American lawyer asks for 7 years in prison for leader in crypto shadow banking case
A long sentence has been requested by US prosecutors for a leader in a crypto shadow banking case that has lasted five years.
On April 18, U.S. District Attorney Damian Williams filed a request in advance of Reginald Fowler’s sentencing, which is scheduled for April 20.
Fowler, the former minority owner of the Minnesota Vikings NFL team, was originally arrested and charged with wire fraud, wire fraud and conspiracy related to shadow banking practices in 2019 for his alleged operation of an unlicensed money transmission business.
On behalf of the government, Williams is asking for a sentence of at least seven years in prison. However, he suggested a range of 15 to 20 years to reflect the seriousness of the offence.
Fowler established a firm called Global Trading Solutions (GTS) in 2018 under the umbrella of Panama-based Crypto Capital Corp, an alleged crypto shadow bank.
He was accused of acting as an unlicensed money transmitter and defrauding 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 that provided illegal 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 Colombian drug cartel.
Crypto Capital was a key player in the lawsuit regarding Bitfinex’s failure to disclose the loss of $850 million in customer funds. This case was settled in February 2022 with the firms ordered to pay $18.5 million in civil penalties and to cease trading in New York.
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In 2020, Fowler pleaded not guilty to all charges and was released on $5 million bail, but he re-entered the plea in April 2022. As sentencing approaches, Williams concluded:
“Reginald Fowler has committed serious crimes. Only a substantial period of imprisonment, of at least 84 months imprisonment, can reflect this seriousness, promote respect for the law and provide sufficient deterrence.”
In September 2022, Fowler requested a six-month postponement citing a serious medical condition.
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