In an unexpected turn of events, the US Securities and Exchange Commission (SEC) has cast its spotlight on former New Jersey State Correctional Police Officer, John A. DeSalvo, accusing him of masterminding a deceptive cryptocurrency venture. The distinctive feature of this scam? It specifically aimed its deceptive tactics at law enforcement officers.
DeSalvo allegedly spearheaded a dubious crypto fundraising exercise surrounding the Blazar Token – a cryptocurrency of his own creation. Despite its grandiose launch in November 2021, the Blazar Token saw its untimely downfall in May 2022. The unfolding SEC complaint unveils that DeSalvo didn’t just stop at mere fund collection. He is also alleged to have misappropriated significant sums, directing these towards his cryptocurrency wallets and even funding his personal indulgences, including a luxury bathroom renovation.
During the existence of the Blazar Token, DeSalvo is said to have managed to attract an estimated $620,000 from roughly 220 unsuspecting investors. However, it was his pitch that raised eyebrows. Investors were falsely led to believe that the Blazar Token was not only registered with the SEC but was also poised to replace existing state pension structures. Furthermore, he wooed them with promises of easy automatic payroll deductions and dazzling returns on their investments.
The complaint delineates DeSalvo’s intentional predatory focus on his peers – fellow officers of the law and emergency responders.
But the Blazar debacle was not DeSalvo’s maiden venture into the world of fraudulent schemes. Early in 2021, DeSalvo purportedly enticed potential investors, mainly via social media, for a venture that promised to trade in stocks, options, and other crypto assets. However, after garnering $95,000 from 17 investors, it’s reported that a combination of reckless investments and misappropriation led him to claim that unfavorable market conditions rendered their securities worthless.
Gurbir S. Grewal, Director of the SEC’s Enforcement Division, expressed his disdain for DeSalvo’s alleged ventures, noting that DeSalvo capitalized on his role as a corrections officer, betraying the trust of his fellow officers. The betrayal extended so deep that many had entrusted their life savings to him.
The charges against DeSalvo, filed in New Jersey, not only implicate him for antifraud and offering registration violations but also see the SEC pushing for stringent punitive measures. Additionally, the U.S. Attorney’s Office for New Jersey has thrown its hat in the ring, emphasizing the magnitude of the allegations.
On a side note, for crypto enthusiasts, Bitcoin (BTC) continues its positive ascent, presently marked at $26,700, seeing a commendable 3% growth in just 24 hours.
