Damian Williams, the US attorney for the Southern District of New York, is requesting a seven-year sentence for Reginald Fowler, who allegedly served as an executive in an illegal crypto shadow banking business in 2018.
According to a filing dated April 18th, Fowler’s court case has lasted five years, and his sentencing is scheduled for April 20th.
US Attorney Seeks Seven-Year Sentence for Defendant
In a letter to US District Judge Andrew Carter, Williams outlined that Fowler was arrested in 2019 and charged with illegal money transfers, bank fraud, and conspiracy related to shadow banking practices in unlicensed money transmitting business.
Shadow banks are unlicensed and unregulated entities that offer services similar to traditional commercial banks. These entities are known as non-bank financial intermediaries, mainly for lending purposes.
Williams is seeking a seven-year sentence on behalf of the government and has requested a range of 15 to 20 years to demonstrate the severity of the offense and the importance of upholding the law.
Fowler’s Shadow Banking Case
In 2018, Fowler launched Global Trading Solutions (GTS), which was part of the overseas-based Crypto Capital Corp, an alleged crypto shadow bank. Together, they operated as an unlicensed money-transmitting business that allowed crypto exchanges inappropriate access to the US banking system.
Between February and October 2018, GTS and Crypto Capital processed approximately $750 million in crypto transactions with several companies, including Bitfinex, Binance, CEX.io, and QuadrigaCX. Fowler allegedly deceived the financial institutions, allowing criminals to launder their funds through his platform.
Furthermore, Fowler defrauded the Alliance of American Football (AAF), a new football league, by misrepresenting the source of his wealth to obtain a stake in the club. Ultimately, the defendant failed to make scheduled payments to AAF, causing the league to go bankrupt less than a year later.
Although Fowler pleaded not guilty to all charges brought against him in 2020 and was released on $5 million bail, he changed his plea to guilty in 2022. As Fowler’s sentencing approaches, Williams is also requesting a restitution order of $53 million to AAF’s trustee and a forfeiture of $740 million.