Former investment banker Rashawn Russell was handed a 41-month prison sentence on May 31 in Eastern New York District Court for engaging in wire fraud in a cryptocurrency scheme and an unrelated access device fraud scheme. In September, the ex-Deutsche Bank executive pleaded guilty to the charges.
According to the Department of Justice (DOJ), Russell operated the fraudulent R3 Crypto Fund between November 2020 and August 2022. The fund claimed to invest in cryptocurrencies and promised significant, sometimes guaranteed, returns. However, Russell misused investors’ funds for personal gain or to repay other investors. He also falsely stated that he had wired money to investors who requested repayment.
In addition to his involvement in the cryptocurrency scheme, Russell, who was also a registered broker with the Financial Industry Regulatory Authority, obtained 97 bank cards using at least 43 identities with the intention of using them for fraudulent transactions between September 2021 and June 2023.
Russell could have faced a maximum prison sentence of 30 years for the charges against him. He was also ordered to pay $1.5 million in restitution to the victims of the cryptocurrency scheme.
Separately, the DOJ charged Russell for his involvement in the cryptocurrency-related crimes in April 2023. He pleaded guilty to all charges in September.
Russell’s conviction is part of a series of recent crackdowns on cryptocurrency fraudsters. On April 12, computer security engineer Shakeeb Ahmed was sentenced to three years in prison followed by three years of supervised release for flash loan attacks on crypto exchanges in 2022.
On May 15, the DOJ charged brothers Anton Peraire-Bueno and James Pepaire-Bueno with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering for manipulating the Ethereum blockchain.
On May 18, Thomas John Sfraga pleaded guilty to a wire fraud charge related to a nonexistent crypto wallet and other schemes. On the same day, two individuals were arrested on multiple counts of money laundering and international money laundering involving funds from a pig-butchering crypto scam worth over $73 million.
US enforcement agencies are increasing their efforts to combat cryptocurrency-related crimes.