Former NFL team owner Reginald Fowler sentenced to 6 years in prison for being a “shadow bank” for the cryptocurrency industry, which involved more than $700 million in a 10-month span in 2018 unregulated transactions. The 63-year-old, a co -owner of the Minnesota Vikings, was sentenced to 75 months in prison on bank fraud and money laundering charges, according to a June 5 statement from the New York US Attorney's Office. .
It marks the end of a five-year case that began with his arrest in 2019 on suspicion of shadow banking. Shadow banking is a term used to describe (often illegal) bank-like activities carried out by non-bank entities. Fowler initially pleaded not guilty to all charges in 2020, but reversed his plea in april 2022.
In his latest statement, US Attorney Damian Williams said the string of lies allowed Fowler to mislead and defraud several banks: “Reginald Fowler evaded federal law as a shadow banker processing hundreds of millions of dollars in unregulated transactions on behalf of cryptocurrency exchanges. He did so by lying to legitimate US financial institutions, exposing the US financial system to serious risk." Williams then said Fowler had "hurt" the American Football Association (AAF), a former professional football league, by lying about his net worth in order to own a "substantial" stake in the league. "To be clear: This office is committed to prosecuting people who lie to banks and circumvent the law as a way to do business," the US Attorney stressed.
According to Williams, Fowler succeeded in his crime by establishing Global Trading Solutions (GTS) around February 2018, which partnered with Crypto Capital and other crypto firms operating out of Israel. There, Fowler, GTS, and crypto companies surround vented licenses by lying to banks about opening accounts for processing crypto transactions. Fowler opened more than a dozen of these accounts without the bank's knowledge to facilitate these crypto transactions, Williams said, without disclosing GTS' ties to crypto firms:
“Neither FOWLER, GTS, or any cryptocurrency company has ever been licensed to transmit money in the United States as required by federal law.” It claims that one of the cryptocurrency companies involved is iFinex Inc, the parent company of cryptocurrency exchange Bitfin ex and stablecoin issuer Tether.
Other convictions include conspiracy to commit bank fraud, operating an unlicensed money transmission business, conspiracy to operate an unlicensed money transmission business, and wire fraud. In addition to his prison sentence, Fowler was ordered to forfeit $740 mill ion and pay more than $53 million in restitution to the AAF.
