A private detective turned cryptocurrency promoter who used Steven Seagal to bilge investors out of $11 million has been jailed for five years…
58-year-old John DeMarr, of Santa Ana, California, appeared in federal court in Brooklyn for sentencing last week, after pleading guilty to one count of conspiracy to commit securities fraud.
This admission was related to a fraud perpetrated by DeMarr and others that led to them defrauding investors for their cryptocurrency company Bitcoiin2Gen (B2Gen) and crypto trading platform Start Options.
However, the millions invested were instead withdrawn through various accounts and in Marr’s case used to buy a Porsche, expensive jewelry and the remodeling of his California home.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 substantial profit.
“DeMarr diverted funds to accounts he controlled and used the money to maintain a lavish lifestyle. Those who line their pockets with profits from these schemes should know that 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 in 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 that his role was paid.
Despite DeMarr’s guilty plea, US 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 restitution.
US Attorney Breon Peace said of the sentence: “DeMarr took advantage of those who trusted him, persuading them to double down on their investments when he knew his cryptocurrency companies and their dubious celebrity endorsements were scams used to fund his lavish lifestyle.
He added: “The victims ultimately lost everything, so it is fitting that DeMarr loses his freedom for creating 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 in the news a lot lately because of 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.
