NEWS – “without comment”
FBI arrest a PI come crypto-fraudster accusing of bilking investors out of millions
By Noah Goldberg
New York Daily News
Feb 01, 2021
A California private eye played on the Bitcoin craze to create a sleazy cryptocurrency scheme and defraud investors out of millions of dollars — money that was actually used to fund his own lavish lifestyle, federal authorities alleged Monday.
John DeMarr, 55, a California private detective, was arrested Monday by FBI agents for his role in launching a company called “Bitcoiin” in 2018, which offered people fake cryptocurrency investment opportunities on its website. The company also claimed to have created its own cryptocurrency called “Bitcoiin2Gen” and was promoted by actor Steven Seagal, the feds said.
The group also used former NBA player Andrew Bogut to advertise to investors, though Bogut was completely unaware he was being used to advertise the company, according to a law enforcement source.
He was charged in Brooklyn Federal Court, though his initial appearance is before a judge is in California.
The company started selling investment contracts in late 2017, telling people they needed to leave their money in for two to three months, after which they could reap “significant profits,” the feds said.
Bitcoiin guaranteed profits and said it would invest the money in “digital asset mining and digital asset trading platforms,” according to prosecutors.
But company just moved the money into the bank accounts of the people who ran it, the feds said.
When one investor caught on that the company was a scam and posted about it on a blog, DeMarr freaked out, according to court papers filed by an IRS agent.
“See below — we need to fix this or this guy will hurt us! Call me,” DeMarr wrote to a co-conspirator.
Over a two-month period from December 2017 to January 2018, investors poured in more than $4 million, thinking they’d make huge profits in crypto investments.
“In reality, virtually all of the proceeds of the B2G ICO [initial coin offering] were used to make payments to the principals of Bitcoiin, including the defendant,” prosecutors said.
As investors became increasingly upset that they could not take their money out of Bitcoiin, DeMarr decided to fake his own disappearance instead of ‘fessing up to his fraudulent scheme, the feds said.
He told one of his co-conspirators to release a statement saying that DeMarr had been assaulted and gone missing in Montenegro.
He used the significant funds he got from the scheme to buy himself a Porsche and to fix up his California house, authorities alleged.
By kind consent of Bill Elliott, CCDI, CLI®, CII, CFI-FTER
Board Certified Criminal Defense Investigator
ELLIOTT & ASSOCIATES, Ltd. (GMT -7)
Albuquerque, New Mexico USA