Former Deutsche Bank investment banker Rashawn Russell, who has denied defrauding investors in a cryptocurrency fraud, appears ready to change his mind and plead guilty to fraud charges, court records show.
Russell was indicted in April by federal prosecutors in Brooklyn, New York, accused of duping investors by promising them “guaranteed returns.”
After repeated postponements for Russell’s lawyers to engage in plea negotiations with the government, US Magistrate Judge Sanket Bulsara on Friday ordered Russell to appear Sept. 19 for a “change of plea” hearing.
This means Russell now intends to plead guilty, said a person familiar with the matter who declined to be identified because the matter isn’t public.
The case is one of the latest in the government’s crackdown on cryptocurrency fraud. In February, Eddy Alexandre, of Valley Stream, New York, pleaded guilty to a commodities fraud scheme in which he admitted swindling hundreds of millions of dollars from investors in his EminiFX cryptocurrency and foreign exchange platform by lying to them about how their money would be invested.
Russell’s lawyer, Karume James, declined to comment.
While Russell promised clients their money would be used for cryptocurrency investments and boasted he’d get them more than than 100% returns, he fabricated documents to show he had substantial liquidity, prosecutors have alleged.
Read More: Ex-Deutsche Bank Investment Banker Charged With Crypto Fraud
Much of the money Russell got from investors was “used for his personal benefit, to gamble, ans to repay other investors,” the government claims.
At the time the case was announced, prosecutors didn’t allege wrongdoing by Deutsche Bank and it said it cooperated with law enforcement during the investigation.
Russell was also sued by the Commodity Futures Trading Commission. The agency alleged he defrauded retail investors in a digital asset trading fund called “R3 Crypto Fund” that accepted Bitcoin, then misappropriated about $1 million from customers between November 2020 and July 2022. He promised he’d pool investors money and use it to trade digital asset commodities for the benefit of the fund. The CFTC alleges most of his investors railed to recover any of their investment.
Russell’s time awaiting trial hasn’t been trouble-free: Prosecutors in June accused him of violating the terms of his bond by going to gambling establishments and using other people’s names to obtain credit cards and access gaming websites.
A federal magistrate later ordered Russell to wear an electronic monitoring device and directed court officials to track his computer usage.
Russell worked at Deutsche Bank Securities Inc. from Aug. 20, 2018 through Dec. 13, 2021, according to FINRA Broker Check.
The case is US v. Russell, 23-cr-152, US District Court, Eastern District of New York (Brooklyn).
(Updates story with scheduled plea hearing in third paragraph.)
