Utah Resident Lands Three-Year Sentence for Wire Fraud and Unlicensed Crypto Operations

Another crypto cowboy gets cuffed—this time in Utah. Wire fraud and running an unlicensed digital asset business just earned one local a three-year federal vacation.

The Unregulated Frontier

Forget the "Wild West" narrative—this was just fraud. The case highlights the glaring gap between decentralized dreams and the very real, very centralized rule of law. Operating without a license isn't innovation; it's an invitation for the SEC and DOJ to come knocking.

The Compliance Wake-Up Call

This sentencing isn't an outlier; it's a precedent. Regulators aren't just watching—they're building cases. The message is clear: the era of "ask for forgiveness, not permission" is over for crypto businesses targeting U.S. customers. Proper licensing and transparent operations are now the minimum entry fee.

The sentence serves as a brutal reminder: in the high-stakes game of finance, even the decentralized kind, the house always wins—and the house has handcuffs. Maybe next time, try getting the paperwork done before the vault gets raided.

Sewell guilty of 6 years fraud schemes

Sewell admitted that he solicited money and crypto from at least 17 investors by misrepresenting his background and capabilities.

The government said Sewell’s false claims helped him swindle more than $2.9 million from investors. Much of the money was never invested as promised, prosecutors said, and victims suffered substantial losses. Sewell repeatedly reassured victims and continued to ask for more funds even as earlier promises went unfulfilled.

In addition to defrauding investors, the perpetrator admitted to running an unlicensed money transmitting business that converted bulk cash into cryptocurrency from March to September 2020. Sewell was in charge of Rockwell Capital Management, a business he led without registering as required by federal law. 

The company swapped more than $5.4 million in cash for crypto on behalf of third parties at a fee, which the DOJ found were involved in fraud and drug trafficking.

More court records detailing activity between June 2020 and May 2021 showed Sewell used Rockwell Capital Management to transfer more than $2.6 million on behalf of a separate entity through wire transfers, then converted them into digital currencies.

Neither Rockwell Capital Management nor related entities obtained licenses to operate as money transmitting businesses, authorities said.

“The US Attorney’s Office thanks our federal partners, and prosecutors for their hard work on this investigation and commitment to holding individuals like Sewell accountable,” said Attorney Melissa Holyoak.

Homeland Security Investigations Denver Special Agent in Charge Steve Cagen added that the department will continue to pursue individuals who MOVE illicit funds.

The investigation also resulted in charges against 57-year-old Toquerville, Utah resident Keen Lee Ellsworth. Sewell and Ellsworth worked together, as the latter used his entity, Ellsworth & Associates, to send more than $2.5 million to Sewell.

US law enforcement mull closure of crypto ATMs

The case comes as law enforcement agencies warn of crypto-related fraud nationwide, specifically on the front of crypto ATMs. The FBI said $240 million was lost to ATM scams in the first six months of 2025, double the pace seen during the same period in 2024.

“Cases started flowing my way where people were getting ripped off by cryptocurrency machines,” Spokane Police Detective Tim Schwering told CNBC, adding that the funds are moved overseas to China, Russia, and Nigeria, so officers “couldn’t get to anyone or get the money back.”

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