Written by The White Law Group• April 13, 2023• 5:19 pm• Blog, Current Investigations

Rashawn Russell, Deutsch Bank Rep Arrested for Crypto Fraud

Rashawn Russell Pleads Guilty to Ponzi-like Cryptocurrency Fraud Scheme

Former Deutsche Bank broker Rashawn Russell has reportedly admitted to defrauding nearly 30 investors of $1.5 million in a cryptocurrency-related scheme. According to a recent press release, Russell purportedly entered a guilty plea this week and now faces the possibility of a 30-year prison sentence.

Table of Contents

Russell’s guilty plea was allegedly made in a New York federal court in connection to a scheme involving the R3 Crypto Fund, which he allegedly managed. He also reportedly confessed to his participation in an identity theft fraud scheme, where he purportedly illegally acquired credit card information.

In addition to the prison sentence, which is yet to be determined, Russell has reportedly been ordered to pay restitution totaling more than $1.5 million.

According to Bloomberg on April 11, 2023, federal authorities reportedly arrested Russell for allegedly engaging in a Ponzi-like cryptocurrency fraud. Russell purportedly promised investors “guaranteed” returns and used some of their money to pay off others. US prosecutors reportedly charged Russell with defrauding multiple investors by telling them their funds would be used for crypto investments, when instead, he was allegedly using the money for personal expenses like gambling or to keep the alleged scheme going, according to the indictment.

According to the US attorney’s statement, Russell allegedly “turned the demand for cryptocurrency investments into a scheme to defraud numerous investors in order to fund his lifestyle.”

According to the indictment, Russell allegedly claimed to be a licensed broker, the former investment banking associate misappropriated investors’ funds and used them for his personal benefit. In a practice characteristic of Ponzi schemes, he is alleged to have used funds entrusted to him by some investors to repay others, in the absence of the gains he was touting.

Prosecutors alleged that Russell solicited investments from friends, former classmates and former colleagues. He reportedly claimed he had developed a successful strategy for trading altcoin, or digital currencies, and had earned returns for his clients of more than 100% over a three-month period, according to the indictment.

Russell purportedly promised investors a guaranteed fixed return, after three months, of as much as 25%, to get them to invest. As part of the alleged scheme, he lied to his clients about the status of their investments and allegedly fabricated documents — sending one investor a screenshot of a bank balance of about $355,000 when it was closer to $35,000, according to the charges.

Further when a customer asked for Russell to return the money, he sent the investor a fabricated bank wire transfer confirmation that purported to show the return of the funds, according to the indictment.

At his arraignment, Russell, a resident of Brooklyn, originally pleaded not guilty. He was released on a $200,000 bond.

Crypto Ponzi Scheme

Regulators have been cracking down on cryptocurrency fraud lately. There have been several cases reported of cryptocurrency Ponzi schemes that have harmed investors.

A cryptocurrency Ponzi scheme is a type of scam where investors are promised high returns on their investment in a cryptocurrency, but the returns are actually paid out using the investments of newer investors. The scheme relies on a continuous stream of new investors to pay off earlier investors and to maintain the illusion of legitimacy.

The scheme typically involves a promoter or a group of promoters who offer an investment opportunity in a cryptocurrency that they claim will generate significant profits. The promoters may use a variety of tactics to convince investors to participate, such as creating a sense of urgency, offering guaranteed returns, or claiming to have insider knowledge of the market.

Initially, the scheme may pay out the promised returns to the early investors, creating a false sense of legitimacy and attracting more investors. However, as the scheme grows, it becomes increasingly difficult to find new investors to pay off the earlier ones. Eventually, the scheme collapses, leaving most investors with losses.

Cryptocurrency Ponzi schemes are illegal and highly risky investments. They rely on deception and the continuous influx of new investors to sustain the payouts. It is important to thoroughly research any investment opportunity before putting your money into it, especially in the highly speculative world of cryptocurrencies.

Rashawn Russell – FINRA BrokerCheck Profile

The FINRA BrokerCheck tool is a free online tool that allows investors to research and verify the background and credentials of financial brokers, brokerage firms, and investment advisors registered with FINRA.

BrokerCheck provides investors with detailed information about the professional history, qualifications, and regulatory actions of brokers and brokerage firms. Investors can use the tool to verify whether a broker or brokerage firm is registered with FINRA, as well as to review their employment history, licensing status, and any regulatory actions or complaints filed against them.

According to his FINRA BrokerCheck profile, Russell was reportedly affiliated with DEUTSCHE BANK SECURITIES INC. (CRD#:2525) in New York, New York from 08/30/2018 – 12/13/2021.

Broker Due Diligence

Brokers and brokerage firms owe a duty of care and loyalty to their customers. The broker must use the standard of care and diligence needed to protect the customer’s interest. Failure to fulfill that duty may constitute negligence or malpractice by a broker. The duty of loyalty requires that the broker refrain from self-dealing and place the interests of the customer first.

FINRA Dispute Resolution is an arbitration venue for investors with claims against their brokerage firm or financial professional. It provides investors with an opportunity to attempt to recoup their investment losses and is an alternative to filing such claims in court.

If you have suffered losses investing with Rashawn Russell, the securities attorneys at the White Law Group may be able to help you. For a free consultation with a securities attorney, please call (888) 637-5510.

The White Law Group, LLC is a national securities fraud, securities arbitration, investor protection, and securities regulation/compliance law firm dedicated to helping investors in claims in all 50 states against their financial professional or brokerage firm. Since the firm launched in 2010, it has handled over 700 FINRA arbitration cases.

Our firm represents investors in all types of securities related claims, including claims involving stock fraud, broker misrepresentation, churning, unsuitable investments, selling away, and unauthorized trading, among many others.

With over 30 years of securities law experience, The White Law Group has the expertise to help investors defrauded in securities, investment and financial business transactions attempt to recover their investment losses. For more information, please visit our website, whitesecuritieslaw.com.