- A New York-based investment banker has been charged with operating a fraudulent investment scheme
- The CFTC says Rashawn Russell misappropriated at least $1 million of investor money
- Russell has also been charged with wire fraud by the Department of Justice
The Commodity Futures Trading Commission (CFTC) has charged a New York investment banker with a seven-figure crypto investment scam. The CFTC alleges that Rashawn Russell illegally solicited retail investors to invest in a digital asset trading fund and misappropriated at least $1 million in investor assets between November 2020 and July 2022. In a story heard a hundred times before, Russell is alleged to have promised returns to investors only to keep some of the money for himself, but his endeavors could end in prison time.
Russell Promised 25% Returns
According to the complaint, Russell allegedly solicited retail investors to contribute BTC, ETH, and cash to invest in his digital assets trading fund for 18 months from November 2020. Russell claimed that investors would not incur any losses and, in some cases, would receive a guaranteed minimum return on investment of 25%.
He is also accused of intentionally and/or recklessly making false and misleading statements regarding the fund’s structure, size, and performance.
Wire Fraud Charge Could Spell Prison
The CFTC says that Russell traded very little of the invested funds and falsely promised to pay withdrawal requests, misappropriating at least $1 million of the funds entrusted to him. Instead, he used the money to pay for personal expenses, entities associated with gambling activities, and Ponzi-like payments to current investors.
The CFTC is seeking restitution, disgorgement, civil monetary penalties, permanent trading and registration bans, and a permanent injunction against further violations of the Commodity Exchange Act (CEA) and CFTC regulations, but worse could be coming; Russell has also been charged with one count of wire fraud by the Department of Justice, which could result in a prison sentence.
