thecoinrepublic.com
If proved can Face 5 Years in Prison
- The Ponzi scheme falsely claimed that it would generate more than 8000% returns
- John DeMarr, 55, pleaded guilty for his involvement in a cryptocurrency scam
- Investors money were transferred for various personal expenditures
A promoter of the cryptocurrency scheme, which was touted by famous martial artist and actor Steven Seagal, has pleaded guilty for his participation. The Ponzi scheme falsely claimed that it would generate more than 8000% returns for the invested amount in one year.
IN A STATEMENT ON FRIDAY, the U.S. Department of Justice (DOJ) said that John DeMarr, 55, has pleaded guilty for his involvement in a synchronized cryptocurrency and securities scam scheme through ostensible digital currency platforms and foreign-based financial accounts.
It was a carefully orchestrated fraud by John DeMarr.
Gullible investors were promised considerable returns in exchange for investing in their companies, ‘Start Options’ and ‘B2G,’ based on materially false and misleading representations. Both the schemes, according to the Department of Justice, were a sham and were fraudulent.
Start Options was touted as a cryptocurrency mining and trading platform. At the same time, B2G, also known as Bitcoin 2gen, was promoted as an “ecosystem” for its native B2G token where users could trade digital and fiat currencies.
John DeMarr started offering securities via the Start Options website in approximately December 2017. Investors were asked to deposit their funds in bitcoin, U.S. dollars, or euros. The investors were promised massive returns for their investment.
However, the money was not used for its intended purpose of investment in cryptocurrency as advertised. Instead, the money was funneled into the funds to accounts controlled by DeMarr. In addition, the money was used for various personal expenditures, including purchasing a Porsche, jewelry, and remodeling DeMarr’s home in California.
Start Options falsely claimed to have the endorsement of prominent celebrities.
Start Options falsely claimed to have the endorsement of prominent celebrities to promote its securities offerings. The Department of Justice, in a statement, said that gullible investors were impressed by these fraudulent claims, and investors sent millions of dollars worth of BTC, ETH, and fiat currency to financial accounts, including crypto wallets, controlled by DeMarr and others in the U.S. and abroad.
In 2018 when it was time for investors to withdraw their deposits, instead of letting investors withdraw their funds after the locked-in period ended, they were asked to roll over their accounts into an unregistered initial coin offering (ICO) of B2G, the token which they falsely promoted. In reality, the investors never received any digital tokens, and funds from the offering were not used to develop the B2G platform.
The Department of Justice detailed the fraud and added that DeMarr and others also paid various promoters, including an actor famous for martial arts films made in the 1980s and 1990s, Stevan Seagal, to serve as a promoter and celebrity spokesperson. In addition, the company falsely promised that B2G could generate an ‘8000%’ return for investors within one year and that he was a participant in the ICO.
Steven Segal charged by the U.S. Securities and Exchange
The celebrity, Stevan Segal, a martial arts expert, was charged by the U.S. Securities and Exchange Commission (SEC) in February last year to promote the cryptocurrency investment scheme that claimed to be “the next generation of bitcoin in a fraudulent manner. However, Steven Seagal did not disclose if he received any monetary benefit or cryptocurrencies from B2G for marketing its token offerings, such as on Twitter and Facebook.