Betrayal In Blue: Former NJ Officer Charged With Crypto Fraud
24 August 2023 - 1:00PM
NEWSBTC
In a major development, the US Securities and Exchange Commission
(SEC) has charged former New Jersey State Correctional Police
Officer, John A. DeSalvo, for allegedly orchestrating a fraudulent
crypto fraud scheme that specifically targeted law enforcement
personnel. DeSalvo stands 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 further alleges misappropriation of investor funds,
including diverting substantial amounts to his crypto asset wallets
and using them for personal expenses, such as a bathroom
renovation. Crypto Scam Targeting Cops? According to the SEC,
DeSalvo managed to raise a minimum of $620,000 from around 220
investors between the launch of the Blazar Token in November 2021
and its subsequent collapse. The complaint reveals that
DeSalvo made “false claims” to investors, stating that the Blazar
Token was registered with the SEC and that it would replace
existing state pension systems. He further “deceived” investors by
falsely assuring them that automatic payroll deductions would
facilitate their investment and guarantee extraordinary
returns. Related Reading: Solana In Turbulence: Analyzing The
Death Cross And What Lies Ahead Ultimately, DeSalvo allegedly
misused and misappropriated the funds entrusted to him. Notably,
the SEC’s complaint highlights DeSalvo’s deliberate targeting of
fellow law enforcement and first responders in his fraudulent
schemes. In addition to the Blazar Token scheme, the SEC’s
complaint also exposes an earlier fraud initiated by DeSalvo.
Beginning in late January 2021, he allegedly solicited investors,
primarily through social media, for an investment venture that
involved trading stocks, options, and crypto asset
securities. Within weeks of raising $95,000 from 17
investors, DeSalvo reportedly lost a significant portion of the
funds through speculative investments and misappropriated the rest.
He proceeded to inform 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. Grewal further emphasized the breach of
trust perpetrated by DeSalvo, who “exploited” his former position
as a corrections officer to gain the confidence of fellow law
enforcement professionals, many of whom invested their
“hard-earned” savings with him. Related Reading: Bitcoin Exchange
Reserve Shoots Up, Pain Not Over Yet? The SEC’s complaint, filed in
the U.S. District Court for the District of New Jersey, charges
DeSalvo with violating antifraud and offering registration
provisions of the securities laws. The SEC seeks injunctive relief,
disgorgement of ill-gotten gains with prejudgment interest, and
imposition of civil penalties. Simultaneously, the U.S. Attorney’s
Office for the District of New Jersey has announced criminal
charges against DeSalvo, further underscoring the severity 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. Featured
image from iStock, chart from TradingView.com
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