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Former Deutsche Bank Broker Pleads Guilty To Crypto-Related Fraud

Rashawn Russell faces up to 30 years in prison after pleading guilty to his role in a scheme that defrauded nearly 30 investors out of approximately $1.5 million.

A former investment banker and FINRA-registered broker with Deutsche Bank pleaded guilty to defrauding nearly 30 investors out of $1.5 million in a cryptocurrency-related scheme, and now faces up to 30 years in prison.

Rashawn Russell, a 27-year old Brooklyn resident, pleaded guilty in New York federal court this week to his role in a scheme involving the R3 Crypto Fund, which he operated, as well as for his role in an identity theft fraud in which he stole credit cards.

 In addition to the to-be-determined prison sentence, Russell will pay more than $1.5 million in restitution.

U.S. Attorney Breon Peace said the conviction stressed the Justice Department’s focus on “holding bad actors in the digital asset markets” to task for criminal activity.

“Russell leveraged investor interest in cryptocurrency markets to perpetrate a scheme to defraud clients who trusted him,” Peace said.

Russell joined Deutsche Bank Securities in July 2018, according to his BrokerCheck profile. Starting in 2020 through 2022 (after he left Deutsche), Russell ran the crypto fund, in which he purported to invest and trade cryptocurrency on behalf of clients, according to the DOJ indictment from April of this year.

Russell promised investors (which included friends, former college classmates and former co-workers at Deutsche Bank) that he’d use their assets to generate “large, and sometimes guaranteed returns” from crypto investments. But most of these assets were used by Russell for his own expenses, including to gamble and repay investors.

“At times, he also claimed he had developed a successful strategy to trade ''altcoin" cryptocurrencies and that he had earned returns for investors in excess of 100% over previous three-month periods,” the indictment read.

Russell also falsely promised some clients a guaranteed fixed return after three months at 25%, and that he’d return the principal investment regardless of how the investment actually fared. Numerous victims (who aren’t named in the indictment) sent Russell between $95,000 and $250,000.

In some cases, Russell misled investors about the status of the investments, according to the DOJ, going as far as to fabricate documents. In one case, Russell sent an investor a text message with a screenshot of a bank account showing a current balance of about $355,000. But Russell falsified this information, and the bank account actually only had about $35,000.

Some investors began demanding Russell repay their investments, but in one case, Russell sent a client a text message with a screenshot of a wire transfer confirmation. Though the confirmation seemed to show Russell had transferred $75,000 to the investor, the broker actually falsified the transfer and didn’t send any money. 

Additionally, between September 2021 and June 2023, Russell obtained more than 15 credit cards “and other access devices” in order to use them to complete unauthorized transactions, according to the Justice Department.

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