By Tom Blitzer
Key Insights:
- Rashawn Russell’s “R3 Crypto Fund” deceives investors of $1.5 million.
- DOJ reveals funds misused for personal gains, not crypto investments.
- Russell’s identity theft adds to his list of illicit activities.
Previously associated with Deutsche Bank, Rashawn Russell confessed to orchestrating a deceptive cryptocurrency trading plot. This admission could see the 27-year-old serve up to three decades behind bars.
The R3 Crypto Fund
From November 2020 to August 2022, Russell utilized his prominent role to establish the “R3 Crypto Fund.” Using his standing, he persuaded 29 investors to allocate $1.5 million to him, assuring them of significant crypto returns. Yet, the Department of Justice (DOJ) has presented an alternate account of events.
Russell frequently presented manipulated financial documents to these investors, painting a rosy picture of their returns. On one occasion, when an investor sought to withdraw funds, Russell responded with a fabricated money transfer confirmation, withholding the actual amount.
Misuse of Funds and Identity Theft
The DOJ’s probe revealed a disturbing fact: a significant chunk of the amassed $1.5 million never found its way into cryptocurrency investments. Instead, Russell diverted these funds for personal luxuries, gambling, and to appease previous investors.
But Russell’s deceit wasn’t confined to the crypto realm. He also delved into identity theft, acquiring credit cards and gadgets using falsified data. The DOJ emphasized that Russell intended to use these unlawfully obtained identity documents for illicit transactions.
Facing the Consequences
Upon sentencing, Russell might be staring at a 30-year incarceration. U.S. Magistrate Judge Sanket J. Bulsara has also mandated a restitution exceeding $1.5 million.
This revelation comes amidst a broader governmental crackdown on cryptocurrency malpractices. For instance, Eddy Alexandre from New York previously conceded to a commodities fraud scheme, having misled investors through his EminiFX cryptocurrency platform.
Russell had promised his clients to sound crypto investments, but the truth contrasted sharply. He portrayed an image of fiscal solidity, yet the money was frittered away on personal indulgences. Deutsche Bank, where he previously worked, is absolved of involvement and fully collaborated with the authorities.
Additionally, the Commodity Futures Trading Commission has taken legal action against Russell. They claim he misled investors with the “R3 Crypto Fund,” mainly focused on Bitcoin. Sadly, a majority of these investors haven’t witnessed any investment returns.
Controversies marred Russell’s pre-trial phase. Accusations of bond violations emerged when he was found frequenting gambling venues and using pseudonyms to secure credit cards. As a result, he was mandated to wear an electronic monitoring device, with stringent surveillance of his digital activities.
Russell’s tenure at Deutsche Bank Securities Inc. spanned from August 2018 to December 2021.