Reggie Fowler Gets 6+ Years for Crypto Program, Sentenced to Lose $740M

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US federal prosecutors have gotten their way in the Reginald Fowler case, with a New York judge handing down a roughly six-year prison sentence to the convicted crypto fraudster.

Fowlers’ conviction stems from his evading federal law by processing hundreds of millions of dollars in unregulated transactions on behalf of cryptocurrency exchanges as a shadow bank, U.S. Attorney Damian said Monday. Williams in a statement.

In April, prosecutors sought a seven-year prison sentence, plus fines totaling more than $720 million.

The bank fraud is linked to the time Fowlers spent running Global Trading Solutions (GTS). The former Minnesota Vikings minority owner pleaded guilty last April to lying to banks in order to process more than $700 million in unregulated crypto transactions, the Southern District of New York said in a statement.

Fowler evaded federal law by processing hundreds of millions of dollars in unregulated transactions on behalf of cryptocurrency exchanges as a shadow bank, Williams said. He did this by lying to legitimate US financial institutions, which exposed the US financial system to serious risk.

The shadow bank, Crypto Capital Corp, was created to process transactions for crypto startups operating by choice or necessity outside of the traditional banking system.

Bitfinex has also been struck with Crypto Capital, giving the payment processor $850 million to process customer withdrawals. New York Attorney General Letitia James alleged in 2021 that Tether loaned Bitfinex the $850 million to cover the loss.

Prosecutors said Fowler personally opened dozens of accounts that handled crypto transactions without the knowledge of the banks involved.

Fowler was ordered to forfeit $740.2 million of the proceeds.

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