A former corrections officer from South Jersey has admitted to orchestrating two different fraud schemes and now potentially faces decades behind bars.

Federal authorities say earlier this week, 47-year-old John DeSalvo of Linwood pleaded guilty in Newark federal court to two counts of securities fraud.

First Responders Were Victims

FBI–Newark Special Agent in Charge James E. Dennehy said in a statement,

DeSalvo admits his role in two fraud schemes, one of which involved him creating and marketing a crypto token to first responders that could supplement their existing pensions. Police officers, firefighters, EMTs, and other first responders show up each day to serve and protect, hoping their hard-earned pensions will allow for a nice retirement one day. Many of his victims ended up losing their entire investments. He's now facing the justice he deserves.

"The Blazar Token Fraud"

Officials say DeSalvo was the creator and promoter of a digital token known as “Blazar Token,” which he marketed to police, fire personnel, EMTs, and other first responders as a “crypto pension” that could be used to supplement their existing pension plans.

Cryptocurrency Scam - Photo: Canva
Cryptocurrency Scam - Photo: Canva

Beginning in late 2021, DeSalvo used social media platforms to fraudulently solicit investments in Blazar through a series of misrepresentations, including a claim that investors were guaranteed a 20 percent or more return with “ZERO risk.”

In total, he raised over $620,000 from more than 200 investors in Blazar. He then used that money for various illicit purposes unrelated to Blazar, including personal expenses.

In May 2022, DeSalvo sold off more than 41 billion of his own Blazar tokens, which caused the price of the token to drop. The value of Blazar never recovered, causing most investors to lose their entire investments.

"The Brokerage-1 Fraud"

Meanwhile, between January and May 2021, DeSalvo managed and solicited investment in a group through Brokerage-1, an online trading platform.

Investment Scam - Photo: Canva
Investment Scam - Photo: Canva

He marketed the investment group largely through social media posts in which he falsely touted his success as an investor, including a claim that he was "in the top 1,000th percent in the world."

In this scheme, federal authorities say DeSalvo solicited nearly $100,000 in investments from approximately 20 individuals for the investment group.

After receiving the funds, DeSalvo engaged in trading activities for a brief period of time before transferring all the funds out of the investment group’s account at Brokerage-1 and into personal accounts held by DeSalvo at Brokerage-1 and Coinbase. DeSalvo then used the funds for various non-investment purposes such as credit card payments, personal trading in volatile cryptocurrencies, and payments to a contractor who performed work on DeSalvo’s personal residence.

After draining the investment group’s account, DeSalvo told investors that their money was lost due to poor market conditions and he provided them with false trading records.

DeSalvo Faces Big Prison Time

The counts of securities fraud carry up to 20 years in prison and a $5 million fine.

Sentencing is scheduled for August 6th.

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