A former employee at the Deutsche Bank is staring at lengthy incarceration and potential penalties for misappropriating investor funds. Rashawn Russell pleaded guilty to misappropriating investors’ funds lured into the scheme by promises of rewarding returns in cryptocurrency trading.
The US Department of Justice (DoJ) indicated that the guilty plea by the former investment banker comes after facing charges in April alleging his involvement in orchestrating elaborate fraud. The registered broker who previously worked at JPMorgan could serve several decades in prison besides the potential directive to settle restitution exceeding $1.5 million.
Russell Operated Deceptive Crypto Investment Scheme
In a Tuesday, September 19 statement, the US attorney Breon Pace acknowledged that Russell took a plea before Magistrate Judge Sanket J. Bulsara in Brooklyn. He acknowledged his wrongdoing in pouncing on the investor interest in crypto markets to defraud clients who entrusted his brokerage services. The attorney lauded the swift conviction, underscoring the Office’s devotion to hold bad actors accountable and weed them out of the digital asset ecosystem.
The filings presented on Monday indicated that Rusell orchestrated the fraudulent scheme between November 2020 and August last year. Although duly registered as a broker as required by the Financial Industry Regulatory Authority, he cunningly deceived the investors into the R3 Crypto Fund.
The submissions before Magistrate Bulsara indicated that Russell lied that he would use the funds in cryptocurrency investments. He promised the investment would realize significant yields and guaranteed profits.
The submissions indicated that Russell hardly honoured the investment promise. Instead, he misappropriated substantial investors’ funds to finance his activities, gambling and settling obligations to past investors. Ultimately, Rusell’s scheme became apparent, with over 29 investors suffering losses approximated at $1.5 million.
Ex-Investment Banker Misrepresented Investment Status
The Justice Department had in April 2023 indicated that Russell misrepresented the investment status and would repeatedly fabricate documents conveyed to the investors. The filing indicated that he sent the investor a manipulated bank balance image. The falsified document was taken from the institution’s website to illustrate the existence of substantial liquidity.
The submission cites a subsequent incident when Russell dishonored a request by an investor to retrieve investment from the R3 Crypto Fund. Besides failing to transfer, he sent a falsified confirmation to indicate returning the investor’s money. The April indictment revealed that the victim list features college classmates, colleagues and friends. The Grand Jury kept the identity of the victims anonymous.
The indictment likely prompted Russell to delete the LinkedIn profile illustrative of previous engagements at Moody’s, Deutsche Bank and JP Morgan. He erased evidence of his banking analyst role at Deutsche Bank from July 2018 till the assumption of associate role in July 2020.
Russell Faces Separate Charges for Card Theft
Elsewhere, Russell is facing charges related to a separate scheme he ran between September 2021 and June this year. The case alleges that Russell secured 15 credit cards alongside access devices using third parties. Russell gained access to the devices to utilize them in executing unauthorized transactions.
The second case is before the Business and Securities Fraud unit at the Attorney’s Office. Also, the criminal division and Fraud units at the Justice Department are involved. The Justice Department invites victims to contact the Victim Witness Unit within the Fraud division.