Man Charged in $11m Crypto Scheme that Featured Steven Seagal

A California man has been charged with securities fraud after allegedly tricking cryptocurrency investors out of millions and using actor Steven Seagal to promote a fake company.

John DeMarr, 55, of Santa Ana, was charged in a complaint filed in the Eastern District of New York. He is said to have conspired with others to defraud victims out of $11.4m by persuading them to invest in dud companies.

The complaint alleged that between 2017 and 2018, DeMarr and others made “false and misleading representations” about two companies: Start Options and B2G.

Start Options was promoted as an online investment platform offering cryptocurrency mining, trading and digital asset trading services. B2G was marketed to investors as an ecosystem that would allow users to trade B2G tokens, use digital wallets and trade digital and traditional currencies “on a secure, comprehensive platform.”

Investors were apparently told that their money would be held for a specified contract period, after which they could withdraw major profits.

In fact, the funds were redirected accounts controlled by DeMarr and others, who used the money to fund lavish purchases of luxury sports cars, jewellery and renovations to DeMarr’s Californian home, according to the Department of Justice (DoJ).

To catch the eye of investors, the co-conspirators are said to have invented celebrity endorsements for Start Options, including a professional athlete whose name and image was used without their permission.

When the end of a Start Options contract approached, they allegedly tried to persuade investors to roll over their accounts into an Initial Coin Offering (ICO) for B2G.

Bizarrely, the scammers are reported to have recruited Steven Seagal, referred to in the DoJ release only as “an actor famous for martial arts films made in the 1980s and 1990s,” to promote B2G.

According to the DoJ, the co-conspirators falsely claimed that B2G could generate an 8000% return for investors within one year, and that Segal was a participant in the ICO. The actor is said to have moved on from the project in March 2018.

Incredibly, DeMarr then staged his own disappearance to avoid facing the wrath of angry investors, according to the complaint.

He’s said to have instructed others to release statements claiming that he had been assaulted and is now missing in Montenegro. However, all the while he’s believed to have been in California.

Seagal is reported to have settled with the FTC last year for his role in the ICO.