Former investment banker and registered broker pleads guilty to cryptocurrency investment fraud

September 21, 2023 Rob Abruzzese
U.S. Attorney Breon Peace announced the sentencing of a 30-year-old from South Carolina, who was found guilty of selling guns in New York City. Photo courtesy of U.S. Attorney’s Office
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Rashawn Russell, 27, a former investment banker and registered broker, confessed in a Brooklyn federal court to committing fraud against his clients through the R3 Crypto Fund, a purported cryptocurrency investment venture he operated.

Furthermore, Russell also admitted his involvement in a distinct identity theft scam where he unlawfully obtained credit cards and other financial devices under the identities of unsuspecting individuals.

Monday’s plea, held before U.S. Magistrate Judge Sanket Bulsara, could result in a prison term of up to 30 years for Russell. As part of his plea deal, Russell has been mandated to compensate more than $1.5 million in restitution.

High-ranking officials, including Breon Peace, United States attorney for the Eastern District of New York; Nicole M. Argentieri, acting assistant attorney general for the Justice Department’s Criminal Division; and Eric Shen, inspector-in-charge, U.S. Postal Inspection Service, Criminal Investigations Group (USPIS), announced the guilty plea.

News for those who live, work and play in Brooklyn and beyond

“Russell leveraged investor interest in cryptocurrency markets to perpetrate a scheme to defraud clients who trusted him,” U.S. Attorney Breon Peace said. “The swift conviction in this case underscores this office’s commitment to holding bad actors in the digital asset markets accountable.”

USPIS Inspector-in-Charge Shen remarked on the commitment of the Postal Inspection Service in defending Americans from multifaceted fraud threats and said, “This case exemplifies our unyielding pursuit of justice against those who neglect their fiduciary responsibilities.”

As revealed during the plea hearing and based on court documents, Russell had been involved in fraudulent activities between November 2020 and August 2022. He lured investors to the R3 Crypto Fund by making false promises of substantial returns on cryptocurrency investments. 

Contrary to his claims, Russell misused a significant portion of the investors’ money for personal gains, gambling, and to repay earlier fund contributors. His deceitful operations resulted in losses amounting to at least $1.5 million for a minimum of 29 investors.

In a separate fraudulent venture from September 2021 to June 2023, Russell unlawfully acquired over fifteen credit cards and other financial devices under the names of third parties, intending to carry out unauthorized transactions.

This case is being overseen by the Business and Securities Fraud Section of the United States Attorney’s Office for the Eastern District of New York in conjunction with the Department of Justice, Criminal Division, Fraud Section. Assistant United States Attorney Drew Rolle, Trial Attorney Kyle Crawford, and Assistant Chief Scott Armstrong are in charge of the prosecution.


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