The U.S. Department of Justice (DOJ) recently revealed that John Demarr has pleaded guilty for his involvement in a crypto scam in which he “conspired with others to defraud investor victims”.
One of the promoters of this cryptocurrency scam was the well-known actor Steven Seagal, who was charged last year by the U.S. Securities Exchange Commission (SEC) upon failing to disclose that he was paid in cash for promoting the cryptocurrency investment scheme. On the subject of Seagal’s involvement with the cryptocurrency Bitcoiin2gen, the SEC noted the following:
“Seagal failed to disclose he was promised $250,000 in cash and $750,000 worth of B2G tokens in exchange for his promotions, which included posts on his public social media accounts encouraging the public not to ‘miss out’ on Bitcoiin2gen’s ICO and a press release titled ‘Zen Master Steven Seagal Has Become the Brand Ambassador of Bitcoiin2gen.”
The scam investment scheme involved the fraudulent promotion of companies “Start Option” and Bitcoiin2gen (touted as being a “superior or more advanced version” of Bitcoin). The Bitcoiin2gen scheme stated that investors could receive upwards of “8,000% return” on their investment within one year, however were unable to receive any digital funds or fiat currency following their investment.
DeMarr and others received millions of dollars in cryptocurrency and fiat currency, after diverting the currency into funds controlled by them, and using investor funding to “for various personal expenditures, including the purchase of a Porsche, jewelry, and to remodel DeMarr’s home in California”.
DeMarr now faces five years in prison following his guilty plea.
In February of 2021 when DeMarr was initially charged, the Department of Justice noted the following:
“In today’s hi-tech financial world there are increasingly more opportunities for fraudsters to take advantage of people and their bank accounts,” said Special Agent in Charge Ryan Korner of the IRS-Criminal Investigation (IRS-CI) Los Angeles Field Office. “John DeMarr’s Bitcoin operation is one such example of a cryptocurrency investment scheme that did not payoff for his investors. Claiming to be part of a cryptocurrency ‘ecosystem,’ DeMarr created nothing more than an elaborate fraud scheme where he stole his investors’ money to fund his own personal lifestyle, resulting in losses totaling over $11 million. Financial crimes never pay, as one way or another the person behind the computer will be caught and will be held accountable.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
