NJ crypto bro charged in $600K scam targeting cops & firefighters, feds say
💰 A former corrections officer is accused of creating a cryptocurrency for a scam
💰 He sold off 41 billion tokens all at once for $620,000, federal prosecutors said
💰 The token was marketed as a 'crypto pension' for first responders who all lost their money
A former corrections officer from Cape May County is accused of concocting two schemes to scam people including first responders out of hundreds of thousands of dollars using a cryptocurrency he created.
John DeSalvo, 47, of Marmora appeared in a federal court in Newark on Thursday. He is charged with two counts each of wire fraud, securities fraud, and money laundering, U.S. Attorney Philip Sellinger said.
DeSalvo worked for the state Department of Corrections from 1997 to 2010, according to his LinkedIn profile. State records showed he began collecting pension payments on his $96,118.47 salary in 2011 after retiring due to an "accidental disability."
He also owned a tanning salon that was sold in 2004 and worked as a manager for Harrah's Resort & Casino Atlantic City starting in 2011. Then in November 2021 he started a new business venture and created the "Blazar Token" Cryptocurrency, prosecutors said.
The digital token was marketed as a "crypto pension" for first responders such as cops and firefighters that they could use alongside their official government pensions, said James Dennehy, Newark special agent in charge.
“Our investigation shows instead of actually making the rate of return he boasted about, he allegedly used hard-earned money from firefighters, police officers, EMTs and other public servants as his personal bank account," Dennehy said.
DeSalvo made a Twitter profile for the currency and posted updates for several months claiming that it had received approval on different exchanges and even SEC approval, officials said. He then guaranteed rates of return of at least 20% with "ZERO Risk," prosecutors said.
By May 2022, the digital token had raised over $620,000 from more than 200 investors. The same month, DeSalvo sold off 41 billion Blazar Tokens and tanked its value, according to prosecutors. Most of the investors lost all of their money.
"Once DeSalvo got his investors’ money, he is alleged to have spent it on himself, paying personal expenses and funding his own investments," Sellinger said.
The crypto scam was not DeSalvo's first attempt at separating people from their money using illegal tactics, officials said. Prosecutors pointed to an investment group that he managed on the online trading platform Brokerage-1.
DeSalvo is accused of promising unrealistic rates of return to his investors.
"I have been averaging close to 1200 % over the last 2 years. I am in the top 1,000th percent in the world. That’s the truth, the return rates I have been averaging are so high that I have people throwing money at me to invest," DeSalvo said, according to prosecutors.
Around 20 people gave DeSalvo a collective $100,000 that he then transferred to his personal account, authorities said. He's accused of using the funds to pay for contract work on his home and to pay off credit card bills.
Anyone who believes they may have been a victim of DeSalvo is asked to contact the FBI at 1-800-CALL-FBI.