NEW YORK (1010 WINS) -- A former New Jersey correctional officer was arrested and charged by the U.S. Securities and Exchange Commission Wednesday for orchestrating two cryptocurrency scams targetting fellow civil servants -- including firefighters, police officers and EMTs, the U.S. Attorney's Office in Newark said.
John DeSalvo, 47, of Marmora is charged by criminal complaint with two counts of wire fraud, two counts of securities fraud, and two counts of money laundering related to the two fraud schemes.
U.S. Attorney Philip R. Sellinger said DeSalvo committed "brazen investment fraud schemes in which he falsely promised huge returns to obtain hundreds of thousands of dollars from unsuspecting investors."
FBI Newark Special Agent in Charge James E. Dennehy said, "We allege DeSalvo created and marketed a cryptocurrency to first responders as a ‘crypto pension’ that could supplement their existing pensions. 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."
In one scheme, Sellinger said, DeSalvo is alleged to have "targeted law enforcement and first responders to invest in a digital token that he falsely claimed was SEC-approved and listed on cryptocurrency exchanges."
In the other scheme, DeSalvo is alleged to have obtained investments by promising extraordinary rates of return that "we allege were too good to be true. Once DeSalvo got his investors’ money, he is alleged to have spent it on himself, paying personal expenses and funding his own investments," said Sellinger.
The counts of wire fraud carry a maximum potential penalty of 20 years in prison and a fine of $250,000. The counts of securities fraud carry a maximum potential penalty of 20 years in prison and a fine of $5 million. The counts of money laundering carry a maximum potential penalty of 20 years in prison and a fine of $500,000.
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