Blazar Token creator accused of using investor funds for renovating bathroom
Interesting choice, if true. Not a Lamborghini, is it?
Somewhere in New Jersey, glistening new tile sits on fresh grouting, but it was paid for via misappropriated funds from a fraudulent stock and crypto asset investment scheme, or so the US Securities and Exchange Commission claims.
The SEC said in its complaint [PDF] that former New Jersey State Correctional Police Officer John A DeSalvo "promised astronomical returns," including via a scheme involving a crypto asset security that would somehow replace traditional state pension systems. According to the complaint, DeSalvo "targeted law enforcement and first responders."
Separately, or so the agency alleges, DeSalvo misappropriated and misused investor funds raised for the the Blazar Token (no, we hadn't heard of it either), a crypto asset security DeSalvo created in November 2021, but which collapsed in May 2022.
DeSalvo is alleged to have "falsely told investors that Blazar Token was registered with the SEC; that he had arranged for Blazar Token to be purchased by automatic payroll deduction; and that investors were guaranteed to receive extraordinary returns."
Gurbir Grewal, director of the SEC's Division of Enforcement, said in a statement: "What's particularly offensive about this case is that DeSalvo used his status as a former corrections officer to gain the trust of fellow law enforcement personnel, a number of whom invested their savings with him. I am proud that the SEC is able to deliver some measure of justice to those brave first responders who DeSalvo victimized by holding him accountable for his appalling conduct."
The DA alleged DeSalvo claimed to potential investors (on Facebook, naturally): "I have been averaging close to 1,200 percent 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."
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The earlier scheme, dubbed the "E*Trade Invest Group," allowed DeSalvo to raise approximately $95,000 from 17 investors between February 3 and February 10, 2021, the complaint alleges.
In a parallel action, the US Attorney's Office for the District of New Jersey also launched criminal charges against DeSalvo today.
But shortly after depositing the investor funds in his brokerage account, the SEC's complaint claims DeSalvo "lost a significant amount of the money making speculative investments." It alleges he then misappropriated the remaining $78,000 by, among other things, transferring the money to his personal crypto asset wallets and using it to pay a contractor a $10,000 check to complete a bathroom renovation.
The DA has accused the former cop of wire fraud, which carries a maximum potential penalty of 20 years in prison and a fine of $250,000. He was also charged with several counts of securities fraud, carrying a maximum potential penalty of 20 years in prison and a fine of $5 million, as well as counts of money laundering, which carry a maximum potential penalty of 20 years in prison and a fine of $500,000.
Of course the charges and allegations in the criminal complaint are merely accusations, unless and until the person's proven guilty, but if you had money to spend, would redoing the bathroom be at the top of your list?
What if it's a desperate situation, say, you buy a place in northern Europe and the toilet has a poop shelf, a mechanism by which Germany and the Netherlands hope to really make the Bristol Stool Chart work for its money? And would you install an eco-friendly shower or is a space and water-guzzling bath an absolute necessity to soak your weary bones? Answers below. ®