Tech
Former banker pleads guilty to crypto fraud and sentenced to 41 months
Rashawn Russell, a former Deutsche Bank executive, was condemned to 41 months in prison May 31 in the Eastern District Court of New York, Brooklyn.
Russell was charged with wire fraud through a cryptographic scheme and unrelated access device fraud. He previously pleaded guilty to the charges in September 2023.
Detail the fraudulent scheme
The Department of Justice (DOJ) reported that Russell orchestrated a fraudulent investment fund known as the R3 Crypto Fund, which operated from November 2020 to August 2022.
The fund promised investors significant returns on their investments. However, instead of investing the money as promised, Russell diverted the funds for personal use. He used money from later investors to pay off the first comers, creating a classic Ponzi scheme.
In addition to this, it also deceived investors by falsely claiming that it transferred the redemption funds when requested.
Russel’s fraudulent activities were revealed when prosecutors charged him with wire fraud related to the crypto scheme in April 2023. The former banker admitted to all charges in September, leading to his conviction.
Russell’s case is part of a broader crackdown on cryptocurrency-related fraud, reflecting the growing scrutiny of such cases in the digital asset space. Over the past two months, several other people have been convicted or charged with similar crimes.
A good example occurred on May 18, when Thomas John Sfraga pleaded guilty to wire fraud involving a fake crypto wallet. He was also involved in other schemes designed to deceive investors.
In particular, on the same day, two people were arrested for money laundering on seven counts. Both acts were linked to a $73 million worth of “pig slaughter“crypto scam.
Another scenario was the case of Anton and James Peraire-Bueno. On May 15, the DOJ charged the brothers with criminal conspiracy aimed at money laundering and wire fraud. They were accused of manipulating the Ethereum blockchain to fraudulently profit from it.
Another case on April 12 involved Shakeeb Ahmed, a cybersecurity engineer condemned to three years in prison.
His sentence was followed by three years of supervised release for carrying out flash lending attacks on digital asset exchanges in 2022. The Southern New York District Court handled this case.
Fraudulent crypto trend
Meanwhile, the trend of fraudulent activity appears to be decreasing this year, according to a May 30 report relationship from the blockchain security company Immunefi. The report showed that cryptocurrency losses due to fraud and hacker attacks decreased by 12% compared to the previous year.
As of May 2024, total losses stood at $52 million, down from more than $59 million in May the previous year. Furthermore, this figure shows a decline of 28% compared to the losses reported in April.
The report also highlights a continuing trend of decreasing losses due to hacker attacks and crypto fraud in the Web3 industry. In early March, Immunefi released a relationship indicating that losses in the first quarter of 2024 had decreased by 23% compared to the previous year.
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