Crypto Fraud – SEC Charges Former New Jersey State Correctional Police Officer

The Securities and Exchange Commission (SEC) has charged former New Jersey State Correctional Police Officer John A. DeSalvo with fraud in relation to the offering of the “Blazer Token,” which the SEC believes is a “crypto asset security.”

At the same time, the US Attorney’s Office for the District of New Jersey today has filed criminal charges against DeSalvo.

The SEC claims that DeSalvo raised at least $620,000 from 220 investors, much of which was used to pay for a bathroom renovation or sent to his personal wallets. Many investors were said to be law enforcement or first responders.

According to the SEC’s complaint, the crypto offering, launched in November 2021, was described as replacing the existing state pension systems. The SEC states that DeSalvo told investors that Blazar Token was registered with the SEC; that he had arranged for Blazar Token to be purchased by automatic payroll deduction; and that investors were guaranteed to receive extraordinary returns.

Gurbir S. Grewal, Director of the SEC’s Division of Enforcement., said that, as alleged, DeSalvo promised astronomical returns but he misappropriated and misused investor money,” instead.

 “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. I am proud that the SEC is able to deliver some measure of justice to those brave first responders who DeSalvo victimized by holding him accountable for his appalling conduct.”

David Hirsch, Chief of the Crypto Assets and Cyber Unit in the SEC’s Division of Enforcement, said that too often in crypto, there are promoters that perpetrate familiar frauds in shiny new wrappers.

The SEC’s complaint seeks injunctive relief, disgorgement plus prejudgment interest, and civil penalties.

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