Former Deutsche Bank Executive Pleads Guilty to Crypto Fraud

Rashawn Russell, a former Deutsche Bank investment banker and registered broker with the Financial Industry Regulatory Authority, has pleaded guilty to participating in a fraudulent crypto investment scheme dubbed the “R3 Crypto Fund.” The R3 Crypto Fund is distinct from the permissioned blockchain platform R3 Corda.

The SchemeĀ 

According to the United States Department of Justice (DOJ), Russell operated the R3 Crypto Fund between November 2020 and August 2022, and during that time, he solicited and received approximately $1.5 million in investments from at least 29 victims.

The DOJ stated that upon receiving the investment, Russell promised investors that he would invest their money in cryptocurrency on their behalf and generate high and sometimes guaranteed returns. However, he misused investors’ funds and used them to pay for his personal benefit, to gamble, and to repay earlier investors.Ā Ā 

As part of the scheme, Russell lied to investors about the status of their investments and fabricated several documents that displayed their returns, the DOJ said. The department stated that Russell sent one of his victims an altered image of a bank balance that claimed to show Russell’s “substantial liquidity,” but when another investor sought to recoup their investment, Russell never sent the money. Instead, he sent the investor a “fabricated bank wire transfer confirmation that purported to show the return of the investor’s money.”Ā Ā Ā 

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

Separate Plea AgreementĀ 

The DOJ said that Russell has also pleaded guilty to participating in an identity-theft scheme in which he fraudulently obtained more than 15 credit cards and other access devices using false information.

“Russell obtained these devices with the intent to use them to complete unauthorized transactions,” the DOJ said.

According to the department, Russell could face up to 30 years in prison when sentenced. The DOJ added that he will also be ordered to pay $1.5 million in restitution as part of his plea agreement.

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