Deutsche Bank’s Ex-Investment Banker Pleads Guilty to Cryptocurrency Fraud
Rashawn Russell Pleads Guilty
On Wednesday, Deutsche Bank’s former investment banker Rashawn Russell pleaded guilty to all charges brought against him in relation to misappropriating investor funds. In April, the United States Department of Justice accused Russell of conning several people into believing their funds would generate massive returns from crypto trading.
Following his guilty plea, Russell now faces a jail term of up to 30 years and could pay $1.5 million for restitution purposes.
In a statement, United States Attorney Breon Peace called out Russell for taking advantage of investors’ little knowledge about crypto trading to defraud them. He said his office would continue going after bad actors in the digital asset market with the aim of holding them accountable.
How Russell Executed His Fraud Scheme
According to documents presented to the court during Russell’s case hearing, the ex-investment banker and a licensed broker under US FIRA (Financial Industry Regulatory Authority) convinced investors to deposit their funds into his crypto fund, R3, with the promise of guaranteed profits from trading altcoins, a name given to digital currencies other than Bitcoin.
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However, Rusell did not fulfill his promise. Instead, he used most of the investor funds to repay previous investors and spent some to maintain his lavish lifestyle. As a result, the court filings show that 29 investors collectively lost over $1.5 million.
The Justice Department said in the documents that Russell did not tell investors the truth about their money. Instead, he continued to lie to them by producing several fabricated documents showing that their investments were doing fine.
At one point, the ex-investment banker is said to have sent investors a manipulated photo of the R3 bank balance, indicating the availability of massive liquidity. In another scenario, one investor wanted to withdraw their funds, but Russell did not transfer the money. Instead, he sent the investor a fake bank transfer confirmation alleging that he had returned the funds.
Who Did Russell Target?
Per the court documents, Russell targeted people who knew less about cryptocurrencies. They include his ex-colleagues at an unnamed financial institution, his friends, and his ex-college classmates.
Russel’s LinkedIn profile shows that before joining Deutsche Bank, he worked at Moody’s and JP Morgan as a banking analyst.
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