The operator of a former shadow bank serving the cryptocurrency industry appears to have had a change of heart and has agreed to acknowledge his role in the illegal money-transmitting business. Reginald Fowler, who was arrested in April 2019, initially had pleaded not guilty, but it was announced in December that he would be making an unscheduled trip back to court this month. That visit has now taken place, and he has agreed to plead guilty to one count of violating U.S. law. However, the case is far from over.
Fowler, who at one point was a minority owner of the NFL’s Minnesota Vikings, was looking at four charges—bank fraud, conspiracy to commit bank fraud, operating an unlicensed money transmittal business and conspiracy to operate an unlicensed money transmittal business. Because he changed his plea, the U.S. Attorney’s Office decided to drop three of the charges, leaving only the charge of “operation of an unlicensed money transmittal business” intact.
The wayward businessman is said to have been behind Crypto Capital, which has been used by a number of global crypto exchanges, including Bitfinex, Binance, BitMEX, Kraken and QuadrigaCX, among others. The entity allowed the exchanges to bypass know-your-customer and money-laundering controls in what the Attorney’s Office deemed “a shadow bank that processed hundreds of millions of dollars of unregulated transactions on behalf of numerous cryptocurrency exchanges.”
Fowler reportedly set up the operations with the assistance of Ravid Yosef, an Israeli citizen. However, despite having been charged for his participation, Yosef has yet to be arrested.
Inner City Press, citing the actual court documents and minutes, indicates that a trial is scheduled to take place in a few months. This makes the guilty plea puzzling, since there shouldn’t be a need for a jury trial. The judge presiding over the case, judge Andrew L. Carter, apparently accepted Fowler’s single-word response of Yes to the charge, but there doesn’t appear to be any follow-through on his part.
The minutes from the case are the only source of an update, reading, “Minute Entry for proceedings held before Judge Andrew L. Carter, Jr.: Pretrial Conference as to (19-Cr-254-01) Reginald Fowler held on 1/17/2020. Defendant Reginald Fowler appears with attorneys James Mc Govern and Nat Rosenblum. AUSA [Assistant U.S. Attorney] Jessica Fender, AUSA Sebastian Swett and AUSA Samuel Rothschild for the Government. Joint Status Report due 1/31/20. Motions in Limine Due: 4/14/20. Responses Due: 4/21/20. Voir Dire & Proposed Jury Instructions Due: 4/14/20. Final Pre-Trial Conference 4/27/20 at 12:00 p.m. Jury Selection & Trial 4/28/20 at 9:30 a.m. Time excluded from 1/17/20 to 4/28/20 in the interest of justice. All bail conditions remain in effect.”
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