Posted on: June 6, 2024, 06:43h.
Last updated on: June 6, 2024, 06:43h.
A former Deutsche Bank investment banker has been sentenced to three years and five months in prison for orchestrating a “Ponzi-like” crypto fraud scheme that hit investors for $1.5 million.
Rashawn Russell, 28, of Brooklyn, promised his victims returns on their investments of up to 100% through cryptocurrency trades via his company, the R3 Crypto Fund. But federal prosecutors said Russell used the fund for gambling and other personal expenses while he stole from Peter to pay Paul.
In a separate fraud, Russell stole at least 140 credit, debit and ID cards, often from gym lockers in New York and New Jersey. He used the stolen cards to open online gambling accounts and make fraudulent purchases, according to prosecutors.
False Promises
Russell used his credentials as a financial highflyer to convince his victims that the fund was legitimate. He worked for Deutsche Bank in New York for six years, first as an investment banking analyst and then as an associate.
From November 2020 to August 2022, Russell persuaded friends, ex-classmates, and former Deutsche Bank colleagues to invest in R3 Crypto, promising many he could “guarantee” at least 25% returns in three months. But he used the money to gamble and pay earlier investors, according to court documents.
He fabricated documents to convince investors their funds were safe. This included sending a screenshot of a purported bank balance, which he had doctored to show $355K. In reality, there was around $35K in the account.
When the scheme began to unravel and some investors asked to be repaid, Russell bought time by sending falsified screenshots that purported to be wire transfer confirmations proving he had sent them money. But there were no wire transfers.
‘Leadership Potential’
Russell emigrated with his family to the US from Jamaica when he was 15. As a teenager, he won a scholarship to the High School of Economics and Finance in New York City, thanks to his “extraordinary leadership potential.” From there, Russell studied at Babson College in Boston, where he received a Gates Millennium Leadership Scholarship.
But in a letter to Judge Hector Gonzalez, Russell described how he descended into “crippling gambling and substance addiction” and expressed deep remorse for his crimes.
The Holy Spirit had made him “new,” he added, “revitalizing my moribund body with purpose.”
Russell was jailed in February after prosecutors accused him of continuing his identity theft scam after his arrest. He has been ordered to pay victims more than $1.5 million in restitution.
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