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Cryptocurrency Scammer Lands 5-Year Sentence
John DeMarr, 55, of Santa Ana, California, has pleaded guilty to participating in a coordinated cryptocurrency and securities fraud scheme through purported digital currency platforms and foreign-based financial accounts.
As part of his guilty plea, DeMarr admitted that he conspired with others to defraud investor victims by inducing them to invest in their companies, ‘Start Options’ and ‘B2G,’ based on materially false and misleading representations. Start Options purported to be an online investment platform that provided cryptocurrency mining, trading, and digital asset trading services. B2G was purportedly an ‘ecosystem’ that would allow users to trade B2G tokens, provide digital wallet staking, and trade digital and fiat currencies ‘on a secure, comprehensive platform.’
DeMarr and others falsely claimed that investor funds would be invested in digital asset mining and trading platforms that would earn them massive profits. In truth, however, the money was never invested and was instead diverted to accounts controlled by DeMarr and others and used for various personal expenditures, including the purchase of a Porsche, jewelry, and to remodel DeMarr’s home in California.
Start Options also claimed to feature celebrity endorsements to promote its securities offerings. For example, Start Options falsely represented that a professional athlete had endorsed Start Options when, in fact, the athlete was not involved with Start Options and his name and likeness were used without his consent. Based on this and other fraudulent promotional materials, investors sent millions of dollars’ worth of Bitcoin, Ethereum, and fiat currency to financial accounts, including cryptowallets, controlled by DeMarr and others in the U.S. and abroad.
DeMarr pleaded guilty to one count of conspiracy to commit securities fraud and is scheduled to be sentenced on January 4, 2022. DeMarr faces a maximum sentence of five years in prison. A federal district court judge will determine any sentence after considering the U.S. Sentencing Guidelines and other statutory factors.
Assistant Attorney General Kenneth A. Polite Jr. stated, ‘The defendant’s scheme preyed on unsuspecting investors, causing significant financial harm. We are committed to holding accountable those who engage in such egregious financial crimes.’
Key Facts
- State: California
- Category: White Collar Crime|Cybercrime|Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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