Rashawn Russell, a former investment banker, has been sentenced to 41 months in jail for wire fraud related to a cryptocurrency and access device fraud.
Russell’s sentencing took place at the Eastern New York District Court in Brooklyn after his September 2023 guilty plea.
Former Banker’s $1.5 Million Crypto Fraud
Prosecutors detailed that 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 up to 100%.
Leveraging his background as a former investment banker and registered broker, Russell convinced investors of the scheme’s legitimacy. He allegedly fabricated documents, including altered bank website images and fake bank wire transfer confirmations, to mislead investors about their investment status.
Russell used some funds to repay earlier investors and diverted substantial amounts for personal expenses and gambling. The scheme lasted until August 2022, with his arrest in April 2023.
In addition to the crypto fraud, Russell faces charges for acquiring nearly 100 credit and debit cards under other people’s names between September 2021 and June 2023. He allegedly intended to use them for fraudulent transactions.
The DOJ estimates Russell’s cryptocurrency fraud scheme led to approximately $1.5 million in investor losses. As a result, he was ordered to pay his victims over $1.5 million in restitution.
Initially placed on home detention after his arrest, Russell’s bail was revoked in February 2024 due to continued identity theft activities.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.
DOJ Intensifies Crypto Fraud Crackdown
The latest development comes amid a broader DOJ crackdown on crypto fraudsters, resulting in numerous arrests.
On May 18, Thomas John Sfraga pleaded guilty to wire fraud involving a nonexistent crypto wallet and other schemes. On the same day, two individuals were arrested on seven counts of money laundering and international money laundering related to a pig-butchering crypto scam worth over $73 million.
Earlier in May, the DOJ charged brothers Anton Peraire-Bueno and James Pepaire-Bueno with exploiting the Ethereum blockchain to siphon off $25 million in crypto within 12 seconds.
In April, an ex-software engineer was convicted for illegally obtaining over $12 million in crypto. The engineer exploited vulnerabilities in the smart contracts of Nirvana Finance and another exchange based on the Solana currency.