s service territory have other options, he said, and 133 will have access to broadband service once VTel finishes the project it started in 2011.

“The [state] made a grant to GAW, and [the company] did not do the work,” Porter said. “When we transitioned and took over [the Vermont Telecommunications Authority], we asked the attorney general to send a demand letter and take whatever actions necessary. The demand letter came back with no forwarding address three weeks ago.”

Porter said he has “no idea” who is running the company. And the customers Garza left behind in Vermont are sending complaints to the Attorney General’s Office. Three have made complaints by phone to the Consumer Assistance Program office, according to information provided in a public records request, and one couple complained in writing.

The complaints mainly claim that GAW customer service does not answer the phone when they call for help. Two customers say they were calling to report that email accounts they had for years through GAW had been disconnected as of May or June.

Jim Porter

Jim Porter, telecommunications director of the Vermont Public Service Department. File photo by Hilary Niles/VTDigger

Three more people have complained to Vermont’s consumer utility advocates since 2005, according to Autumn Barnett, director of the consumer affairs and public information division at the Public Service Department. Barnett said the department did not consider those complaints grave enough to follow up on.

Dawn Carillo, of Lowell, said that she and her mother have used GAW’s email services but now haven’t been able to get into their Gmail-based email accounts with GAW since May.

According to a spokesperson at Google, the Gmail-based email product that GAW was buying was scheduled to dissolve by mid-2015. Google says it told intermediary companies that the change was coming, but not end users, who in this case would be GAW customers.

“It’s just really, really bad,” Carillo said. “Everything in my life goes through my email. I don’t get notices through the mail. I’ve done away with paper wherever I can.”

Additionally, a couple from Maidstone allege that GAW never paid them the $3,000 they agreed upon for leasing property in East Maidstone. Guy and Gail Giampaolo told the Attorney General’s Office that they had agreed in 2006 to lease their property in exchange for free monthly broadband service and a $300 annual payment. They declined to comment on the issue when reached by email.

“As of today, we have never received any annual compensation,” the Giampaolos wrote in a May 26 complaint. They then described a long series of attempts at communicating with GAW High-Speed Internet between April and late May, and allege that customer service representatives said supervisors were “too busy” to answer their inquiries.

The Attorney General’s Office had to re-send that consumer complaint because the address they had on file was not valid. GAW High Speed Internet was allegedly operating in the state of Connecticut, but the company is not listed with the Connecticut Secretary of State, and a representative at the Connecticut Attorney General’s Office said that they have no record of companies using the letters “GAW.”

David Witthaus, a business owner in Easthampton, Massachusetts, reached out to VTDigger directly. He said his company had a weeks-long Internet outage in the spring, another outage in June for about 24 hours, and he has service again.

“It’s very, very frustrating because they came into this area and offered what seemed like a great service,” Witthaus said. “Now it’s seeming like you get what you pay for.”

Witthaus pays $79.95 per month for his business to have wireless Internet and a digital phone system. GAW sends an invoice labeled with a P.O. box address in New Hampshire at the top, and a physical address in Connecticut at the bottom.

Witthaus then pays with a credit card through an online portal and does not have to send in a physical check. There are no manager or owner names listed on his invoices.

No clear owner of the company

Until Monday, the GAW High Speed Internet website offered a wireless Internet and digital phone package starting at $59.90 and free Internet for five years to customers who referred their friends. The company website, www.gawhsi.com, displayed the same error message all day Monday and on Tuesday morning. It was at least the second website outage since June.

But while Homero Josh Garza was the alleged owner of GAW High Speed Internet, actual management and accountability for the company remains unconfirmed. The only response VTDigger received from a live person at GAW came from Luc Beaubien, whose LinkedIn says he stopped working at GAW in May 2015.

“In the event of an outage our customer service group adds an introductory notice at the beginning of the greeting message detailing the affected areas so that our customers do not need to wait to speak with a representative to obtain this information,” Beaubien wrote in an email. “Call volumes will increase significantly during an outage and unfortunately so do the wait times.

“We also recently informed our [Northeast Kingdom] customers that we were moving to a new head end for the region with double the capacity in order to eliminate peak times slow downs,” Beaubien wrote. “I am pleased to say that facility is now in place and we will shortly begin the process of shifting traffic to this new facility.”

He did not respond to several follow-up inquiries about his comments on the Northeast Kingdom. According to Beaubien’s LinkedIn account, he worked two stints as president and general manager for GAW before he stopped working in May.

Calls to 1-877-543-8429 and 855-GAWSPEED had a 10- to 20-minute wait times before leaving messages that went unanswered. In June, a customer service representative gave VTDigger an extension number for management that looped the phone call back to the customer service line.

Witthaus said he and the other businesses in his area have phone and Internet service through GAW working again. But the outage in June made him think “they were actually done” doing business in the area.

Anne Galloway contributed to this story.

Erin Mansfield

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2 Comments on "SPECIAL REPORT: SEC investigates Vt. broadband company founder"

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Matt Fisken
1 year 4 months ago
Nice work Erin and Anne. This story shows why we need VT Digger! I’ve had 5 years of experience dealing with GAW; not as a customer but as a neighbor to two of its unlicensed, jury-rigged wireless facilities which they convince unsuspecting home/business owners to host on their roofs (employing a little-known loophole in VT statute). http://legislature.vermont.gov/statutes/section/24/061/02291 (see the last paragraph of section 19) I wonder if these revelations will shut down this pyramid scheme for good. And maybe other would-be entrepreneurs can learn something here: it’s probably best not to name your company after an extinct flightless bird. I… Read more »
1 year 4 months ago

Great photo.

The more things change the more they DO remain the same; the paradox of the pendulum.

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