A former investment banker at Deutsche Bank, Rashawn Russell, has been charged with perpetrating a cryptocurrency-related fraud scheme. The 27-year-old from Brooklyn, New York, is accused of misappropriating funds from victims whom he promised large returns on cryptocurrency investments in a Ponzi-like scheme. The US Department of Justice announced on Tuesday that Russell had been arrested on April 10 on criminal charges related to his alleged role in running the fraud scheme.
Prosecutors claim that Russell defrauded multiple investors, luring them with promises of big and even guaranteed returns from cryptocurrency investment and trading. However, he used their money for his own benefit, to gamble and to repay other investors in order to keep the scheme going. The indictment alleges that the accused repeatedly failed to provide investors with the promised rates of return. And when some of them requested to be repaid their investments, he falsely represented that he had wired them the money.
While the document only mentions he worked as an investment banker between July 2018 and November 2021, Russell became an investment banking analyst at Deutsche Bank in July 2018 and was promoted to associate in July 2020. The bank stated through a spokesperson that it “regularly supports law enforcement and regulatory oversight efforts, including appropriately responding to and cooperating with authorized investigations and proceedings.”
Russell solicited investments from friends, former classmates and colleagues, whom he convinced he had developed a successful strategy for altcoin trading. He is charged with one count of wire fraud and could face up to 20 years in prison if convicted. The banker pleaded not guilty and was released on a $200,000 bail.
“Russell turned the demand for cryptocurrency investments into a scheme to defraud numerous investors in order to fund his lifestyle,” said US Attorney for the Eastern District of New York Breon Peace. “This Office will continue to aggressively pursue fraudsters perpetrating these schemes against investors in the digital asset markets,” he added.
Russell’s indictment comes amid an ongoing crackdown on cryptocurrency-related fraud in the United States. The US Securities and Exchange Commission (SEC) has been actively pursuing cases of cryptocurrency fraud and has warned investors to be cautious of investment schemes that promise high returns. The regulator has also issued guidelines for cryptocurrency exchanges and has taken action against several unregistered exchanges that failed to comply with its regulations.
The US Department of Justice has also been actively pursuing cases of cryptocurrency fraud. In February, the department charged three North Korean hackers for their involvement in a cryptocurrency-related scheme to steal more than $1.3 billion from banks and other financial institutions. Last year, the department charged two Chinese nationals for their involvement in a cryptocurrency-related scam that defrauded investors of more than $100 million.
As the popularity of cryptocurrencies continues to rise, so does the risk of fraud. Investors are advised to exercise caution and conduct thorough research before investing in any cryptocurrency.
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