A former investment banker, who was a registered broker with the Financial Industry Regulatory Authority, was arrested yesterday in Brooklyn, New York, on criminal charges related to his alleged role in operating a cryptocurrency investment fraud scheme.

According to court documents, Rashawn Russell, 27, of Brooklyn, New York, allegedly engaged in a scheme to defraud multiple investors by inducing them to invest with him based on false promises that, among other things, he would use their funds for cryptocurrency investments and that the investors would earn large – and sometimes guaranteed – returns from those investments. Russell allegedly misappropriated much of the investors’ assets and used them for his personal benefit, to gamble, and to repay other investors.

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In addition, the indictment alleges that Russell repeatedly failed to repay investors’ principal investments and failed to provide investors with promised rates of return. After certain investors requested to be repaid their investments, Russell also allegedly falsely represented that he had wired them money.

Russell is charged with one count of wire fraud. If convicted, he faces a maximum penalty of 20 years in prison.

Assistant Attorney General Kenneth A. Polite, Jr. of the Justice Department’s Criminal Division, U.S. Attorney Breon Peace for the Eastern District of New York, and Inspector in Charge Eric Shen of the U.S. Postal Inspection Service (USPIS) Criminal Investigations Group made the announcement.

The USPIS is investigating the case.

Trial Attorney Kyle Crawford and Assistant Chief Scott Armstrong of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Drew Rolle for the Eastern District of New York are prosecuting the case.