Former NFL team owner Reggie Fowler gets 6 years for crypto shadow banking

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Former NFL team owner Reginald Fowler was sentenced to six years in prison for operating as a shadow bank in the crypto industry, which involved more than $700 million in unregulated transactions on a 10 month period in 2018.

The 63-year-old, who was a co-owner of the Minnesota Vikings, was sentenced to a total of 75 months in prison for bank fraud and money laundering, according to a statement from the United States Attorney’s Office in New York on June 5. .

It marks the end of a five-year case that began when he was arrested in 2019 for alleged shadow banking. Shadow banking is a term used to describe (often illegal) banking-like activities that are carried out by non-banking entities.

Fowler initially pleaded not guilty to all charges in 2020, but changed his guilty plea in April 2022.

In his final statement, U.S. Attorney Damian Williams said a series of lies allowed Fowler to mislead and deceive several banks:

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

Williams went on to say that Fowler victimized the Alliance of American Football (AAF), a former professional football league, by lying about his net worth in order to hold a substantial stake in the league.

Let’s be clear: this Bureau is committed to prosecuting people who lie to banks and circumvent the law as a means of conducting their business, the federal prosecutor stressed.

According to Williams, Fowler succeeded in committing his crimes by founding Global Trading Solutions (GTS) around February 2018, which worked with Crypto Capital and other crypto companies operating out of Israel.

There, Fowler, GTS, and the crypto companies circumvented a license by lying to banks in order to open accounts that were used to process crypto transactions.

Fowler opened a dozen such accounts to facilitate these crypto transactions without the knowledge of the banks and did not disclose GTS’s relationship with the crypto companies, Williams said:

At no time were FOWLER, GTS, or any of the crypto companies licensed as a money transfer business in the United States, as required by federal law.

Related: Cryptocurrency has become a playground for fraudsters

One of the crypto companies involved was iFinex Inc, the parent company of crypto exchange Bitfinex and stablecoin issuer Tether, he claimed.

Other convictions include conspiracy to bank fraud, operating an unlicensed money transfer business, conspiracy to operate an unlicensed money transfer business, and wire fraud.

In addition to the prison sentence, Fowler was ordered to forfeit $740 million and pay more than $53 million in restitution to the AAF.

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