Crypto Fraudster Might Serve Seven Years in Prison for Allegedly Running a Shadow Bank
Damian Williams, the US attorney for the Southern District of New York, has requested a seven-year sentence for Reginald Fowler, the alleged executive in a crypto shadow banking business that operated in 2018.
According to an April 18 filing, Fowler’s court case has dragged on for five years, and he is scheduled to be sentenced on April 20.
US Attorney Seeks Seven-Year Sentence for Defendant
In a letter of request written to US District Judge Andrew Carter, Williams explained that Fowler was arrested in 2019 and charged with illegal money transfers, bank fraud, and conspiracy related to shadow banking practices in unlicensed money transmitting business.
Shadow banks refer to a group of unlicensed and unregulated bank-like entities that provide similar services like traditional commercial banks. They offer many services, mainly lending, and are called non-bank financial intermediaries.
Williams is seeking the seven-year sentence on behalf of the government. He also requested a range of 15 to 20 years to show the seriousness of the offense and the need to promote respect for the law.
Fowler’s Shadow Banking Case
In 2018, Fowler launched Global Trading Solutions (GTS) under the umbrella of overseas-based Crypto Capital Corp, an alleged crypto shadow bank. They collectively functioned as an unlicensed money-transmitting business that gave crypto exchanges inappropriate access to the US banking system.
Between February and October 2018, GTS and Crypto Capital processed roughly $750 million in crypto transactions with several firms, including Bitfinex, Binance, CEX.io, and QuadrigaCX. Fowler allegedly deceived these financial institutions and allowed criminals to launder their funds through his platform.
In addition, Fowler defrauded an upcoming football league – The Alliance of American Football (AAF) – by falsely representing the source of his wealth to acquire a stake in the club. Eventually, the defendant could not make scheduled payments to AAF, leading the league to bankruptcy less than a year later.
Although Fowler was released on a $5 million bail after pleading not guilty to all charges brought against him in 2020, he changed his plea to guilty in 2022. As Fowler’s sentencing approaches, Williams is also seeking a restitution order of $53 million to AAF’s trustee and a forfeiture of $740 million.
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Filed under: Bitcoin - @ April 23, 2023 11:45 am