It’s rare for a former investment banker to stand trial in the United States for crypto fraud. That’s what happened in New York, though. Authorities arrested Rashawn R. in the Brooklyn borough on Tuesday. That comes from one letter from the public prosecutor out. He is said to have deceived several investors using a Ponzi scheme.
According to the indictment, the former Wall Street broker and investment banker at Deutsche Bank harmed at least four people between November 2020 and August 2022. With false promises, he lured his victims into investing in “R3‘, a crypto fund under his control. In addition, profits for investors should be achieved: 25 percent guaranteed return after the first three months, less a management fee of 20 percent. He boasted about a strategy for trading altcoins, with which he sometimes “generated” returns of up to 100 percent for investors. The four victims each invested between 90,000 and 295,000 US dollars. R. advised investors to reinvest the “profits” made.
Gambling and luxury life instead of returns
In truth, however, the investment strategy was nothing more than a Ponzi scheme, the public prosecutor continues. “The funds were used for personal benefit, gambling and paying out other investors.” In order to maintain the scam, R. allegedly forged documents. The indictment describes a process in February 2021 in which the fraudster sent one of the victims a screenshot of his depot. It showed a balance of $355,000, but the actual account balance was only $35,000, according to prosecutors.
The scam was finally discovered when several investors demanded their funds be paid out. R. then falsified transactions on the accounts of the creditors. In one instance, the 27-year-old is said to have sent a victim a screenshot that allegedly certified a $75,000 transfer confirmation. However, the money never arrived.
The case against the former investment banker is now in New York. The prosecutor seeks meanwhile, after further victims of the 27-year-old. If convicted, R. faces up to 20 years in prison.