Utah Man Gets 3 Years in Prison for $3 Million Crypto Fraud and Unlicensed Money Business

Brian Garry Sewell, 54, of Washington County, received his sentence on January 15, 2025, from U.S. District Court Judge Ann Marie McIff Allen. The judge ordered him to serve 36 months in prison followed by three years of supervised release. Sewell must also pay over $3.8 million in restitution to his victims and federal agencies.

The U.S. Attorney’s Office for the District of Utah announced the sentencing, marking the end of a multi-year fraud operation that exploited cryptocurrency’s growing popularity.

The Investment Fraud Scheme

From December 2017 through April 2024, Sewell ran an elaborate investment fraud targeting at least 17 people. He operated an online platform called the American Bitcoin Academy, which he used to recruit victims.

Sewell made false claims about his background and experience to gain trust. He told investors he held a bachelor’s degree from Johns Hopkins University and a master’s degree from Stanford University. He also claimed he previously managed a successful cryptocurrency hedge fund that turned $250,000 into $9 million. None of these claims were true. In reality, Sewell only had a GED and no college degree.

He promoted the “Rockwell Fund,” a hedge fund he promised would use artificial intelligence and machine learning technology to generate high returns. Sewell collected over $2.9 million from victims who believed they were investing in this sophisticated operation. However, the fund never existed, and the promised AI technology was never developed.

Source: justice.gov

“Sewell preyed on his victims by lying about his experience and promising returns he could not deliver, leaving individuals and families to bear the consequences of his deception,” said FBI Special Agent in Charge Robert Bohls of the Salt Lake City office.

The Unlicensed Money Business

In a separate scheme, Sewell operated Rockwell Capital Management as an unlicensed money transmitting business from March to September 2020. His company converted more than $5.4 million in bulk cash into cryptocurrency for third parties.

Federal prosecutors revealed that Sewell’s clients included criminals engaged in fraud and drug trafficking. He charged fees for these conversion services but failed to register his business or comply with federal anti-money laundering laws designed to prevent the movement of illegal funds.

Between June 2020 and May 2021, Sewell transferred an additional $2.6 million through his company on behalf of other entities, all without proper licensing.

SEC Action and Settlement

The Securities and Exchange Commission filed civil charges against Sewell and Rockwell Capital Management in February 2024. The SEC focused on how Sewell targeted his American Bitcoin Academy students for the fraudulent investment scheme.

According to the SEC complaint, 15 students invested $1.2 million into the non-existent Rockwell Fund between early 2018 and mid-2019. Sewell converted their money to Bitcoin but never launched the promised hedge fund. The complaint also revealed that Sewell’s digital wallet was later hacked, and the Bitcoin was stolen.

“We allege that Sewell defrauded students in his online American Bitcoin Academy of over a million dollars through a series of lies about investment opportunities in his purported crypto hedge fund,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.

Sewell and Rockwell Capital Management settled the SEC charges without admitting or denying the allegations. Rockwell Capital Management agreed to pay $1,602,089 in disgorgement and interest, while Sewell paid a $223,229 civil penalty.

Additional Criminal Charges

Beyond the fraud and unlicensed money business charges, prosecutors also accused Sewell of mortgage fraud. In July 2020, he allegedly submitted false documents to obtain a federally insured home mortgage.

Court documents show he submitted fabricated W-2 forms claiming his 2019 salary was $180,000 and fake tax returns showing monthly income of $15,000. He also falsely stated he had 22 years of education when he had only earned a GED.

The investigation also resulted in charges against Keen Lee Ellsworth, 57, of Toquerville, Utah. Ellsworth, a former mayor of Toquerville, allegedly worked with Sewell by using his company, Ellsworth & Associates, to send more than $2.5 million to Sewell for conversion to cryptocurrency.

Growing Federal Enforcement

This case reflects increasing federal enforcement against cryptocurrency fraud at all levels, not just major exchanges and platforms. Multiple agencies collaborated on the investigation, including the FBI Salt Lake City Field Office, the Internal Revenue Service Criminal Investigation division, and Homeland Security Investigations.

“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 Jarom Gregory, Acting Special Agent in Charge of the IRS-CI Phoenix Field Office.

The case demonstrates that federal authorities are applying traditional financial crime laws to cryptocurrency operations. Running an unlicensed money transmitting business, making false statements to investors, and wire fraud all carry serious consequences regardless of whether transactions involve cash or digital assets.

U.S. Attorney Melissa Holyoak emphasized her office’s commitment to stopping criminals from exploiting the financial system. “We will continue to prosecute those who ignore statutes designed to stop the flow of illicit funds,” she stated.

The Price of Deception

Judge Allen’s sentence requires the terms to run concurrently, meaning Sewell will serve three years total rather than consecutive sentences. The restitution order includes $3,605,182 to defrauded investors, a mortgage lender, and a credit union, plus $217,727 to the Department of Homeland Security.

This case serves as a warning to anyone considering cryptocurrency fraud. Federal agencies have the tools and determination to track illegal crypto operations and hold perpetrators accountable. The collaborative investigation involving the FBI, IRS, and Homeland Security shows how seriously authorities take these crimes, which harm both individual victims and the broader financial system’s integrity.