Please ensure Javascript is enabled for purposes of website accessibility
Feds Say California Man Behind $11 Million Bitcoin Fraud Scheme
News
By News
Published 3 years ago on
February 2, 2021

Share

A California man was charged in a complaint unsealed Monday for his alleged participation in a coordinated cryptocurrency and securities fraud scheme that used purported digital currency platforms and foreign-based financial accounts, the U.S. Department of Justice announced.

John DeMarr, 55, of Santa Ana, was charged in a complaint filed in the Eastern District of New York with one count of conspiracy to commit securities fraud.

According to the complaint, DeMarr and others falsely claimed that investor funds would be invested in digital asset mining and trading platforms that would earn them massive profits. But the Justice Department alleges that 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 renovations to DeMarr’s home in California.

The complaint also alleges that DeMarr staged his own disappearance to avoid facing disgruntled B2G investors. DeMarr instructed others to release statements asserting that he had been assaulted and went missing in Montenegro, and telling investors to stop attempting to contact DeMarr or his family regarding their inability to have their investment money returned. But investigators believed DeMarr was residing in California.

“The indictment alleges an elaborate scheme in which the defendant conspired to lure unsuspecting investors with fraudulent promises of large returns in the cryptocurrency market, only to divert millions of dollars for his own personal use,” said Acting Assistant Attorney General Nicholas L. McQuaid of the Justice Department’s Criminal Division. “While the technologies and methods are constantly changing, the Criminal Division’s commitment to aggressively pursuing fraud in all its forms remains unchanged.”

‘A Mirage Costing Investors Millions’

“Mr. DeMarr created an elaborate cryptocurrency scheme, complete with high-profile endorsements and incredibly large returns that proved to be a mirage costing investors millions,” said Assistant Director in Charge Kristi K. Johnson of the FBI’s Los Angeles Field Office. “Mr. DeMarr is now in custody and no longer spending his victims’ money, nor hiding from justice by faking his own disappearance.”

The complaint alleges that between 2017 and 2018, DeMarr conspired with others to defraud numerous victims of $11.4 million by inducing them to invest in their companies, “Start Options” and “B2G,” based on 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.”

According to the allegations, however, both Start Options and B2G were fraudulent. In approximately December 2017, the complaint alleges, DeMarr and others began offering securities in the form of investment contracts to U.S. and international investors through the Start Options website. Investments were accepted in Bitcoin, U.S. dollars, or Euros. To participate, investors had to deposit their funds for a specified contract period, after which they could purportedly withdraw their money at a significant profit.

Start Options allegedly featured celebrity endorsements to promote its securities offerings, but a professional athlete who purportedly endorsed Start Options had no involvement with it, and his name and likeness were used without his consent.

The complaint also alleges that DeMarr and others created false press releases and whitepapers about B2G, fabricated B2G account statements, and refused to allow investors to withdraw their money.

[activecampaign form=29]

RELATED TOPICS:

DON'T MISS

Surprising Ways and Places You Can Use SNAP EBT Food Benefits

DON'T MISS

Californians Worry About Crime, Setting up a Ballot Measure Showdown

DON'T MISS

The Pickle Flavor Frenzy and Its Rise in Food Trends

DON'T MISS

Kate Hudson Had a Lifetime to Make a Record. The Result is ‘Glorious,’ Out in May

DON'T MISS

Long-Lost First Model of USS Enterprise from ‘Star Trek’ Boldly Goes Home

DON'T MISS

California Leaders Take Sides in Monumental Supreme Court Case on Homelessness

DON'T MISS

Man Sets Himself on Fire Outside Trump Hush Money Trial Court

DON'T MISS

McDonald’s Ice Cream Machines Are So Unreliable They’re a Meme. They Might Also Be a Climate Solution.

DON'T MISS

Real Estate Experts Talk Fresno’s Economic Future. Are Tough Times Ahead?

DON'T MISS

Unlocking the Secrets to Fresno State’s Superb Baseball Season

UP NEXT

Californians Worry About Crime, Setting up a Ballot Measure Showdown

UP NEXT

The Pickle Flavor Frenzy and Its Rise in Food Trends

UP NEXT

Kate Hudson Had a Lifetime to Make a Record. The Result is ‘Glorious,’ Out in May

UP NEXT

Long-Lost First Model of USS Enterprise from ‘Star Trek’ Boldly Goes Home

UP NEXT

California Leaders Take Sides in Monumental Supreme Court Case on Homelessness

UP NEXT

Man Sets Himself on Fire Outside Trump Hush Money Trial Court

UP NEXT

McDonald’s Ice Cream Machines Are So Unreliable They’re a Meme. They Might Also Be a Climate Solution.

UP NEXT

Real Estate Experts Talk Fresno’s Economic Future. Are Tough Times Ahead?

UP NEXT

Unlocking the Secrets to Fresno State’s Superb Baseball Season

UP NEXT

Does Dyer Support (or Endorse) Bredefeld for Supervisor?

Kate Hudson Had a Lifetime to Make a Record. The Result is ‘Glorious,’ Out in May

1 day ago

Long-Lost First Model of USS Enterprise from ‘Star Trek’ Boldly Goes Home

1 day ago

California Leaders Take Sides in Monumental Supreme Court Case on Homelessness

1 day ago

Man Sets Himself on Fire Outside Trump Hush Money Trial Court

2 days ago

McDonald’s Ice Cream Machines Are So Unreliable They’re a Meme. They Might Also Be a Climate Solution.

2 days ago

Real Estate Experts Talk Fresno’s Economic Future. Are Tough Times Ahead?

2 days ago

Unlocking the Secrets to Fresno State’s Superb Baseball Season

2 days ago

‘This Is How to Improve Reading Proficiency. We Just Have To Execute It’: FUSD Board President

2 days ago

Does Dyer Support (or Endorse) Bredefeld for Supervisor?

2 days ago

Get a 3D First Look at Merced’s High-Speed Rail Station Design

2 days ago

Surprising Ways and Places You Can Use SNAP EBT Food Benefits

Did you know that SNAP EBT benefits used to be called food stamps and that recipients can use those benefits to get healthy food in places o...

5 hours ago

5 hours ago

Surprising Ways and Places You Can Use SNAP EBT Food Benefits

5 hours ago

Californians Worry About Crime, Setting up a Ballot Measure Showdown

1 day ago

The Pickle Flavor Frenzy and Its Rise in Food Trends

1 day ago

Kate Hudson Had a Lifetime to Make a Record. The Result is ‘Glorious,’ Out in May

1 day ago

Long-Lost First Model of USS Enterprise from ‘Star Trek’ Boldly Goes Home

1 day ago

California Leaders Take Sides in Monumental Supreme Court Case on Homelessness

2 days ago

Man Sets Himself on Fire Outside Trump Hush Money Trial Court

2 days ago

McDonald’s Ice Cream Machines Are So Unreliable They’re a Meme. They Might Also Be a Climate Solution.

MENU

CONNECT WITH US

Search

Send this to a friend