April 11 (Cointime) - Rashawn Russell, a former investment banker and registered broker, is set to be arraigned today in federal court in Brooklyn on charges of perpetrating a cryptocurrency investment fraud scheme. Russell was arrested yesterday and will appear before United States Magistrate Judge Ramon E. Reyes, Jr. this afternoon.

The arrest and indictment were announced by United States attornies. Court documents allege that Russell defrauded multiple investors by falsely promising large and sometimes "guaranteed" returns on their cryptocurrency investments. Instead, Russell misappropriated the investors' funds for personal use, gambling, and repaying other investors.

“As alleged, Russell turned the demand for cryptocurrency investments into a scheme to defraud numerous investors in order to fund his lifestyle,” stated United States Attorney Peace. “This Office will continue to aggressively pursue fraudsters perpetrating these schemes against investors in the digital asset markets.”   

Russell is also accused of lying to investors about the status of their investments and fabricating documents to support his claims. In one instance, he allegedly sent an investor an altered image of a bank balance to show his supposed liquidity. In another case, when an investor requested their money back, Russell sent a fake bank wire transfer confirmation instead of returning the funds.

The charges in the indictment are allegations, and Russell is presumed innocent until proven guilty beyond a reasonable doubt. If convicted, he faces a maximum sentence of 20 years in prison.