A former New Jersey corrections officer has been charged by the Securities and Exchange Commission with defrauding hundreds of law enforcement personnel and first responders in a cryptocurrency investment scheme.
John A. DeSalvo was charged on Wednesday with illegally raising over $620,000 from about 220 investors through an unregistered crypto token called Blazar Token, which 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,” said Gurbir S. Grewal, SEC Director of Enforcement.
According to the SEC complaint, DeSalvo falsely claimed Blazar Token was registered and approved by the agency. He also promised extraordinarily high returns and claimed the token would 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,” said James Carter, President of the New Jersey State Police Benevolent Association.
The SEC alleges DeSalvo targeted investors through social media.
Within weeks of depositing the $95,000 he raised from 17 investors into his brokerage account, the SEC says, DeSalvo lost about $17,000 of those funds in speculative investments, misappropriated the remaining $78,000, and told investors that the group’s securities had lost all value due to poor market conditions.
He spent much of the raised funds on personal expenses, including a bathroom renovation.
The SEC seeks financial penalties and a ban on participating in any future cryptocurrency offerings. Criminal charges have also been filed.
