The US Securities and Exchange Commission (SEC) has brought charges against a former New Jersey State Correctional Police officer named John A. DeSalvo. The charges stem from an alleged fraudulent “Blazar Token” cryptocurrency ponzi scheme targeting law enforcement personnel.
According to an August 23 press release from the agency, DeSalvo is accused of orchestrating a deceptive plan involving Blazar Token, which promised substantial returns to investors.
Instead of delivering on these promises, DeSalvo reportedly misappropriated the funds for personal use and to repay earlier investors, leading to substantial losses for those involved.
The accused faces allegations of conducting two separate fraud schemes, each with its own charges. The first scheme involves creating and promoting the “Blazar Token.” This digital token was pitched to police officers, firefighters, EMTs, and other first responders as a cryptocurrency-based pension supplement.
Deceptive Crypto Promises Through Blazar Token
He reportedly assured investors of the token’s legitimacy and even guaranteed returns of over 20 percent with no risk. However, the SEC claims that DeSalvo misused the funds for personal expenses and speculative cryptocurrency trading.
The second scheme, called the “Brokerage-1 Fraud,” saw DeSalvo solicit investments through an online trading platform. He falsely presented himself as a highly successful investor, attracting around $100,000 from approximately 20 individuals.
Similar to the previous scheme, these funds were allegedly misused for non-investment purposes, including personal trading and payments unrelated to the promised investments.
Furthermore, the SEC also stated that DeSalvo had engaged in an unrelated fraud in January 2021. He used social media to reach out to investors there, promising to invest their money in stocks, options, and crypto assets. Of the $95,000 he raised, he allegedly lost over $17,000 before misusing the remaining $78,000. He falsely claimed that the assets had lost all of their value due to unfavorable market circumstances.
The charges against John A. DeSalvo include counts of wire fraud, securities fraud, and money laundering. If found guilty, he could face substantial penalties, including fines and imprisonment. The SEC is seeking to hold DeSalvo accountable for his actions through injunctions and financial penalties.
Meanwhile, FBI-Newark Special Agent in Charge James E. Dennehy shed light on DeSalvo’s alleged manipulation of first responders by marketing the cryptocurrency as a pension supplement. Dennehy urged potential victims to come forward if they believed they were victimized by DeSalvo’s actions.