Us prosecutors seek substantial sentence for Crypto Capital fraud

In this post:

  • Prosecutors highlight Fowler’s establishment of GTS and collaboration with Crypto Capital as a significant factor in their request for a substantial sentence.
  • Fowler’s activities were deemed illegal due to the lack of proper licensing from US agencies.
  • Crypto Capital’s role as a shadow bank highlights the unregulated nature of the cryptocurrency industry at the time and the risks associated with such operations.

US prosecutors are seeking a seven-year prison sentence and the forfeiture of over $720 million for Reginald Fowler, who has admitted to bank fraud in connection with Crypto Capital Corp. Fowler, now 64, played a pivotal role in what prosecutors describe as a serious criminal enterprise, according to court documents.

According to prosecutors, Fowler established a firm called Global Trading Solutions (GTS) in February 2018 and worked in conjunction with Crypto Capital Corp, which had been set up by Israeli brothers Oz and Ravid Yosef. 

The purpose of GTS and Crypto Capital was to facilitate the exchange of fiat money for cryptocurrency. However, both entities operated without obtaining the necessary license from US agencies, rendering their activities illegal in transmitting money.

In April of the previous year, Fowler pleaded guilty to five counts, including bank fraud conspiracy and operation of an unlicensed money-transmitting business. The now-defunct Crypto Capital was led by Ivan Manuel Molina Lee, a Canadian-Panamanian individual who was arrested in Poland in 2019 on money laundering charges.

Crypto Capital, often referred to as a “shadow bank,” was established to handle payments for cryptocurrency startups that encountered difficulties in finding traditional banks willing to work with digital currencies at the time. The entity had connections to prominent cryptocurrency companies such as Tether and Bitfinex, which had entrusted $850 million to Crypto Capital for processing customer withdrawal requests. However, these funds were ultimately lost, resulting in an $18.5 million fine from the New York Attorney General’s office.

Fowler to be sentenced in Manhattan court by US District Judge Andrew L. Carter 

Fowler’s fraudulent activities extended beyond his involvement with Crypto Capital. Prosecutors alleged that between June 2018 and February 2019, Fowler lied about the amount and source of his wealth in order to secure an ownership stake in the Alliance of American Football (AAF), a rival league to the NFL that folded within eight weeks of its inaugural season. 

Fowler, a former minority owner of the Minnesota Vikings NFL team, provided false information about his wealth to AAF’s co-founder Charlie Ebersol, claiming that his wealth was primarily in cash. However, it was revealed that the accounts Fowler showed were tied to his illegal money service business, GTS/Crypto Capital, and the funds were used to “effectively steal” from his other clients.

Fowler is scheduled to be sentenced in Manhattan court by US District Judge Andrew L. Carter on Thursday. Prosecutors have emphasized the gravity of Fowler’s actions and the significant role he played in the illegal activities of GTS and Crypto Capital in their request for a substantial sentence.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Ryan Salame
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