“Private investigator” John DeMarr, 55, was accused of organizing a fraudulent investment scheme and trick people into investing in their fake cryptocurrency, in addition to hiring actor Steven Seagal to promote the “company” as a brand ambassador.
DeMarr is accused of collecting $ 11.4 million of victims of his fraud scheme that operated during 2017 and 2018. To mislead investors, DeMarr created two fake transactions. Start Options, a cryptocurrency investment platform, in addition to cryptocurrency Bitcoiin 2 Gen (B2G), where he describes it as the “second generation of Bitcoin […] More superior and more advanced than the original Bitcoin version ”.
DeMarr’s professional website, as well as B2G’s website, are offline. But the website press releases B2G and the social networks of the accused and companies are online. On the website, DeMarr describes the cryptocurrency as a self-sustainable alternative to the original Bitcoin as it offers a mining and investment ecosystem of its own.
“Bitcoiin 2Gen is the complete currency […] At launch it provides its own ecosystem, its own wallet, its own mining machines and the ability to exchange the currency for popular alternative currencies or FIAT currencies. Bitcoiin 2 Gen uses the Ethereum blockchain, which is a more secure and faster blockchain than the Bitcoin blockchain, ”he says.
B2G is proud to announce worldwide use of B2G for the B2G community! B2G is currently in the integration process and will be accepted at all Serviced Apartments owned by the Worldwide Venice Group! Special offers will be available when you pay using B2G! Stay tuned!
– Bitcoiin2Gen (@ bitcoiin2gen) April 11, 2019
Kristi Koons Johnson, special agent of the FBI, says that the scheme was built in a thorough way to give credibility. “DeMarr created an elaborate cryptocurrency scheme, complete with high-profile endorsements and incredibly large returns that proved to be a mirage that cost investors millions. He is now in custody and no longer spends the money of its victims, nor does it hide from justice by pretending its own disappearance”, Says the agent in a note from the US Department of Justice (DOJ).
DeMerr offers subpoena delivery services, in addition to private investigation. In cases of delivery of subpoenas, he films people and posts the videos on their social networks. “You have been served”, Says in all videos.
As FBI special agent Kristi Johnson explains, DeMarr’s criminal scheme was built with attention to every detail, to give you the greatest possible confidence. The accused carried out elaborate marketing and communication work and even hired Hollywood actor Steven Seagal to promote fraud.
When searching for “Bitcoiin2Gen” it is possible to find several traditional media outlets (Wall Street Journal, CNBC, Telegraph, Cointelegraph and many others) publicizing the scheme, mainly stating that the actor, Steven Seagal, became the brand ambassador. B2G is still listed on cryptocurrency quotation sites, but with values almost zero since August 2019. But in February 2019, the cryptocurrency unit came to cost $ 0.70.
Steven Seagal, was charged with promoting an initial cryptocurrency offering (ICO) in 2018, in addition to do not disclose that you have received payments for promoting a fraudulent cryptocurrency investment scheme.
According to the U.S. Securities and Exchange Commission, Seagal would have received $ 250,000 in cash plus the equivalent of $ 750,000 in B2G units, in exchange for publicizing and promoting the brand, in addition to publishing a press release with the title “Zen master, Steven Seagal, becomes ambassador for Bitcoiin2Gen”.
The committee reports that the Hollywood actor violated federal advertising laws and agreed to pay $ 157,000 as a fine, in addition to being prohibited from disclosing such schemes for three years.
The B2G saga
According to the DOJ, DeMerr began its fraudulent operations in December 2017, offering investment contracts to interested parties worldwide, through the Start Options website. Victims deposited amounts in Bitcoin, US Dollar and Euros, with the promise of receiving generous profits (up to “8000%”) after about a year.
“In fact, the money was never invested and instead, it was diverted to accounts controlled by DeMarr and others and used in various personal expeditions, including buying a Porsche, jewelry and renovations to DeMarr’s California home”Writes the DOJ.
Investors noticed the fraud in late January 2018, when they received no money and went after DeMarr, but did not find him. The accused disappeared, but he soon informed investors that he had been kidnapped and assaulted and that he could not return the money. He even asked them to stop looking for his family.
“DeMarr instructed others to release statements saying that he had been kidnapped and disappeared in Montenegro, telling B2G investors to stop trying to contact DeMarr or his family regarding the impossibility of returning the money invested in B2G. In fact, however, DeMarr did not disappear in Montenegro, and instead he was believed to reside in California, ”says the DOJ.
According to the DOJ, DeMarr attended a hearing with Judge John D, Early, of California on Monday (01). The judge referred the case to the Eastern District Court in New York. DeMerr pleads not guilty until proven otherwise. The FBI and DOJ continue to investigate the case.