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Crypto Fraudster Faces Potential Seven-Year Prison Sentence for Allegedly Operating an Unregistered Bank
Damian Williams, the US attorney for the Southern District of New York, has requested a seven-year prison term for Reginald Fowler, the purported executive involved in a crypto shadow banking operation that was active in 2018.
As per an April 18 filing, Fowler’s legal proceedings have extended over five years, with his sentencing set for April 20.
US Attorney Requests Seven-Year Sentence for Defendant
In a letter addressed to US District Judge Andrew Carter, Williams detailed that Fowler was apprehended in 2019 and faced charges of unlawful money transfers, bank fraud, and conspiracy associated with shadow banking activities in an unlicensed money transmitting operation.
Shadow banks denote a category of unlicensed and unregulated entities that provide services akin to those of traditional commercial banks. They primarily offer lending services and are referred to as non-bank financial intermediaries.
Williams is advocating for the seven-year sentence on behalf of the government. He also proposed a sentencing range of 15 to 20 years to underscore the gravity of the crime and the necessity to uphold respect for the law.
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Fowler’s Shadow Banking Case
In 2018, Fowler established Global Trading Solutions (GTS) under the auspices of the overseas-based Crypto Capital Corp, an alleged crypto shadow bank. Together, they operated as an unlicensed money-transmitting business that provided crypto exchanges with improper access to the US banking system.
From February to October 2018, GTS and Crypto Capital facilitated approximately $750 million in crypto transactions with various firms, including Bitfinex, Binance, CEX.io, and QuadrigaCX. Fowler is accused of misleading these financial institutions and enabling criminals to launder their funds via his platform.
Additionally, Fowler defrauded a forthcoming football league – The Alliance of American Football (AAF) – by misrepresenting the origin of his wealth to obtain a stake in the organization. Ultimately, the defendant failed to meet scheduled payments to AAF, resulting in the league’s bankruptcy less than a year later.
Although Fowler was released on a $5 million bail after pleading not guilty to all charges against him in 2020, he changed his plea to guilty in 2022. As Fowler’s sentencing nears, Williams is also pursuing a restitution order of $53 million to AAF’s trustee and a forfeiture of $740 million.
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