Former Lieutenant Charged by SEC for Crypto Scam Targeting Police Officers
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.
Key Points:
- DeSalvo raised $623,388 from 222 investors through sales of his own Blazar token.
- He falsely claimed that Blazar would replace traditional state pension systems for police, firefighters, and paramedics.
- DeSalvo sold 41 billion Blazar tokens upon its debut on decentralized exchange PancakeSwap.
- Investors were barred from selling their tokens while DeSalvo sold, resulting in the collapse of the token’s value.
- The SEC seeks a permanent injunction, civil penalties, and disgorgement of profits against DeSalvo.
DeSalvo allegedly raised funds by promising investors that his Blazar token would revolutionize pension systems for police officers, firefighters, and paramedics. He claimed that the token could be purchased through payroll deduction and compared it to traditional retirement savings plans. However, he never registered the token with the SEC as he falsely claimed. DeSalvo sold a significant portion of the tokens upon its debut, causing a collapse in value and substantial losses for investors. The SEC is now seeking legal action to hold DeSalvo accountable for his actions.
Hot Take: This case highlights the importance of conducting thorough due diligence before investing in cryptocurrencies. It also serves as a reminder that scammers will target specific groups, such as police officers and first responders, to gain their trust and exploit their vulnerabilities.
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