Ex-Deutsche Bank Employee Pleads Guilty to Crypto Fraud

Rashawn Russell, a former investment banker at Deutsche Bank, has pleaded guilty to charges of misappropriating funds from investors who were lured by promises of significant returns from cryptocurrency trading, according to the U.S. Justice Department.

Russell's guilty plea comes after he was charged with orchestrating an elaborate fraud scheme in April. He now faces the possibility of up to 30 years in prison, as well as the requirement to pay restitution exceeding $1.5 million.

“Russell leveraged investor interest in cryptocurrency markets to perpetrate a scheme to defraud clients who trusted him,” U.S. Attorney Breon Peace said in a statement. “The swift conviction in this case underscores this Office’s commitment to holding bad actors in the digital asset markets accountable.”

A sophisticated fraud scheme

According to court documents and details presented during the plea hearing, between November 2020 and August 2022, Russell, a former investment banker and registered broker under the Financial Industry Regulatory Authority, was involved in a fraudulent scheme.

He deceived investors into putting their money into his R³ Crypto Fund by falsely assuring them that their funds would be used for cryptocurrency investments that would yield significant, and sometimes guaranteed, profits.

In reality, a substantial portion of the investors' funds were misappropriated by Russell for his personal gain, gambling, and repaying previous investors. As a result of Russell's scheme, a minimum of 29 investors incurred losses amounting to at least $1.5 million.

As part of the scheme, the Justice Department said back in April, “Russell lied to investors about the status of their investments and fabricated multiple documents that he sent to investors.”

At one point, Russell allegedly sent one investor a manipulated image of a bank balance supposedly taken from a bank's website, falsely indicating significant liquidity available. In another instance, when an investor attempted to retrieve their investment, Russell failed to transfer the funds and instead sent the investor a fake bank wire transfer confirmation that falsely depicted the return of the investor's money.

Per the April indictment, Russell's deceptive scheme targeted “numerous individuals, including his friends, former college classmates, and former colleagues at [a] financial institution,” the identity of which is known to the Grand Jury.

Russel’s now-deleted LinkedIn page showed that he worked at both JP Morgan and Moody’s, as well as Deutsche Bank, where he worked as banking analyst since July 2018 before being promoted to associate in July 2020.

Deutsche Bank did not immediately respond to Decrypt’s request for comment.