John DeMarr, a key player in Kristijan Krstic's cryptocurrency fraud, received a five-year prison sentence on January 31st. He must also pay $3.5 million in restitution to victims.
DeMarr, 58, was indicted in March 2021. He initially pleaded not guilty to four fraud counts. By August 2021, DeMarr changed his plea to guilty on one count of conspiracy to commit securities fraud. The sentence imposed matches the maximum penalty for the charge.
Prosecutors stated DeMarr exploited trusting investors. He encouraged them to increase their stakes, knowing the cryptocurrency ventures and their celebrity endorsements were scams. These schemes funded DeMarr's extravagant lifestyle. Victims lost their entire investments.
Tyler Hatcher, IRS-CI Special Agent-in-Charge, commented on the increasing prevalence of cryptocurrency Ponzi schemes. The IRS Criminal Investigation unit and law enforcement agencies are actively pursuing individuals involved in these fraudulent operations, including those like John DeMarr. Those who profit from such schemes will be identified and held accountable.
Another associate in the Krstic scheme, Jaira David, was sentenced to three years in prison last month. Kristijan Krstic himself has faced indictment twice in the United States. He was arrested in Serbia in July 2020 following an FBI request. During extradition proceedings, Krstic was released pending a final decision from the Serbian government. Shortly after his release under questionable circumstances, Krstic and his wife disappeared. They are currently fugitives.