Former Deutsche Bank investment banker Rashawn Russell is reportedly preparing to change his plea to guilty in a cryptocurrency fraud case. The 27-year-old from Brooklyn, who initially denied defrauding investors, is accused of soliciting investments from friends and colleagues and misusing the funds for personal expenses, including gambling. According to a Bloomberg report, Russell posed as a licensed broker and promised investors significant returns through a cryptocurrency fund he claimed to manage.
Accused Of Misappropriating Funds In Crypto Fraud
Court records show that Russell faces one count of wire fraud for his involvement in a scheme from November 2020 through August 2022. Prosecutors claim that Russell transferred a portion of the funds to a trading account but “misappropriated” the rest while providing investors with fabricated documentation about the performance of their investments. In April 2023, Russell was indicted by federal prosecutors in Brooklyn. After multiple postponements for plea negotiations, the case has been referred to a magistrate judge for a “change of plea hearing.”
The decision to change his plea suggests that Russell intends to plead guilty, according to an anonymous Bloomberg source familiar with the matter. This case is another example of the government’s efforts to combat cryptocurrency fraud, following recent guilty pleas by individuals involved in similar schemes. For instance, Eddy Alexandre pleaded guilty in February to a commodities fraud scheme involving his EminiFX cryptocurrency and foreign exchange platform.
While Deutsche Bank has not faced accusations of wrongdoing, Russell’s actions occurred during his tenure there. The institution has cooperated with law enforcement throughout the investigation. Additionally, Russell is facing a separate lawsuit filed by the Commodity Futures Trading Commission (CFTC), alleging defrauding of retail investors in a digital asset trading fund called “R3 Crypto Fund.”
Gambling And Identity Theft?
Russell’s time awaiting trial has been marked by additional complications. Prosecutors accused him in June of violating the terms of his bond by visiting gambling establishments and using other individuals’ names to obtain credit cards and access gaming websites. Consequently, a federal magistrate ordered him to wear an electronic monitoring device and directed court officials to monitor his computer usage.
As the legal proceedings unfold, the outcome of Russell’s plea change might have implications for the affected investors and the broader cryptocurrency industry.
At the time of writing, the leading cryptocurrency in the market, Bitcoin (BTC), is trading at $26,380, representing a 0.7% decline in the past 24 hours. However, it has maintained a 1.8% profit over the past seven days.
Featured image from iStock, chart from TradingView.com
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