US Attorney Seeking 7 Years Sentence for Exec in Crypto Shadow Banking Case

Prosecutors in the United States are seeking a long term for an executive in a crypto shadow banking case that has been going on for five years. On April 18, US District Attorney Damian Williams filed a request before Reginald Fowler’s sentencing on April 20.

In 2019, Fowler, a former minority owner of the Minnesota Vikings NFL franchise, was arrested and charged with bank fraud, unlawful money transfers, and conspiracy to engage in shadow banking practices in relation to his alleged operation of an unlicensed money transfer company.

Williams is seeking a minimum sentence of seven years in prison on behalf of the government. However, he proposed a sentence of 15 to 20 years to represent the gravity of the offence. In 2018, Fowler founded Global Trading Solutions (GTS) under the auspices of Panama-based Crypto Capital Corp, an accused crypto shadow bank.

He was accused of defrauding financial institutions and acting as an unregistered remittance. He allegedly provided shadow banking services to several cryptocurrency exchanges, including Bitfinex, Binance, CEX.io, and QuadrigaCX, through Crypto Capital.

According to the petition, GTS and Crypto Capital processed more than $750 million in cryptocurrency transactions between February and October 2018, providing unlicensed crypto companies with illegal access to the US banking system.

Crypto Capital CEO Ivan Manuel Molina Lee was arrested in 2019 on charges of money laundering and involvement in a Colombian drug cartel. Crypto Capital played a key role in the court case involving Bitfinex’s failure to disclose an $850 million loss in customer cash. In February 2022, the companies were forced to pay an $18.5 million civil fine and shut down their trading operations in New York.

In 2020, Fowler pleaded not guilty to all charges and was released on $5 million bail; however, in April 2022, he resubmitted a guilty plea. “Reginald Fowler has committed a serious crime,” Williams concluded as his sentencing date drew near. Only a significant period of detention, at least 84 months, can represent that seriousness, foster law-abiding behavior, and provide effective deterrence.” Fowler asked for a six-month delay in September 2022, citing a serious medical illness.