Former Investment Banker and Registered Broker Sentenced for Operating $1.5M Cryptocurrency Investment Fraud Scheme

A former investment banker, who was formerly a registered broker with the Financial Industry Regulatory Authority, was sentenced today to three years and five months in prison for a fraud scheme that resulted in approximately $1.5 million in investor losses and for a separate access device fraud scheme.

According to court documents, from November 2020 to August 2022, Rashawn Russell, 28, of Brooklyn, New York, engaged in a scheme to defraud multiple investors by inducing them to invest with him based on false promises that, among other things, he would use their funds for cryptocurrency investments and that the investors would earn large—and sometimes guaranteed—returns from those investments. Russell misappropriated much of the investors’ assets and used them to fund personal expenses, to gamble, and to repay other investors. Russell also repeatedly failed to repay investors’ principal investments and failed to provide investors with promised rates of return. After certain investors requested to be repaid their investments, Russell also falsely represented that he had wired the money to them.

In a separate fraud scheme, between September 2021 and June 2023, Russell fraudulently obtained at least 97 credit and debit cards and at least 43 identification cards in the names of third parties, often from gym lockers in New York and New Jersey. Russell used the stolen card information to complete unauthorized transactions, including opening online gambling accounts and making fraudulent purchases.

Russell was also ordered to pay more than $1.5 million in restitution to victims of his cryptocurrency fraud scheme. Russell pleaded guilty in September 2023 to wire fraud and access device fraud.

Principal Deputy Assistant Attorney General Nicole M. Argentieri, head of the Justice Department’s Criminal Division; U.S. Attorney Breon Peace for the Eastern District of New York; and Inspector in Charge Eric Shen of the U.S. Postal Inspection Service (USPIS) Criminal Investigations Group made the announcement.

USPIS investigated the case.

Trial Attorney Kyle Crawford and Assistant Chief Scott Armstrong of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Drew Rolle for the Eastern District of New York prosecuted the case.