Former Investment Banker Receives 41-Month Sentence for Crypto Fraud

Rashawn Russell, a former investment banker, was sentenced to 41 months in prison for cryptocurrency-related wire fraud and access device fraud.

Russell was sentenced in Eastern New York District Court in Brooklyn after pleading guilty in September 2023.

Former $1.5 Million Cryptocurrency Banking Fraud

Prosecutors Hinge Russell began soliciting investments in November 2020, targeting friends, former college classmates and co-workers for his R3 Crypto Fund. He guaranteed some investors a 25% return and suggested to others that they could make as much as 100%.

Leveraging his background as a former investment banker and registered broker, Russell convinced investors of the legitimacy of the scheme. He allegedly fabricated documents, including doctored bank website images and fake wire transfer confirmations, to mislead investors about their investment status.

Russell used some of the money to pay off previous investors and divert large amounts for personal expenses and gambling. The scheme continued until August 2022, until he was arrested in April 2023.

In addition to the cryptocurrency fraud, Russell faces charges of obtaining nearly 100 credit and debit cards in other people's names between September 2021 and June 2023. He allegedly intended to use them in fraudulent transactions.

The Department of Justice estimates that Russell's cryptocurrency fraud scheme resulted in investor losses of approximately $1.5 million. As a result, he was ordered to pay his victims more than $1.5 million in restitution.

Initially placed under house arrest following his arrest, Russell's bail was revoked in February 2024 due to continued identity theft activities. In a letter to the judge before sentencing, Russell expressed remorse for his actions and their impact on the victims.

The Ministry of Justice intensifies the campaign to combat cryptocurrency fraud

The latest development comes amid a widespread crackdown by the Department of Justice against cryptocurrency scammers, which has led to several arrests.

On May 18, Thomas John Sferaga pleaded guilty to wire fraud involving a non-existent cryptocurrency wallet and other schemes. On the same day, two people were arrested on charges of international money laundering and money laundering in connection with a pig slaughter cryptocurrency scam worth more than $73 million.

Earlier in May, the Department of Justice charged brothers Anton Pepper-Bueno and James Pepper-Bueno with exploiting the Ethereum blockchain to withdraw $25 million in cryptocurrency within 12 seconds.

In April, a former software engineer was convicted of illegally obtaining more than $12 million in cryptocurrencies. The engineer exploited vulnerabilities in smart contracts for Nirvana Finance and another Solana-based exchange.