Former Deutsche Bank investment banker and broker Rashawn Russell has been mandated to pay $1.5 million in restitution to victims of a digital asset scheme. Russell, already serving a 41-month term, was convicted of fraud and other offenses.
According to reports, the banker solicited Bitcoin, Ethereum, and other fiat currencies from about 29 retail investors. Authorities mentioned that he asked retail investors to invest in his R3 Crypto Fund, which he ran from November 2020 to August 2022. The report mentioned that he falsified documents and banking information to carry out his fraudulent activities.
Former Deutsche Bank employee pleads guilty to wire fraud
According to authorities, Russell ran a Ponzi-style scheme, promising investors about 25% returns on their investments while using their funds for personal gains. The report mentioned that he used funds from new investors to pay early investors, defeating his promise of helping the investors invest their money in different assets. In addition to the fraud, he was accused of credit card fraud and identity theft, facing a maximum of 30 years.
Russell pleaded guilty to a count of wire fraud when he was paraded in front of the judge at the United States Eastern New York District Court in September 2023. He was subsequently sentenced to 41 months in prison. The case against Russell was brought to the court by the US Justice Department and the Commodity Futures and Trading Commission (CFTC). At the time of his sentencing, the restitution was imposed, but the order for the payment was issued on February 10.
CFTC restructures its strategy, but still after fraud
The CFTC is now headed by its acting chairman, Caroline Pham, who was appointed on January 20 to replace Rostin Behnam. Under Pham, the agency has announced a restructuring, mentioning that its enforcement officers will be in two tasks. The first will be called the Complex Fraud Task Force, while the other will be called the Retail Fraud and General Enforcement Task Force. The new structure is to prevent overreach and aid Greater consistency.
The CFTC made about $17.1 billion from cryptocurrency enforcements in 2024, with about $2.6 billion coming from penalties and $14.5 billion being funds from disgorgement. Although its capacity of enforcement is different compared to the United States Securities and Exchange Commission (SEC), the CFTC has prosecuted some heavy cases in the country. An example is its settlement with FTX and Alameda Research, netting $12.7 billion. It also fined Binance $1.35 billion, getting the same in disgorgement.