A former correctional officer admitted Monday to orchestrating two different scams, including a cryptocurrency scam that targeted first responders and cost victims more than $600,000, federal prosecutors announced Tuesday.
John DeSalvo, 47, of Lynwood, pleaded guilty in Newark federal court to two counts of securities fraud, according to a statement from the New Jersey U.S. Attorney's Office.
In 2021, DeSalvo created digital tokens he called “Blazer tokens” and sold them on social media to police, fire officials, EMTs and other first responders with the promise of supplementing their pension plans, the department said. That's what it means.
He told investors that Blazer offers “more stability than any other token” and that Blazer's value “continues to rise over time, like any other investment fund, but with a much higher success rate.” “Expensive,” authorities said.
He told potential investors that returns of more than 20% are guaranteed with zero risk, and that the coin has been approved by the Securities and Exchange Commission and will be available for purchase on major exchanges, among other things. Investigators said the company deceived investors with a series of false statements. He said.
Officials said DeSalvo received about $620,000 from investors and frequently moved the funds into personal accounts.
According to a previously released criminal complaint, he sold more than 41 billion tokens in May 2022, causing the currency's price to plummet, and making an initial investment worth $1,000 worth about $1.15. It is said that his eyesight has decreased. Blazer's value never recovered, and most investors lost their entire investments.
In the second scheme, which occurred around the same time as the cryptocurrency scheme, DeSalvo established an online investment group and promoted it on social media, the firm said.
Investigators say the suspect falsely boasted to potential investors about his investment skills, claiming he had averaged about 1,200% return over two years.
After receiving approximately $100,000 from members of the group, he transferred the funds to a personal account and notified investors that the losses were due to poor market conditions, according to the release.
The funds DeSalvo withdrew in the two frauds were used for personal expenses, day-trading high-risk cryptocurrencies, credit card bills, payments to contractors who performed work on his home, and in Ponzi-like schemes. was used to pay previous investors. filed a criminal complaint.
DeSalvo is scheduled to be sentenced on August 6, and could face up to 20 years in prison and a $5 million fine, the agency said.
DeSalvo worked for the New Jersey Department of Corrections for 13 years before retiring in 2010, said department spokeswoman Amy Z. Quinn.
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Chris Sheldon can be contacted at: csheldon@njadvancemedia.com.
