Crypto Fraudster Gets Slammed: Ex-Banker Gets 41 Years In Prison


In
a
landmark
case
highlighting
the
perils
of
unchecked
cryptocurrency
investments,

Rashawn
Russell,
a
former
investment
banker,
has
been
sentenced
to
41
months
in
federal
prison.

The
Eastern
New
York
District
Court
handed
down
the
sentence
after
Russell
pleaded
guilty
to
wire
fraud
and
identity
theft,
marking
a
significant
crackdown
on
digital
asset
fraud.


Cryptocurrency
Fraud
Scheme
Busted

The

Department
of
Justice
estimates
that
Russell’s
cryptocurrency
fraud
led
to
approximately
$1.5
million
in
investor
losses.
His
sentencing
is
part
of
a
broader
DOJ
initiative
to
combat
rising
fraud,
which
has
seen
a
notable
increase
in
recent
years.

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Russell’s
scheme,
which
ran
from
November
2020
to
August
2022,
targeted
friends,
former
college
classmates,
and
co-workers.
With
the
help
of
his
experience
in
the
industry
and
his
registration
as
a
broker,
Russell
raised
money
for
his
R3
Crypto
Fund.

He

enticed
investors
with
guarantees
of
a
25%
return
and
even
suggested
potential
gains
of
up
to
100%,
exploiting
the
widespread
excitement
and
trust
in
digital
currency
investments.
To
maintain
the
facade
of
legitimacy,
Russell
fabricated
documents,
including
doctored
bank
statements
and
fake
wire
transfer
confirmations.

These
fraudulent
documents
misled
investors
about
the
status
and
profitability
of
their
investments.
In
reality,
Russell
used
a
portion
of
the
funds
to
repay
earlier
investors
in
a
classic
Ponzi
scheme
manner,
while
diverting
substantial
amounts
for
personal
expenses
and
gambling.

The
unraveling
of
Russell’s
scheme
began
with
his
arrest
in
April
2023.
Further
investigations
revealed
that
between
September
2021
and
June
2023,
Russell
had
acquired
nearly
100
credit
and
debit
cards
under
other
people’s
names,
intending
to
use
them
for
fraudulent
transactions.

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This
additional
layer
of
criminal
activity
prompted
the
revocation
of
his
bail
in
February
2024,
as
it
became
evident
that
Russell
continued
his
fraudulent
behavior
even
under
home
detention.

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DOJ’s
Recent
Crackdown
Efforts

The
DOJ
has
intensified
its
fight
against
fraud
and
illicit
activities,
with
the
National
Cryptocurrency
Enforcement
Team
(NCET)
leading
the
charge.
The
agency
is
targeting
crypto
exchanges
that
facilitate
criminal
activities
such
as
money
laundering
and
investment
scams
by
allowing
criminals
to
easily
profit
from
their
crimes
and
cash
out.

The
department
has
been
actively
pursuing
investment
scams,
known
as

“pig
butchering”
schemes,
where
scammers
build
relationships
with
victims
over
a
period
of
months.
In
April
2023,
the
agency
seized
over
$112
million
in
crypto
investments
from
six
such
scams.

The
DOJ
is
also
focusing
on
cross-chain
bridges,
which
have
been
a
prime
target
for
malicious
attacks,
and
aims
to
tackle
theft
and
hacks
in
the
decentralized
finance
(DeFi)
realm.
The
DOJ’s
efforts
are
not
only
aimed
at
combating
crypto
fraud
but
also
at
building
infrastructure
for
a
potential
future
where
the
Federal
Reserve
(Fed)
introduces
its
own
digital
currency
at
the
consumer
level,
potentially
leading
to
a
cashless
society.

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The
FBI
estimates
that
$3.31
billion
was
stolen
from
people
through
investment
fraud
in
2022,
with
crypto-related
scams
accounting
for
over
$2.5
billion
of
that
figure.
The
DOJ
has
seen
a
significant
rise
in
crypto-related
criminal
incidents
over
the
past
four
years,
with
a
183%
jump
in
cryptocurrency
scams
from
2021
to
2023,
representing
$2.57
billion
in
one
year.


Featured
image
from
Getty
Images,
chart
from
TradingView

Go to Source
Author: Christian Encila


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