Reginald Fowler, a former co-owner of the Minnesota Vikings and prominent figure in the NFL, has been handed a six-year sentence after being found guilty of running a “shadow bank” operation within the crypto industry.
The sentencing follows his involvement in over $700 million worth of unregulated transactions over a 10-month period in 2018.
$700 million shadow bank scheme
The US Attorney’s Office in New York issued a statement on June 5, announcing Fowler’s sentencing of 75 months on charges of bank fraud and money laundering. This development concludes a five-year-long legal case that began with Fowler’s arrest in 2019 for his alleged participation in shadow banking activities.
Shadow banking refers to bank-like activities conducted by non-bank entities, often considered illegal. Initially pleading not guilty to all charges in 2020, Fowler eventually changed his plea to guilty in April 2022.
In the latest statement, US Attorney Damian Williams condemned Fowler’s deceitful actions, stating that a series of lies enabled him to mislead and deceive several banks. Fowler bypassed federal regulations by processing hundreds of millions of dollars in unregulated transactions as a shadow bank for cryptocurrency exchanges, thereby posing severe risks to the US financial system.
Williams further highlighted Fowler’s fraudulent actions that victimized the Alliance of American Football (AAF), a former professional football league. Fowler misrepresented his net worth to obtain a substantial stake in the league.
According to Williams, Fowler established Global Trading Solutions (GTS) around February 2018 to collaborate with Crypto Capital and other cryptocurrency firms based in Israel. Through deceitful means, Fowler, GTS, and the crypto firms opened bank accounts without disclosing their relationship, enabling them to process cryptocurrency transactions.
As mandated by federal law, Fowler successfully orchestrated these illicit activities without obtaining the necessary license as a money-transmitting business.
Among the implicated crypto firms was iFinex Inc, the parent company of Bitfinex, a prominent cryptocurrency exchange, and Tether, a widely used stablecoin.
Fowler’s convictions included bank fraud conspiracy, operating an unlicensed money-transmitting business, conspiracy to run an unlicensed money-transmitting business, and wire fraud.
In addition to the prison sentence, Fowler has been ordered to forfeit $740 million and pay over $53 million in restitution to the AAF.
Williams emphasized the commitment of his office to prosecute individuals who engage in deceptive practices and skirt the law for their business gains.