BROOKLYN, NY — John DeMarr, a U.S. promoter of foreign cryptocurrency companies, was sentenced to 60 months in federal prison today for his role in a sprawling securities fraud scheme that ripped off millions from unsuspecting investors. U.S. District Judge LaShann DeArcy Hall handed down the sentence in Brooklyn, where DeMarr also received a forfeiture order of $3,513,305.41—cash and assets traced directly to the scam.
DeMarr, who pleaded guilty in July 2021 to one count of conspiracy to commit securities fraud, built his empire on lies. He pitched two fake digital asset ventures—Start Options and B2G—as revolutionary platforms for crypto mining, trading, and digital wallet staking. In reality, no such operations existed. Investor funds were never deployed. Instead, they flowed into accounts DeMarr controlled and were funneled into a lavish lifestyle: a Porsche, luxury jewelry, and a full-scale remodel of his California home.
The scam relied heavily on deception and celebrity bait-and-switch. Start Options falsely claimed endorsements from high-profile figures, including a professional athlete whose name and likeness were used without consent. DeMarr also paid a martial arts film actor from the 1980s and 1990s to promote the scheme, lending it false credibility. Investors, believing they were backing a cutting-edge crypto platform, wired millions in Bitcoin, Ethereum, and fiat currency to wallets managed by DeMarr and his co-conspirators.
When investors tried to cash out in January 2018, they hit a wall. DeMarr and his associates blocked withdrawals and forced account rollovers into B2G’s unregistered initial coin offering (ICO). No tokens were ever issued. No platform was built. The money disappeared—diverted to personal expenses and shell transactions across U.S. and international accounts. Thousands were left holding digital air.
“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,” said Breon Peace, U.S. Attorney for the Eastern District of New York. “The victims ultimately lost everything, so it is appropriate that DeMarr lose his freedom for concocting this fraud.”
IRS-CI and FBI investigators tore apart the scheme over months of forensic tracking. “Cryptocurrency schemes are on the rise,” said IRS-CI Special Agent-in-Charge Tyler Hatcher. “DeMarr, a promoter of several digital asset-related companies, conspired with others to defraud victims and made misleading representations for significant profits. Those who line their pockets with profits from these schemes should know they will not go undetected and will be held accountable.” The case was jointly prosecuted by the Justice Department’s Criminal Division and the Eastern District of New York.
Related Federal Cases
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Key Facts
- State: New York
- Agency: DOJ USAO
- Category: Fraud & Financial Crimes
- Source: Official Source ↗
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