A former corrections officer from New Jersey, John A. DeSalvo, is facing serious allegations from the Securities and Exchange Commission (SEC) for directing a cryptocurrency investment scam that targeted about 220 investors, including law enforcement and first responders. The scheme involved DeSalvo soliciting over $620,000 for a cryptocurrency called Blazar Token, which ultimately collapsed in May 2022.
What makes this case particularly disturbing is that DeSalvo allegedly exploited his former role as a corrections officer to gain the confidence of fellow law enforcement personnel, betraying their trust in the process. The SEC’s complaint asserts that DeSalvo deceitfully presented Blazar Token as officially approved by the SEC and promised extravagant returns. He even went as far as to claim that the token would replace their current pension systems, adding a layer of audacity to his scheme.
DeSalvo’s modus operandi reportedly involved using social media to attract potential investors. After collecting $95,000 from 17 investors, he not only lost a substantial portion of speculative investments but also misappropriated $78,000 for his personal expenses. To make matters worse, he allegedly misled his investors by falsely asserting that their investments had become worthless due to unfavorable market conditions. Shockingly, a portion of the funds was diverted to fund his bathroom renovation.
In response, the SEC is pursuing penalties against DeSalvo and seeking to prevent him from participating in any future cryptocurrency-related ventures. Beyond these regulatory actions, criminal charges have been levied against him. The case not only highlights financial malfeasance but also underscores a breach of trust that impacts law enforcement officers who dedicate their lives to community safety.
There are numerous instances where government authorities have taken advantage of their positions, either by stealing or by making false promises. In a recent report by Todayq News on August 22, 2023, Yi Xiao, a former Chinese official, was given a life prison sentence for corruption, including involvement in cryptocurrency mining. He misused his power to assist crypto mining companies and accepted bribes totaling over 125 million yuan ($17.1 million) from 2008 to 2021. During his tenure as a party secretary in Fuzhou, he supported crypto-mining companies, causing financial harm to public resources.
In another case on May 30, 2023, a South Korean civil servant was found guilty of corruption for embezzling approximately $159,000 in public funds to invest in cryptocurrency. The court sentenced the official to a one-year suspended prison term and two years of probation. The individual, responsible for managing the budget at a welfare center in Ulsan, South Gyeongsang Province, made 41 transfers to steal the money. The official’s identity was withheld for legal reasons.
These are not the only two cases there are many more. Todayq News consistently advises against investing in crypto without sufficient knowledge and warns against making investments based on advice from others.