Financial Crime Weekly: Rashawn Russell, From Investment Banker To Crypto Fraudster?

Rashawn Russell, a 27-year-old former investment banker at Deutsche Bank AG DB, and a Gates Millennium Leadership Scholarship recipient, found himself deep in a scandal earlier this year that is likely to see him banned professionally trading — at the very least.

The Brooklyn native, who once had a promising future in the banking sector, was charged in April for his alleged role in a complex cryptocurrency investment fraud scheme.

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Feds Allege Crypto Scam: Russell was arrested in Brooklyn in connection with allegations that he duped multiple investors with grandiose promises related to his crypto endeavors.

Read also: Financial Crime Weekly: 27-Year-Old Faces Charges For $114M Crypto Scam; Disturbing Content Found On Phone

Russell convinced investors he would invest their funds in cryptocurrency, assuring them of sizeable and sometimes guaranteed returns, according to the indictment.

Yet instead of genuine investments, Russell allegedly misappropriated a significant portion of the funds for personal expenses, including gambling, while also using new investor money to repay earlier participants.

Russell’s fraudulent actions weren’t limited to diverting funds for personal use.

He allegedly provided counterfeit documentation to investors, falsely portraying the performance of their investments. To further boost his credibility, he often touted his professional background, leveraging his former position at Deutsche Bank and his education from Babson College to gain the trust of prospective investors.

One such promise Russell made to an investor was particularly audacious. Russell represented in November 2020: “I’ve been actively trading crypto/altcoins for a while now... I’ve grown my investments from a little under 90k to 270k. I’m starting pretty small and goal is to raise 50k. Taking investments from 5k+ and I’m guaranteeing a ROI of 25% on your investment within 3 months,” according to the complaint.

Although he assured many of his investors of his success in his cryptocurrency ventures, claiming impressive returns on previous fund cycles, in reality, the “R3 Crypto Fund” he claimed to run rarely, if ever, saw the returns Russell promised.

Many investors were left high and dry, struggling to recover their original contributions.

Russell is charged with one count of wire fraud. If found guilty, he could face up to 20 years in prison. According to the Economic Times, he pleaded not guilty at a hearing in Brooklyn federal court.

The Commodity Futures Trading Commission (CFTC) filed a civil complaint against Russell on April 11 of this year. The CFTC’s complaint charges Russell with fraudulently soliciting retail investors and with misappropriating at least $1 million in investor assets.

Read next: CFTC Comes After DeFi Firms: 'Smart Contracts Don't Make Unlawful Transactions Legal'

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