Josh Garza’s former Internet company Great Auk Wireless pays Vermont, and NEWco forms

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Josh Garza’s former Internet company Great Auk Wireless pays Vermont, and NEWco forms

Sat, 12/19/2015 - 8:20am -- tim

by Erin Mansfield vtdigger.org The embattled Internet company started by a Brattleboro man now accused of running a Ponzi scheme has agreed to pay back thousands of dollars it owes the state of Vermont. And former managers have bought the broadband assets to create a new company. GAW High Speed Internet, which Homero Josh Garza started under the name Great Auk Wireless in 2005, has agreed to pay Vermont $18,018. The company received the money from the state in January 2014 to build broadband in Rutland County, but the state says it never completed the work. The Attorney General’s Office spent more than a year trying to get the money back.

Josh GarzaJosh Garza

Under the terms of the grant, GAW High Speed Internet was supposed to use a $64,130 grant to build out wireless broadband in 11 locations — mostly in Pittsford, Chittenden and Ira. The Vermont Telecommunications Authority, which dissolved into the Public Service Department on July 1, awarded the grant in payments, but soon stopped making payments when staff realized the buildout work wasn’t being done.

According to communication obtained by VTDigger, the company’s management wrote grant updates in early 2014 describing reasons the work wasn’t being done, including the alleged ongoing illness of a manager. Grant updates signed by GAW High Speed Internet management also alleged that other telecommunications companies had been reneging on promises to let them build at certain sites in Rutland County.

In August, the executive director of the now-defunct Vermont Telecommunications Authority expressed concern about whether GAW High Speed Internet would ever complete the work, according to documents provided through a public records request. In November 2014, the Vermont Telecommunications Authority wrote a letter to GAW High Speed Internet demanding the money back and threatening to sue.

VTDigger wrote about the dispute between the state and the company in July after receiving customer service complaints from GAW customers. Now, in a settlement agreement notarized Dec. 15 and released to VTDigger on Dec. 17, GAW High Speed Internet agreed to pay back the state in six installments of $3,003 and finish paying back no later than May 15, 2016. The company has already paid the first two installments, the Attorney General’s Office said.

The news comes two weeks after the U.S. Securities and Exchange Commission brought a civil complaint against Garza, 30, of Brattleboro on charges of securities fraud. He started GAW High Speed Internet under the name Great Auk Wireless in 2005 with Stuart Fraser, the vice chairman of the New York City investment firm Cantor Fitzgerald, according to documents from the Vermont Secretary of State’s Office. Garza left the company in 2012, according to his LinkedIn profile.

The feds now allege that Garza ran a Ponzi scheme through the façade of a digital currency company, GAW Miners, which failed in early 2014 and is legally separate from the Vermont-based Internet company. He has registered and dissolved several limited liability companies in Delaware and Vermont over the years. But the first one to use the acronym “GAW” was the Vermont-based Internet company.

“While we’re disappointed the work didn’t get done, we’re pleased to reach a settlement and get the funds back so we can find other paths to get service to those locations in Rutland,” said Chris Recchia, the commissioner of the Department of Public Service, which now oversees telecommunications grants for Vermont.

Recchia said he was not sure whether GAW could be eligible for broadband grants in the future. “Obviously this doesn’t bode well for grants to Great Auk,” he said. “We need them to actually follow through on their commitments. That said, the fact that they’re paying the money back does help in terms of future potential grant requests.”

However, the company formerly known as Great Auk Wireless appears to have effectively shut down. The site www.gawhsi.com is not loading. A new company, called New England Wireless Co., or NEWco, has emerged at www.newisp.net. The company bought all the assets from GAW High Speed Internet, acquired of their customers, and notified them in October.

Luc Beaubien, who as recently as July was managing GAW High Speed Internet as an independent contractor, is now the managing owner of NEWco. The new company is registered in Delaware and has subsidiaries in Vermont, New Hampshire and Massachusetts, according to Beaubien. His business partner is Bob Jordan.

“We’re not GAW,” Beaubien said in an interview. “Please. We’re not GAW. New company, different ownership, we’re doing what we think is the right thing to do. We have the freedom to do it. We’re closer to the action.”

Beaubien described NEWco as “a dedicated group of individuals” who see a need for “fixed wireless done right.”

Fixed wireless is the technology that allows customer to use a company’s receiver and get a broadband connection without having a cable run to their home. The Vermont Telephone Co., or VTel, has also been installing fixed wireless with its $116 million grant package through the federal government.

“We have a lot of experience in the wireless business,” Beaubien said. “We certainly are familiar with the networks and the equipment that GAW High Speed Internet had. We are very motivated to make this work, and we see the opportunity to grow this business.”

NEWco’s current Vermont customers — about 500 — are in the Northeast Kingdom, the Upper Valley, parts of Lamoille County, and Windham County. The rest are in parts of New Hampshire and Springfield, Massachusetts, according to Beaubien.

“We are certainly very pleased that the GAW High Speed Internet shareholders opted to come to a resolution with the (Attorney General’s) office,” he said. “That’s to everyone’s benefit, for sure.”