Utah man sentenced to 3 Years for crypto fraud and unlicensed money operations

A Utah man who ran an online crypto academy and operated an illegal cash-to-crypto business has been sentenced to three years in federal prison, after federal prosecutors linked him to a string of fraudulent schemes that defrauded investors and facilitated unlicensed digital currency transfers totalling millions of dollars.

Brian Gary Sewell, 54, of Washington County, received a 36-month sentence along with three years of supervised release, according to a Jan. 15 announcement from the US Attorney’s Office for the District of Utah. 

Sewell’s history of crypto fraud

The sentence follows Sewell’s guilty plea to wire fraud, with the court ordering the prison term to run concurrently across two criminal cases after prosecutors outlined a series of offences that spanned more than six years across several states.

From late 2017 through early 2024, Sewell solicited investments from at least 17 individuals by falsely claiming professional credentials and promising outsized returns through a hedge fund that never materialised.

“Sewell’s fraudulent behavior led to him obtaining over $2.9 million,” the prosecutors said.

In a separate operation conducted between March and September 2020, Sewell managed Rockwell Capital Management, an entity that, according to investigators, was used to illegally convert large sums of cash into cryptocurrency. 

Authorities labelled the venture as an unlicensed money transmitting business that enabled third-party clients to exchange illicit funds.

“Sewell and his company converted bulk cash to cryptocurrency on behalf of third parties, including criminals engaged in fraud and drug trafficking,” prosecutors added.

According to prosecutors, the transactions, totalling more than $5.4 million, violated federal law.

“This sentencing brings to an end a multi-million-dollar investment fraud scheme that used the operation of an unlicensed money transmitting business to defraud investors out of millions and steal hundreds of thousands of dollars from the federal government,” said IRS-CI Phoenix Field Office Acting Special Agent in Charge Jarom Gregory.

The case also traces back to Sewell’s involvement with the American Bitcoin Academy, an online platform he operated.

The Securities and Exchange Commission formally charged Sewell and his firm in February 2024 in a civil enforcement action. 

Without admitting or denying the allegations, Sewell and Rockwell Capital agreed to settle the case by paying $1.6 million in disgorgement and interest, along with a $223,229 civil penalty.

DOJ probes Fed chair

The sentencing arrives at a time when the Department of Justice is also facing political scrutiny for launching a probe against Federal Reserve Chair Jerome Powell.

Powell recently confirmed he had received subpoenas related to his congressional testimony on the central bank’s costly renovation project, which has seen its budget swell from $1.9 billion to $2.5 billion over two years.

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