Former Investment Banker and Registered Broker Pleads Guilty to Cryptocurrency Investment Fraud Scheme

BROOKLYN, NY – Earlier today, in federal court in Brooklyn, Rashawn Russell pleaded guilty to participating in a scheme to defraud clients of the R³ Crypto Fund, a purported cryptocurrency investment fund operated by Russell.  Russell also pleaded guilty for his role in a separate identity-theft scheme in which he fraudulently obtained credit cards and other access devices in the names of third parties.  Today’s plea took place before United States Magistrate Judge Sanket J. Bulsara. When sentenced, Russell faces up to 30 years in prison.  As part of his plea agreement, Russell will be required to pay restitution in the amount of more than $1.5 million.

Breon Peace, United States Attorney for the Eastern District of New York; Nicole M. Argentieri, Acting Assistant Attorney General for the Justice Department’s Criminal Division; and Eric Shen, Inspector-in-Charge, U.S. Postal Inspection Service, Criminal Investigations Group (USPIS), announced the guilty plea.

“Russell leveraged investor interest in cryptocurrency markets to perpetrate a scheme to defraud clients who trusted him,” stated United States Attorney Breon Peace.  “The swift conviction in this case underscores this Office’s commitment to holding bad actors in the digital asset markets accountable.”

“The Postal Inspection Service proudly protects Americans from ever-evolving threats of fraud,” stated USPIS Inspector-in-Charge Shen.  “This case showcases our dedication to bring to justice those who violate their fiduciary duty to their clients.”

According to court filings and facts presented during the plea hearing, between November 2020 and August 2022, Russell, a former investment banker and registered broker with the Financial Industry Regulatory Authority, engaged in a scheme to defraud investors into his R³ Crypto Fund by falsely promising that, among other things, he would use their funds to make cryptocurrency investments that would return large, and sometimes guaranteed, returns.  In truth, much of the investors’ assets were misappropriated by Russell and used for his personal benefit, to gamble, and to repay earlier investors.   Through Russell’s scheme, at least 29 investors lost at least $1.5 million. 

In a separate fraud scheme, between September 2021 and June 2023, Russell fraudulently obtained more than fifteen credit cards and other access devices in the names of third parties.  Russell obtained these devices with the intent to use them to complete unauthorized transactions.

The government’s case is being handled by the Business and Securities Fraud Section of the United States Attorney’s Office for the Eastern District of New York and the Department of Justice, Criminal Division, Fraud Section.  Assistant United States Attorney Drew Rolle, Trial Attorney Kyle Crawford, and Assistant Chief Scott Armstrong are prosecuting the case.

If you believe you are a victim in this case, please contact the Fraud Section’s Victim Witness Unit toll-free at (888) 549-3945 or by email at victimassistance.fraud@usdoj.gov.

The Defendant:

RASHAWN RUSSELL
Age:  27
Brooklyn, New York

E.D.N.Y. Docket No. 23-CR-152