A private detective-turned-cryptocurrency promoter who used Steven Seagal to fleece investors out of $11million has been jailed for five years…
58-year-old John DeMarr, of Santa Ana, California, faced a federal court in Brooklyn for sentencing last week, having pled guilty to one count of conspiracy to commit securities fraud.
That admission was related to a scam perpetrated by DeMarr and others which saw them court investors for their cryptocurrency company Bitcoiin2Gen (B2Gen) and crypto-trading platform, Start Options.
However, the $millions invested were instead siphoned off via various accounts and in Marr’s case used to buy a Porsche, expensive jewellery, and the remodelling of his California home.
IRS-Criminal Investigation Special Agent-in-Charge, Tyler Hatcher stated: “DeMarr, a promoter of several digital asset-related companies, conspired with others to defraud victims and made misleading representations for significant profits.
“DeMarr diverted funds into accounts he controlled and spent the money to maintain a lavish lifestyle. Those who line their pockets with profits from these schemes should know they will not go undetected and will be held accountable.”
Steven Seagal Left on the Hook for $314k
The crypto-scam used celebrity endorsements including some that were fake and some that were paid for, the latter featuring martial arts movie icon, Steven Seagal.
Seagal was promised $250,000 cash and $750,000 of B2Gen tokens for his endorsement, but ended up paying a $314,000 settlement to the Securities and Exchange Commission (SEC) for not disclosing his role was paid.
Despite DeMarr pleading guilty, United States District Judge LaShann DeArcy Hall refused to show leniency and sentenced DeMarr to 5 years in prison and ordered him to pay $3,513,305.41 in forfeiture.
United States Attorney Breon Peace stated of the sentence: “DeMarr took advantage of those who trusted him, persuading them to double down on their investments when he knew that his cryptocurrency companies and their dubious celebrity endorsements were scams being used to fund his lavish lifestyle.
He added: “The victims ultimately lost everything, so it is appropriate that DeMarr lose his freedom for concocting this fraud.”
Hatcher said: “Cryptocurrency schemes are on the rise. The Internal Revenue Service Criminal Investigation and our law enforcement partners are working diligently to identify and investigate criminals who perpetrate these schemes, like John DeMarr.”
Cryptocurrency has been much in the news recently due to the FTX scandal, which had a poker dimension to it, the lawyer at the heart of the Ultimate Bet scandal, Daniel S. Friedberg, also part of the FTX setup.
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