The US Securities and Exchange Commission (SEC) has charged John A. DeSalvo, a former New Jersey State Correctional Police Officer, with orchestrating a fraudulent crypto scheme that targeted law enforcement personnel. DeSalvo is accused of raising funds through the unregistered offering of the Blazar Token, a crypto asset he created, which eventually collapsed in May 2022. The SEC's complaint also alleges misappropriation of investor funds, including diverting significant amounts to his crypto wallets and using them for personal expenses, such as a bathroom renovation.
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Crypto Scam Targeting Cops?
The Securities and Exchange Commission (SEC) has accused DeSalvo of raising at least $620,000 from approximately 220 investors through the launch of the Blazar Token in November 2021, which ultimately collapsed. According to the complaint, DeSalvo made false claims to investors that the Blazar Token was registered with the SEC and would replace state pension systems, while also misleading investors by falsely guaranteeing extraordinary returns through automatic payroll deductions. The SEC alleges that DeSalvo deliberately targeted fellow law enforcement and first responders in his fraudulent schemes. The complaint also reveals an earlier fraud initiated by DeSalvo, where he solicited investors through social media for an investment venture involving trading stocks, options, and crypto asset securities, losing a significant portion of the funds through speculative investments and misappropriating the rest. He then informed investors that poor market conditions led to the complete devaluation of the securities.
SEC Accuses Former Officer Of Exploiting Trust
Gurbir S. Grewal, Director of the SEC’s Division of Enforcement, condemned DeSalvo’s actions, stating:
We allege that DeSalvo orchestrated several fraudulent investment schemes that targeted law enforcement personnel and promised astronomical returns, including one involving a crypto asset security that would somehow replace traditional state pension systems. Rather than producing any returns or revolutionary technology, he instead misappropriated and misused investor money.
DeSalvo, a former corrections officer, has been accused of breaching the trust of his fellow law enforcement professionals by using his position to gain their confidence and convince them to invest their hard-earned savings with him. The Securities and Exchange Commission (SEC) has filed a complaint against him for violating antifraud and offering registration provisions of the securities laws. The SEC is seeking injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, and imposition of civil penalties. The U.S. Attorney's Office for the District of New Jersey has also announced criminal charges against DeSalvo, demonstrating the seriousness of the allegations and the commitment to holding him accountable for his actions.
At the time of writing, Bitcoin (BTC) maintains its upward trajectory in price, currently trading at $26,700, reflecting a notable increase of over 3% within the past 24 hours.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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