Crypto scam: A retired correction officer charged as defrauded $600,000

“In one scheme, DeSalvo is alleged to have targeted law enforcement and first responders to invest in a digital token that he falsely claimed was SEC-approved and listed on cryptocurrency exchanges.”

 

 

Attorney Philip R. Sellinger said a former corrections officer was arrested Wednesday for running a cryptocurrency scam that defrauded first responders of more than $600,000, US 

John DeSalvo, 47, of Upper Township is also accused of soliciting up to $100,000 from members of an online investment group in the same scam. In both cases, he cut most of the money he would have spent on unrelated expenses, officials said.

He was charged with two counts each of wire fraud, bank fraud and embezzlement and is scheduled to appear in federal court in Newark on Wednesday afternoon.

DeSalvo was accused of creating the Blazar Token in 2021 and marketing it to first responders on social media, promising them it would supplement their retirement plans. It told potential investors that they were getting a return of more than 20% with zero risk and misled them with several false statements, including saying that the coin was approved by the Securities and Exchange Commission as well. and it will be available for purchase in the main. stock exchange. authorities said.

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DeSalvo received about $620,000 from investors and often transferred the money to his own account, officials said. "Our investigation shows that instead of getting the rate of return he was boasting about, he allegedly used hard money from firefighters, police, health workers and other government officials. to his personal bank account," said FBI – Newark Special Agent in Charge James E. Dennehy. He is also accused of selling more than 41 billion shares in May 2022, causing the value of the currency to fall. Following the sale, the initial $1,000 investment was worth about $1.15, according to the criminal complaint. Around the same time as the crypto project, DeSalvo started an online investment group that he also advertised on social media, authorities said. Analysts said he falsely bragged about his investment prowess to potential investors, saying he had racked up a 1,200% return in two years. He received about $100,000 from the group before transferring the money to his own account and telling investors their losses were due to poor market conditions, officials said.

The money which DeSalvo withdrew from two scams was used for personal expenses, high-risk cryptocurrency day trading, credit cards, payments to contractors who worked on his home, and payments to previous investors as part of a Ponzi scheme. , according to the criminal complaint. 

“This defendant, a former New Jersey corrections officer, is alleged to have committed two brazen investment fraud schemes in which he falsely promised huge returns to obtain hundreds of thousands of dollars from unsuspecting investors,” Sellinger said. “In one scheme, DeSalvo is alleged to have targeted law enforcement and first responders to invest in a digital token that he falsely claimed was SEC-approved and listed on cryptocurrency exchanges.”

 DeSalvo worked for the New Jersey Department of Corrections for 13 years before retiring in 2010, according to Amy Z. Quinn, a company spokesman.

Authorities accused DeSalvo of providing false accounting records to investors. The U.S. Securities and Exchange Commission also filed a civil lawsuit against him on Wednesday.

(source: correction1.com)