Brooklyn court charges former banker for allegedly defrauding crypto investors
The federal court in Brooklyn, New York, charged a former investment banker and registered broker for allegedly defrauding numerous investors by promising profits on fake cryptocurrency investments and misappropriating the funds received to finance his lifestyle.
Documents with the court claim the defendant, Rashawn Russell, misused the growing interest in crypto investments to mislead investors. Russell convinced multiple investors to reinvest their fiat savings into cryptocurrencies, often promising significant or “guaranteed” returns. However, it is alleged that Russell misappropriated the investors’ money to fund his personal lifestyle.
Breon Peace, United States attorney for the Eastern District of New York, revealed the court’s intent to pursue the case against the former banker:
“As alleged, Russell turned the demand for cryptocurrency investments into a scheme to defraud numerous investors in order to fund his lifestyle. This Office will continue to aggressively pursue fraudsters perpetrating these schemes against investors in the digital asset markets.”
After convincing investors about the fake cryptocurrency investment scheme based on his credibility as a former investment banker and a registered broker with the Financial Industry Regulatory Authority, Russell allegedly used their money to gamble and repay other investors.
According to the information shared by the U.S. Department of Justice (DOJ), Russell fabricated documents to mislead unwary investors about the status of their crypto investments. The forgery involved altering an image of a bank’s website to depict fake balances and bank wire transfer confirmations.
If convicted, Russell could face a maximum of 20 years in prison. The DOJ also requested other investors to reach out if they suspect themselves of falling victim to the alleged crime.
Related: Bitcoin tops Donald Trump, guns in America: Google Trends
On April 6, the Washington State Department of Financial Institutions issued a consumer protection alert against the crypto exchange Eucoinotrade.
According to the report, Eucoinotrade facilitated an “advanced fee fraud” wherein users were asked to pay up for upgrading accounts and withdrawing funds. While users faced no problems depositing money, they encountered problems when trying to cash out.