US Attorney seeks 7-year sentence for exec in crypto shadow banking case
A long sentence is being sought by United States prosecutors for an executive in a crypto shadow banking case that has dragged on for five years.
On April 18, U.S. District Attorney Damian Williams filed a request in advance of the sentencing of Reginald Fowler which is scheduled for April 20.
Fowler, the former minority owner of the Minnesota Vikings NFL team, was originally arrested and charged with bank fraud, illegal money transfers and conspiracy connected to shadow banking practices in 2019 over his alleged operation of an unlicensed money transmitting business.
On behalf of the government, Williams is requesting a sentence of at least seven years imprisonment. However, he suggested a range of 15 to 20 years to reflect the seriousness of the offense.
Fowler established a firm called Global Trading Solutions (GTS) in 2018 under the umbrella of the Panama-based Crypto Capital Corp, an alleged crypto shadow bank.
He was accused of acting as an unlicensed money transmitter and deceiving financial institutions. Through Crypto Capital, he allegedly provided shadow banking services to several crypto exchanges including Bitfinex, Binance, CEX.io and QuadrigaCX.
Between February and October 2018 GTS and Crypto Capital processed approximately $750 million in cryptocurrency transactions providing unlawful access to the U.S. banking system for unlicensed crypto firms, according to the filing.
Ivan Manuel Molina Lee, the head of Crypto Capital, was arrested in 2019 on suspicion of money laundering and being involved in a Columbian drug cartel.
Crypto Capital was a key player in the court case regarding Bitfinex’s failure to disclose the loss of $850 million in customer funds. That case was settled in February 2022 with the firms ordered to pay $18.5 million in civil penalties and shut down New York trading operations.
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In 2020 Fowler pleaded not guilty to all charges and was released on $5 million bail, however, he reentered a guilty plea in April 2022. As his sentencing approaches Williams concluded:
“Reginald Fowler has committed serious crimes. Only a significant period of incarceration, of at least 84 months imprisonment, could reflect that seriousness, promote respect for the law, and afford adequate deterrence.”
In September 2022, Fowler requested a six-month adjournment citing a serious medical condition.
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