American Sentenced to Three Years for Crypto-Linked Fraud and Illegal Money Transfers

Source: Coindoo Original Title: American Sentenced to Three Years for Crypto-Linked Fraud and Illegal Money Transfers Original Link: A federal judge has closed the case on a Utah-based fraud operation that blended false investment promises with an underground crypto cash-conversion service, delivering a prison sentence that underscores how aggressively US authorities are pursuing crimes at the intersection of finance and digital assets.

The Scheme

For years, Brian Garry Sewell cultivated the image of a well-educated investment professional, presenting himself as the manager of a successful hedge fund and claiming academic credentials from elite universities. That narrative proved convincing enough to attract money from multiple investors, many of whom believed they were placing funds into a legitimate, professionally run strategy.

Investigators later determined that the investment vehicle never existed. Sewell’s academic claims were fabricated, and the money entrusted to him was not deployed in markets as promised. Instead, it was diverted elsewhere, leaving investors exposed and ultimately defrauded. Federal prosecutors say the scheme extracted nearly $3 million from victims over several years.

Crypto as a Parallel Operation

While the fake hedge fund drew in investor capital, authorities say Sewell was simultaneously operating a separate business centered on cryptocurrency. Using Rockwell Capital Management, he allegedly offered to convert large amounts of physical cash into digital assets for third parties, charging fees for the service.

This activity was not registered or licensed under US money-transmission laws. According to investigators, more than $5 million flowed through the operation, with some transactions linked to drug trafficking and other financial crimes. The lack of compliance controls made the service particularly attractive for clients seeking to move funds outside the regulated banking system.

Prosecutors argued that this side operation significantly elevated the severity of the case, as it did not merely involve fraud, but also facilitated the movement of illicit proceeds through crypto rails.

Court Ruling and Penalties

U.S. District Judge Ann Marie McIff Allen sentenced Sewell to three years in federal prison after he pleaded guilty to wire fraud and operating an unlicensed money-transmitting business. The sentences will run at the same time, followed by three years of supervised release once he completes his prison term.

The court also ordered substantial financial penalties. Sewell must repay more than $3.6 million to victims, including investors and financial institutions affected by the scheme. An additional payment exceeding $200,000 was ordered to reimburse government agencies involved in the case.

The investigation was carried out by the Federal Bureau of Investigation alongside IRS Criminal Investigation and Homeland Security Investigations. Officials involved in the case emphasized that coordination between agencies has become increasingly important as financial crimes grow more complex and digitally enabled.

Why This Case Stands Out

Unlike many crypto-related prosecutions, the core misconduct did not involve token issuance or market manipulation. Instead, cryptocurrency functioned as a tool within a broader criminal framework, used to move and disguise funds that would otherwise be flagged in traditional financial channels.

The sentencing adds to a growing body of enforcement actions signaling that unlicensed crypto services remain a priority target for regulators and prosecutors. As digital assets become more embedded in everyday finance, authorities continue to draw a clear line: using crypto to bypass oversight or launder money carries consequences comparable to those tied to traditional financial crime.

For investors and operators alike, the case serves as a reminder that credibility claims, licensing status, and compliance frameworks matter just as much in crypto as they do in conventional finance.