By: Richard L. Smith
A former New Jersey corrections officer, John DeSalvo, 47, of Linwood, has admitted to leading two major fraud schemes, including a cryptocurrency fraud that cost investors over $600,000, according to U.S. Attorney Philip R. Sellinger.
DeSalvo pleaded guilty to securities fraud charges in federal court, marking a significant crackdown on financial crimes involving digital assets.
DeSalvo's cryptocurrency scheme involved promoting a digital token named “Blazar Token” as a reliable supplement to the pensions of first responders, promising unmatched stability and growth.
Using social media for marketing, he made false claims about the token's approval by regulatory authorities and guaranteed risk-free high returns.
The scheme attracted over 200 investors, raising more than $620,000.
However, DeSalvo misused these funds for personal gains and other unrelated expenses, leading to a significant loss for the investors when he abruptly sold off his tokens, plummeting Blazar's value.
In a separate scheme through an online trading platform named Brokerage-1, DeSalvo managed to solicit around $100,000 from about 20 investors, boasting of his exaggerated investment success.
Similar to the Blazar scheme, the funds were diverted for personal use, leaving investors with significant losses under the guise of adverse market conditions.
This case highlights the vulnerabilities of public servants to fraudulent financial schemes and the justice system's commitment to addressing such crimes.
DeSalvo now faces up to 20 years in prison and fines amounting to $5 million, with his sentencing scheduled for August 6, 2024.
The SEC has also pursued civil actions against DeSalvo for his fraudulent activities.
