April 19, 2024
Former New Jersey Corrections Officer Charged in $620,000 Crypto Investment Fraud
Policy & Regulation

Former New Jersey Corrections Officer Charged in $620,000 Crypto Investment Fraud

The Securities and Exchange Commission (SEC) has brought charges against a former New Jersey corrections officer, John A. DeSalvo, for his involvement in a cryptocurrency investment scheme that defrauded numerous law enforcement personnel and first responders.

DeSalvo faces allegations of illicitly raising over $620,000 from around 220 investors through an unregistered cryptocurrency token known as Blazar Token. Unfortunately, this token ultimately collapsed in May 2022. “What’s particularly offensive about this case is that DeSalvo used his status as a former corrections officer to gain the trust of fellow law enforcement personnel, a number of whom invested their savings with him,” stated Gurbir S. Grewal, SEC Director of Enforcement.

The SEC’s complaint outlines that DeSalvo made false assertions, including the claim that Blazar Token was registered and endorsed by the SEC. He also made extravagant promises of exceptionally high returns and suggested that the token could replace existing pension systems.

“Our brave officers put their lives on the line every day to keep our communities safe. To have one of their own betray that trust is unthinkable,” stated James Carter, President of the New Jersey State Police Benevolent Association.

The SEC’s complaint further reveals that DeSalvo actively targeted investors through social media channels. Shockingly, shortly after depositing $95,000, obtained from 17 investors, into his brokerage account, DeSalvo allegedly lost approximately $17,000 of those funds in speculative investments. He then misappropriated the remaining $78,000 and informed investors that their securities had become worthless due to unfavorable market conditions. It was also disclosed that a significant portion of the raised funds was diverted for personal expenses, including funding a bathroom renovation.

In response to these actions, the SEC is seeking financial penalties and a prohibition on DeSalvo’s participation in any future cryptocurrency offerings. Additionally, criminal charges have been initiated in connection with this case.

Image: Freepik

Related posts

FTX Launches Claims Portal That Goes Offline After an Hour

Kevin Wilson

Japan Regulator Clarifies Stance on P2P Crypto

Anna Garcia

Binance Founder CZ Restricted to U.S. Until February Sentencing

Kevin Wilson

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More