UPDATE 1-Ex-Deutsche Bank investment banker charged in US with crypto fraud

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(Adds Russell’s not guilty plea to paragraph 5)

By Luke Cohen

NEW YORK, April 11 (Reuters) – A former Deutsche Bank AG investment banker was charged in an unsealed indictment on Tuesday with embezzling funds from investors he wooed with promises of returns important through cryptocurrency trading.

Rashawn Russell, 27, of Brooklyn, solicited investments from friends and colleagues but used the funds for gambling and other personal expenses, federal prosecutors said.

According to the indictment, Russell told potential investors he was a licensed broker who worked in investment banking and could help them earn large and sometimes guaranteed returns from R3, a cryptocurrency fund. that he claimed to manage.

Prosecutors said Russell transferred funds to a trading account, but siphoned off the rest and sent false documents to investors about how their money was doing.

Russell, arrested Monday in Brooklyn after being charged in a sealed indictment last Thursday, faces one count of wire fraud for a scheme that prosecutors say ran from November 2020 to August 2022 He pleaded not guilty in a Tuesday afternoon hearing in federal court in Brooklyn. .

A lawyer for Russell did not respond to a request for comment.

According to the indictment, Russell was an investment banker from July 2018 to November 2021 at a financial institution that was not identified in the document. His LinkedIn profile says he became an investment banking analyst at Deutsche Bank in July 2018 and was promoted to partner in July 2020.

US prosecutors and regulators have been scrambling to crack down on fraud involving digital assets.

“Russell has turned the demand for cryptocurrency investments into a ploy to defraud many investors,” Breon Peace, the U.S. attorney in Brooklyn, said in a statement.

Deutsche Bank said in a statement that while it would not comment on ongoing legal proceedings, it “regularly supports law enforcement and regulatory oversight efforts, including responding to and cooperating as appropriate with investigations and authorized procedures”.

(Reporting by Luc Cohen in New York; Editing by Will Dunham and Edwina Gibbs)

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