In a major development, a former executive of Deutsche Bank, one of Germany’s leading financial institutions, has been sentenced to 30 years in prison for his role in a cryptocurrency fraud scheme.
The U.S. Department of Justice (DOJ) released Press release Describe the case in detail, emphasizing the individual’s guilty pleas and the nature of the fraudulent activity.
Cryptocurrency fraud case jailed for decades
Rashawn Russell pleaded guilty in Brooklyn federal court to participating in a scheme to defraud clients of the R3 Crypto Fund, a cryptocurrency investment fund purportedly run by Russell himself, according to the U.S. Department of Justice.
Additionally, Russell admitted to participating in a separate identity theft scheme in which he fraudulently obtained credit cards and access devices on behalf of a third party.
U.S. Magistrate Judge Sanket J. Bulsara presided over the plea and handed down the sentence. Russell faced up to 30 years in prison. As part of the plea agreement, he also had to pay more than $1.5 million in restitution.
The plea announcement was jointly released by Breon Peace, U.S. Attorney for the Eastern District of New York; Nicole M. Argentieri, Acting Assistant Attorney General, Criminal Division, Department of Justice; Eric Shen, U.S. Postal Inspection Service, Criminal Division Investigation Unit (USPIS) Insp.
U.S. Attorney Breon Peace emphasized in a statement that Russell “took advantage of investors” in the cryptocurrency market to defraud trusting customers. He further emphasized that the swift convictions demonstrate the office’s commitment to holding digital asset market offenders accountable.
USPIS Inspector-in-Charge Eric Shen expressed pride in the Postal Inspection Service’s efforts to protect Americans from “ever-changing threats of fraud.” He said the case highlighted their commitment to bringing to justice those who breach their fiduciary duties to clients.
Court documents and facts presented at the plea hearing revealed that between November 2020 and August 2022, Russell made false promises to use his funds to make lucrative cryptocurrency investments.
However, Russell allegedly misappropriated a significant portion of investors’ assets for personal gain, gambling and repaying early investors. The fraudulent scheme resulted in at least 29 investors losing a total of $1.5 million.
Additionally, Russell conducted another fraud scheme between September 2021 and June 2023. During this time, he fraudulently obtained numerous credit cards and access devices on behalf of third parties with the intent to use them for unauthorized transactions.
This case is being handled jointly by the Commercial and Securities Fraud Section of the U.S. Attorney’s Office for the Eastern District of New York and the Fraud Section of the Criminal Division of the Department of Justice.
Featured image from iStock, chart from TradingView.com