Former investment banker and registered broker pleads guilty to cryptocurrency investment fraud

US Attorney Breon Peace announced the guilty plea of Rashawn Russell in a high-profile cryptocurrency fraud case.
Photo courtesy of the Department of Justice

Rashawn Russell, 27, a former investment banker and registered broker, confessed in federal court in Brooklyn to committing fraud against his clients through the R3 Crypto Fund, a purported cryptocurrency investment company he operated.

Additionally, Russell also admitted his involvement in a separate identity theft scam in which he illegally obtained credit cards and other financial devices under the identities of unsuspecting individuals.

Monday's plea, filed before U.S. Magistrate Judge Sanket Bulsara, could result in a prison sentence of up to 30 years for Russell. As part of his plea deal, Russell has been ordered to make more than $1.5 million in restitution.

High-ranking officials, including Breon Peace, U.S. Attorney for the Eastern District of New York; Nicole M. Argentieri, Acting Assistant Attorney General of the Department of Justice's Criminal Division; and Eric Shen, Inspector in Charge of the U.S. Postal Inspection Service, Criminal Investigation Group (USPIS), announced their guilty pleas.

“Russell took advantage of investor interest in the cryptocurrency markets to perpetrate a scheme to defraud customers who trusted him,” said U.S. Attorney Breon Peace. "The swift conviction in this case underscores this office's commitment to holding bad actors in the digital asset markets accountable."

USPIS Inspector-in-Charge Shen highlighted the Postal Inspection Service's commitment to defending Americans from multifaceted fraud threats, saying, “This case exemplifies our unwavering pursuit of justice against those who neglect their fiduciary responsibilities.”

As revealed during the plea hearing and according to court documents, Russell had been involved in fraudulent activities between November 2020 and August 2022. He lured investors into the R3 Crypto Fund by making false promises of substantial returns on cryptocurrency investments.

Contrary to his claims, Russell misused a significant portion of investors' money for personal gain, gambling, and to pay off previous contributors to the fund. His deceptive trading caused losses of at least $1.5 million to at least 29 investors.

In a separate fraudulent enterprise from September 2021 to June 2023, Russell illegally acquired more than fifteen credit cards and other financial devices in the names of third parties, with the intent to conduct unauthorized transactions.

This case is being overseen by the Securities and Commercial Fraud Section of the United States Attorney's Office for the Eastern District of New York in conjunction with the Fraud Section of the Criminal Division of the Department of Justice. Assistant U.S. Attorney Drew Rolle, Trial Attorney Kyle Crawford and Chief Deputy Scott Armstrong are prosecuting the case.