The U.S. Securities and Exchange Commission (SEC) recently filed charges against John DeSalvo, the mastermind behind Blazar Token, a minor cryptocurrency. DeSalvo managed to raise a significant amount of money from investors before the collapse of the token. This article delves into the details of DeSalvo’s fraudulent scheme, how he targeted specific individuals, and the legal actions being taken against him.
DeSalvo, a former State Correctional Police Officer in New Jersey, devised an elaborate plan to market Blazar Token as a potential replacement for existing state pension systems. He gained the trust of his target audience, which primarily consisted of law enforcement and first responders, leveraging his background as a former corrections officer. By touting the benefits of his token and its convenience for purchasing through automatic payroll deductions, DeSalvo successfully attracted 220 investors who contributed a total of $620,000.
The SEC alleged that DeSalvo made false guarantees of extraordinary returns on investments and claimed that Blazar Token was properly registered. These claims turned out to be empty promises, as the token eventually collapsed in May 2022. Worse still, DeSalvo misused and misappropriated investor funds for personal gain. The SEC revealed that DeSalvo diverted these funds to his own cryptocurrency wallet and even used a portion of them to finance a bathroom renovation.
Previous Unrelated Scheme
This isn’t the first time DeSalvo has been involved in fraudulent activities. The SEC discovered that in January 2021, he targeted investors through social media, promising to invest their funds in various financial instruments, including stocks, options, and crypto assets. However, DeSalvo suffered significant losses from these investments, resulting in a loss of $17,000 out of the $95,000 he initially raised. Rather than admitting to his failure, he misappropriated the remaining $78,000 and falsely attributed the losses to poor market conditions.
As a result of his fraudulent activities, DeSalvo now faces charges from both the SEC and the U.S. Attorney’s Office for the District of New Jersey. The SEC is pursuing injunctive relief, disgorgement, prejudgment interest, and civil penalties, seeking to hold DeSalvo accountable for his actions. The criminal charges brought by the U.S. Attorney’s Office include counts of wire fraud, securities fraud, and money laundering.
DeSalvo’s charges add to the ever-growing list of projects, companies, and individuals targeted by U.S. regulatory authorities in recent years. The crackdown reflects the government’s determination to protect investors and maintain the integrity of the financial markets. Authorities are taking serious action against individuals like DeSalvo, who exploit trust and manipulate financial systems for personal gain.
The case of John DeSalvo and Blazar Token serves as a reminder of the risks associated with investing in cryptocurrencies and the importance of thorough due diligence. Investors must exercise caution and skepticism, especially when presented with promises of extraordinary returns. The regulatory authorities play a vital role in identifying and prosecuting fraudulent schemes, but it is crucial for individuals to remain vigilant and protect themselves against potential scams.