Crypto Fraudster Might Serve Seven Years in Prison for Allegedly Running a Shadow Bank

Damien Williams, the US Attorney for the Southern District of New York, has requested a seven-year prison sentence for Reginald Fowler, an alleged executive in a crypto shadow banking business that ran in 2018.

According to Apr 18 filingFowler’s court case has dragged on for five years, and his sentencing is scheduled for April 20.

The US Attorney General demands a seven-year prison sentence for the defendant

In a demand letter 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 in connection with shadow banking practices in an unlicensed money transfer business.

Shadow banks refer to a group of unlicensed and unregulated bank-like entities that provide similar services as traditional commercial banks. They offer many services, especially lending, and are called non-bank financial intermediaries.

williams Pursuit The sentence is seven years in prison on behalf of the government. He also requested a period ranging from 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 offshore Crypto Capital Corp., a so-called crypto shadow bank. Collectively, they acted as an unlicensed money transfer company that gave cryptocurrency exchanges improper access to the US banking system.

Between February and October 2018, GTS and Crypto Capital processed nearly $750 million in crypto transactions with several companies, including Bitfinex, Binance, CEX.io, and QuadrigaCX. Fowler allegedly defrauded these financial institutions and allowed criminals to launder their money through his platform.

In addition, Fowler defrauded an upcoming soccer league – the Alliance of American Football (AAF) – by falsely representing the source of his wealth to obtain an interest in the club. Ultimately, the defendant was unable to make scheduled payments to the AAF, resulting in the league’s bankruptcy less than a year later.

Although Fowler was released on $5 million bail after pleading not guilty to all charges in 2020, he changed his plea to guilty in 2022. The verdict Williams is also seeking a $53 million restitution order to the AAF trustee and $740 million forfeiture.