Ex-banker sentenced to 41 months for crypto fraud
On May 31, former investment banker Rashaun Russell was sentenced to 41 months in prison by the Eastern New York District Court in Brooklyn for wire fraud and unrelated access device fraud in a secret cryptocurrency scheme. The former Deutsche Bank executive pleaded guilty to the charges in September.
According to the Department of Justice (DOJ), Russell ran the fraudulent R3 crypto fund between November 2020 and August 2022. The fund makes cryptocurrency investments and promises big, sometimes guaranteed, returns. In fact, Russell used investors' money for his own personal gain or to pay back other investors. He also falsely claimed that he had deposited money with the investors demanding payment.
Russell was a registered broker with the Financial Industry Regulatory Authority. He could have been sentenced to 30 years in prison on the charges. He was ordered to pay $1.5 million in damages to victims of the Klipto scheme.
Separately, between September 2021 and June 2023, Russell obtained 97 bank cards with the intent to use them for fraudulent transactions with at least 43 identities.
Related: Crypto losses from fraud and hacking drop 12% in May – Immunefi
Prosecutors indicted Russell in April 2023 in connection with crypto. He pleaded guilty to all charges in September.
Many criminal crypto operations have failed
Russell's conviction is one of a rash of fraudsters who have faced justice in the past two months. On April 12, computer security engineer Shakib Ahmed was sentenced to three years in prison by the Southern District Court of New York for the 2022 flash lending attack on crypto exchanges.
On May 15, the DOJ charged brothers Anton Perrier-Buinon and James Pepper-Buinon with wire fraud, wire fraud, and money laundering for their control of the Ethereum blockchain.
On May 18, Thomas John Mdanga pleaded guilty to wire fraud related to non-existent crypto wallets and other schemes. That day, two people were arrested in connection with a more than $73 million pork scam involving money laundering and international money laundering.
Magazine: US law enforcement agencies are turning up the heat on crypto-related crimes.
