Key Takeaways
- Russell allegedly promised investors high returns on their cryptocurrency investments, but instead used the funds for personal needs.
- Russell is ordered to pay over $1.5 million in restitution to the victims.
A former Deutsche Bank investment banker, Rashawn Russell, was sentenced to 41 months in prison by a U.S. judge in the Eastern New York District Court on May 31st. Russell pleaded guilty in September 2023 to charges of wire fraud related to a cryptocurrency investment scheme and access device fraud in an unrelated case.
The U.S. Department of Justice (DOJ) alleged that Russell operated a fraudulent cryptocurrency investment fund called R3 Crypto Fund between November 2020 and August 2022. Russell allegedly promised investors high returns on their cryptocurrency investments, but instead used the funds for personal gain, including gambling, and to repay other investors in a Ponzi-like scheme.
According to the DOJ, Russell leveraged his credibility as a former investment banker and registered broker to convince investors of the legitimacy of the scheme. He also allegedly fabricated documents, including altered bank website images and fake bank wire transfer confirmations, to mislead investors about the status of their investments.
Russell also faces additional charges unrelated to the crypto fraud scheme. Prosecutors allege that between September 2021 and June 2023, Russell obtained nearly 100 credit and debit cards in the names of other people, intending to use them for fraudulent transactions.
Russell was initially placed on home detention following his arrest, but prosecutors accused him of continuing his identity theft scheme and his bail was revoked in February 2024. In a letter to the judge before sentencing, Russell expressed remorse for his actions and the impact on his victims.
Russell pleaded guilty to all charges in September 2023. He faces a sentence of 41 months in prison and is ordered to pay more than $1.5 million in restitution to the victims. The latest development also comes amid the DOJ cracking down on crypto fraudsters and making numerous arrests.
Earlier this month, the DOJ charged brothers Anton Peraire-Bueno and James Pepaire-Bueno claiming that they exploited the Ethereum blockchain to siphon off $25 million of cryptocurrency within 12 seconds. In April, an ex-software engineer was convicted for illegally obtaining over $12 million in crypto by exploiting vulnerabilities in the smart contracts of Nirvana Finance and another unspecified exchange based on the currency Solana.
On May 18, Thomas John Sfraga pleaded guilty to a wire fraud charge in connection with a nonexistent crypto wallet and other schemes. On the same day, two people were arrested on seven counts of money laundering and international money laundering involving funds from a pig-butchering crypto scam worth over $73 million.
