Ex-Brooklyn investment banker arrested in crypto scheme, gambling with investors’ money

[ad_1]

A former Brooklyn investment banker was formally charged on Tuesday with allegedly stealing a fortune from cryptocurrency investors to gamble and pay other investors in a quasi-Ponzi scheme.

Rashawn Russell, 27, a broker registered with the Financial Industry Regulatory Authority, is due to stand trial in U.S. District Court in downtown Brooklyn on April 11, a day after his arrest.

As alleged in court documents, Russell defrauded a number of investors by falsely promising that their money would be used for cryptocurrency investments that would generate large, often “guaranteed” returns. Meanwhile, Russell was using most of that money to gamble and pay off other investors, according to the indictment.

As alleged, Russell turned the demand for cryptocurrency investments into a scheme to defraud many investors in order to fund his lifestyle, U.S. Attorney for the Eastern District of New York Breon Peace said in a statement. This office will continue to aggressively pursue fraudsters who commit these schemes against investors in digital asset markets.

Russell is accused of lying to his investors about the status of their bogus investments and falsifying several documents he sent to these lenders. As alleged, the former Brooklyn banker sent an investor an altered image of a bank balance posted on a banking website that claimed to show Russell substantial liquidity.

When another investor sought to recover his investment, Peace’s office said, Russell never sent the money and instead sent the investor a fabricated wire transfer confirmation that claimed to show the return of the investors’ money.

If convicted, Russell faces a maximum of 20 years in prison.

Russell’s arrest in the alleged cryptocurrency scheme follows another big year for the digital currency Bitcoin has gained more than 80% in price so far this year, The New York Times reported on Tuesday, extending its gains and outperforming a number of other assets.

The cryptocurrency’s gains also coincide with turmoil in the country’s banking sector, The Times reported. The cryptocurrency has risen more than 45% since the collapse of Silicon Valley Bank last month.

[ad_2]