On May 31, Rashawn Russell, a former Deutsche Bank executive, was sentenced to 41 months in prison by the Eastern District of New York in Brooklyn. Russell was found guilty of wire fraud related to a cryptocurrency scheme and an unrelated access device fraud scheme. He pleaded guilty to the charges in September.
The Fraudulent Crypto Scheme
The Justice Department (DOJ) revealed that between November 2020 and August 2022, Russell operated the fraudulent R3 Crypto Fund. The fund falsely promised high returns from cryptocurrency investments, sometimes guaranteeing large profits. Instead of investing the funds, Russell used the money for personal expenses and to repay other investors. He also deceived investors by claiming to have wired money for repayments, which never occurred.
Russell, a registered broker with the Financial Industry Regulatory Authority, faced up to 30 years in prison for these charges. Additionally, he was ordered to pay $1.5 million in restitution to the victims of his crypto scheme.
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Additional Fraudulent Activities
Apart from the crypto fraud, between September 2021 and June 2023, Russell obtained 97 bank cards using at least 43 different identities. He intended to use these cards for fraudulent transactions.
Prosecutors charged Russell for the crypto-related fraud in April 2023, and he subsequently pleaded guilty to all charges in September.
A Surge in Crypto-Related Convictions
Russell’s conviction is part of a recent crackdown on cryptocurrency-related fraud. Several notable cases include:
- Shakeeb Ahmed: On April 12, this computer security engineer was sentenced to three years in prison, followed by three years of supervised release, for executing flash loan attacks on crypto exchanges in 2022.
- Anton Peraire-Bueno and James Pepaire-Bueno: On May 15, the DOJ charged these brothers with conspiracy to commit wire fraud, wire fraud, and conspiracy to commit money laundering for manipulating the Ethereum blockchain.
- Thomas John Sfraga: On May 18, Sfraga pleaded guilty to a wire fraud charge involving a nonexistent crypto wallet and other schemes.
- Pig-Butchering Scam Arrests: On the same day, two individuals were arrested on seven counts of money laundering and international money laundering related to a $73 million pig-butchering crypto scam.
