A former Brooklyn investment banker and registered broker is being arraigned on an indictment charging him with perpetrating a cryptocurrency investment fraud scheme.
Rashawn Russell, 27, of Brooklyn was arrested on April 10, in Brooklyn. He was arraigned in federal court before U.S. Magistrate Judge Ramon E. Reyes, Jr. on April 11.
“As alleged, Russell turned the demand for cryptocurrency investments into a scheme to defraud numerous investors in order to fund his lifestyle,” said U.S. Attorney for the Eastern District of New York, Breon Peace.
Russell formerly worked as an investment banker and was a registered broker with the Financial Industry Regulatory Authority.
As alleged in court documents, Russell engaged in a scheme to defraud multiple investors by falsely promising that their money would be used for cryptocurrency investments that would generate large — and sometimes guaranteed — returns.
In truth, much of the investors’ money was misappropriated by Russell and used for his personal benefit, to gamble and to repay other investors.
As part of the scheme, Russell lied to investors about the status of their investments and fabricated multiple documents that he sent to investors. As alleged, he sent one investor an altered image of a bank balance displayed on a bank website.
When another investor sought to recoup their investment, Russell never sent the money and instead sent the investor a fabricated bank wire transfer confirmation.
The charge in the indictment is an allegation and Russell is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, he faces a maximum of 20 years in prison.
“This office will continue to aggressively pursue fraudsters perpetrating these schemes against investors in the digital asset markets,” said Peace.
The government’s case is being handled by Assistant U.S. Attorney Drew Rolle from the business and securities fraud section of the U.S. Attorney’s Office for the Eastern District of New York and Assistant Chief Scott Armstrong and Trial Attorney Kyle Crawford from the Department of Justice’s criminal division, fraud section.
