The U.S. Securities and Exchange Commission said on Aug. 23 that it had charged a former New Jersey correctional officer “with fraudulently raising funds through the unregistered offering of the blazar token.” The Commission said the correctional officer’s scam was primarily targeted at law enforcement agents and first responders.
Replacing the State Pension System With Blazar Token
The U.S. Securities and Exchange Commission (SEC) announced on Aug. 23 that it has charged John DeSalvo, a former New Jersey correctional officer, “with fraudulently raising funds through the unregistered offering of the blazar token.” The SEC alleged that by selling the now-defunct token, DeSalvo was able to raise $620,000 from approximately 220 investors.
As explained in a statement released by the SEC, the former correctional officer primarily targeted law enforcement agents and first responders. In addition to falsely claiming that the token was registered with the SEC, DeSalvo told investors that the blazar coin “would replace existing state pension systems.” To further entice his victims, DeSalvo is said to have promised guaranteed high returns to investors who agreed to buy the token via an “automatic” deduction from their salary.
However, instead of using the capital raised to prop up the project, the former correctional officer allegedly misappropriated the funds. He also transferred some of the funds to crypto wallets that he controlled.
Criminals Duping Victims With Scams ‘in Shiny Wrappers’
Commenting on the Commission’s decision to charge the former correctional officer, Gurbir S. Grewal, the director of the SEC’s Division of Enforcement, decried how DeSalvo used his past status as a government employee to dupe investors.
“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,” Grewal said.
David Hirsch, another member of the SEC’s Division of Enforcement, said the former correctional officer’s fraudulent activities showed that investors are still vulnerable to scams especially when they appear “in shiny new wrappers.”
Meanwhile, in addition to fleecing investors with the blazar token, DeSalvo is also accused of misappropriating $78,000 out of the $95,000 that he raised from participants of another investment venture. The remaining $17,000 was lost in speculative investments, the SEC said.
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