Reginald Fowler, a well-known figure in the NFL and former co-owner of the Minnesota Vikings, has received a six-year prison sentence following his conviction for orchestrating a crypto "shadow bank" scheme. Fowler's illegal activities involved operating a financial operation within the cryptocurrency industry that operated outside the boundaries of legal and regulated banking systems. The court's decision reflects the severity of his crimes and serves as a reminder of the need for accountability and compliance within the evolving crypto landscape.
"$700M Shadow Bank Scandal Ends with Prison Term"
The US Attorney's Office in New York has issued a statement announcing the sentencing of Reginald Fowler to 75 months in prison on charges of bank fraud and money laundering. This development marks the culmination of a five-year-long legal case that began with Fowler's arrest in 2019 for his alleged involvement in shadow banking activities.
Shadow banking refers to bank-like activities conducted by non-bank entities, often considered illegal. Initially pleading not guilty to all charges in 2020, Fowler eventually changed his plea to guilty in April 2022.
In the recent statement, US Attorney Damian Williams strongly condemned Fowler's deceptive actions, highlighting a series of lies that enabled him to mislead and deceive several banks. Fowler circumvented federal regulations by operating as a shadow bank for cryptocurrency exchanges, processing hundreds of millions of dollars in unregulated transactions, posing significant risks to the US financial system.
Williams further emphasized Fowler's fraudulent actions, which victimized the Alliance of American Football (AAF), a former professional football league. Fowler misrepresented his net worth to secure a substantial stake in the league.
According to Williams, Fowler established Global Trading Solutions (GTS) around February 2018 to collaborate with Crypto Capital and other Israeli-based cryptocurrency firms. Through deceitful means, Fowler, GTS, and the crypto firms opened bank accounts without disclosing their relationship, enabling them to process cryptocurrency transactions.
Fowler orchestrated these illicit activities without obtaining the necessary license as a money-transmitting business, as mandated by federal law.
Among the implicated cryptocurrency firms was iFinex Inc, the parent company of Bitfinex, a prominent cryptocurrency exchange, and Tether, a widely used stablecoin. Fowler's convictions included bank fraud conspiracy, operating an unlicensed money-transmitting business, conspiracy to run an unlicensed money-transmitting business, and wire fraud.
In addition to the prison sentence, Fowler has been ordered to forfeit $740 million and pay over $53 million in restitution to the AAF.
Williams underscored his office's commitment to prosecuting individuals who engage in deceptive practices and evade the law for personal gain.
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