SEC charges former corrections officer for role in bizarre crypto scam
John A. DeSalvo, a former lieutenant at the New Jersey Department of Corrections, has been charged by the U.S. Securities and Exchange Commission (SEC) for orchestrating a crypto scam that specifically targeted police officers and first responders.
According to the Aug. 23 announcement, DeSalvo allegedly raised $623,388 from 222 investors through sales of his own Blazar token from November 2021 to May 2022. DeSalvo proclaimed Blazar would "replace traditional state pension systems" for police, firefighters, and paramedics alike, thereby providing lucrative returns. DeSalvo allegedly told investors:
While soliciting investors, De Salvo falsely stated: "We became a securitized token with the SEC," despite never attaining registration with the regulatory body. Despite telling investors there was an initial "lock-up" period for insiders, DeSalvo sold 41 billion Blazar tokens, worth $51,000 at the time, upon its debut on decentralized exchange PancakeSwap in May 2022.
Investors were barred from selling their Blazar tokens while DeSalvo sold. By May 22, the Blazar token had lost more than 99.9% of its value, less than two weeks after DeSalvo's PancakeSwap sale. The SEC wrote:
The SEC seeks a permanent injunction against DeSalvo barring him from security offerings, as well as civil penalties and disgorgement of profits.
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