20th May 2024

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Ex-Deutsche Bank investment banker pleads guilty to crypto fraud

Illustration shows representations of cryptocurrencies

Representations of cryptocurrencies are seen in this illustration, August 10, 2022. REUTERS/Dado Ruvic/Illustration/File Photo Acquire Licensing Rights

WASHINGTON, Sept 19 (Reuters) – A former Deutsche Bank (DBKGn.DE) investment banker, who was charged in April with misappropriating funds from investors he wooed with promises of big returns from cryptocurrency trading, pleaded guilty on Tuesday, the U.S. Justice Department said.

Rashawn Russell faces up to 30 years in prison when sentenced, the Justice Department said in a statement. As part of his plea agreement, Russell will be required to pay restitution in the amount of more than $1.5 million.

“Russell leveraged investor interest in cryptocurrency markets to perpetrate a scheme to defraud clients who trusted him,” said United States Attorney Breon Peace.

Russell was an investment banker from July 2018 through November 2021 at a financial institution that was not identified in his indictment. His LinkedIn profile stated that he became a Deutsche Bank investment banking analyst in July 2018 and was promoted to associate in July 2020.

Russell told prospective investors that 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 he claimed to run.

Prosecutors said Russell transferred some funds into a trading account but siphoned the rest, and sent fake documentation to investors about how their money was doing. He solicited investments from friends and colleagues but used the funds for gambling and other personal expenses, according to federal prosecutors.

U.S. prosecutors and regulators have been working to crack down on fraud involving digital assets.

When Russell was charged in April, Deutsche Bank said that while it would not comment on an ongoing legal proceeding, it “regularly supports law enforcement and regulatory oversight efforts, including appropriately responding to and cooperating with authorized investigations and proceedings.”

Deutsche did not immediately respond to a request for comment.

Reporting by Kanishka Singh in Washington; Editing by Lincoln Feast.

Our Standards: The Thomson Reuters Trust Principles.

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Kanishka Singh is a breaking news reporter for Reuters in Washington DC, who primarily covers US politics and national affairs in his current role. His past breaking news coverage has spanned across a range of topics like the Black Lives Matter movement; the US elections; the 2021 Capitol riots and their follow up probes; the Brexit deal; US-China trade tensions; the NATO withdrawal from Afghanistan; the COVID-19 pandemic; and a 2019 Supreme Court verdict on a religious dispute site in his native India.