Brian Garry Sewell, 54, of Washington County, obtained his sentence on January 15, 2025, from U.S. District Court docket Choose Ann Marie McIff Allen. The decide ordered him to serve 36 months in jail adopted by three years of supervised launch. Sewell should additionally pay over $3.eight million in restitution to his victims and federal companies.
The U.S. Legal professional’s Workplace for the District of Utah introduced the sentencing, marking the tip of a multi-year fraud operation that exploited cryptocurrency’s rising reputation.
The Funding Fraud Scheme
From December 2017 via April 2024, Sewell ran an elaborate funding fraud concentrating on at the very least 17 folks. He operated an internet platform referred to as the American Bitcoin Academy, which he used to recruit victims.
Sewell made false claims about his background and expertise to realize belief. He instructed buyers he held a bachelor’s diploma from Johns Hopkins College and a grasp’s diploma from Stanford College. He additionally claimed he beforehand managed a profitable cryptocurrency hedge fund that turned $250,000 into $9 million. None of those claims have been true. In actuality, Sewell solely had a GED and no faculty diploma.
He promoted the “Rockwell Fund,” a hedge fund he promised would use synthetic intelligence and machine studying know-how to generate excessive returns. Sewell collected over $2.9 million from victims who believed they have been investing on this refined operation. Nevertheless, the fund by no means existed, and the promised AI know-how was by no means developed.
Supply: justice.gov
“Sewell preyed on his victims by mendacity about his expertise and promising returns he couldn’t ship, leaving people and households to bear the implications of his deception,” mentioned FBI Particular Agent in Cost Robert Bohls of the Salt Lake Metropolis workplace.
The Unlicensed Cash Enterprise
In a separate scheme, Sewell operated Rockwell Capital Administration as an unlicensed cash transmitting enterprise from March to September 2020. His firm transformed greater than $5.four million in bulk money into cryptocurrency for third events.
Federal prosecutors revealed that Sewell’s purchasers included criminals engaged in fraud and drug trafficking. He charged charges for these conversion companies however did not register his enterprise or adjust to federal anti-money laundering legal guidelines designed to stop the motion of unlawful funds.
Between June 2020 and Might 2021, Sewell transferred an extra $2.6 million via his firm on behalf of different entities, all with out correct licensing.
SEC Motion and Settlement
The Securities and Alternate Fee filed civil charges towards Sewell and Rockwell Capital Administration in February 2024. The SEC targeted on how Sewell focused his American Bitcoin Academy college students for the fraudulent funding scheme.
In accordance with the SEC criticism, 15 college students invested $1.2 million into the non-existent Rockwell Fund between early 2018 and mid-2019. Sewell transformed their cash to Bitcoin however by no means launched the promised hedge fund. The criticism additionally revealed that Sewell’s digital pockets was later hacked, and the Bitcoin was stolen.
“We allege that Sewell defrauded college students in his on-line American Bitcoin Academy of over 1,000,000 {dollars} via a collection of lies about funding alternatives in his purported crypto hedge fund,” mentioned Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.
Sewell and Rockwell Capital Administration settled the SEC costs with out admitting or denying the allegations. Rockwell Capital Administration agreed to pay $1,602,089 in disgorgement and curiosity, whereas Sewell paid a $223,229 civil penalty.
Further Prison Costs
Past the fraud and unlicensed cash enterprise costs, prosecutors additionally accused Sewell of mortgage fraud. In July 2020, he allegedly submitted false paperwork to acquire a federally insured house mortgage.
Court docket paperwork present he submitted fabricated W-2 kinds claiming his 2019 wage was $180,000 and pretend tax returns displaying month-to-month revenue of $15,000. He additionally falsely said he had 22 years of training when he had solely earned a GED.
The investigation additionally resulted in costs towards Eager Lee Ellsworth, 57, of Toquerville, Utah. Ellsworth, a former mayor of Toquerville, allegedly labored with Sewell by utilizing his firm, Ellsworth & Associates, to ship greater than $2.5 million to Sewell for conversion to cryptocurrency.
Rising Federal Enforcement
This case displays growing federal enforcement towards cryptocurrency fraud in any respect ranges, not simply main exchanges and platforms. A number of companies collaborated on the investigation, together with the FBI Salt Lake Metropolis Discipline Workplace, the Inside Income Service Prison Investigation division, and Homeland Safety Investigations.
“This sentencing brings to an finish a multi-million-dollar funding fraud scheme that used the operation of an unlicensed cash transmitting enterprise to defraud buyers out of hundreds of thousands and steal lots of of 1000’s of {dollars} from the federal authorities,” mentioned Jarom Gregory, Performing Particular Agent in Cost of the IRS-CI Phoenix Discipline Workplace.
The case demonstrates that federal authorities are making use of conventional monetary crime legal guidelines to cryptocurrency operations. Working an unlicensed cash transmitting enterprise, making false statements to buyers, and wire fraud all carry critical penalties no matter whether or not transactions contain money or digital property.
U.S. Legal professional Melissa Holyoak emphasised her workplace’s dedication to stopping criminals from exploiting the monetary system. “We’ll proceed to prosecute those that ignore statutes designed to cease the circulate of illicit funds,” she said.
The Value of Deception
Choose Allen’s sentence requires the phrases to run concurrently, which means Sewell will serve three years whole slightly than consecutive sentences. The restitution order consists of $3,605,182 to defrauded buyers, a mortgage lender, and a credit score union, plus $217,727 to the Division of Homeland Safety.
This case serves as a warning to anybody contemplating cryptocurrency fraud. Federal companies have the instruments and willpower to trace unlawful crypto operations and maintain perpetrators accountable. The collaborative investigation involving the FBI, IRS, and Homeland Safety reveals how significantly authorities take these crimes, which hurt each particular person victims and the broader monetary system’s integrity.
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