Reginald Fowler, the alleged shadow banker for Tether and Bitfinex, is seeking a sentencing delay that could give him six more months as a free man.
Fowler was first indicted in 2019 for running a shadow banking ring that catered to digital asset firms that were getting rejected by mainstream banks. He ran several entities that provided these services, the biggest among them being Panama-based Crypto Capital Corp., which catered to embattled stablecoin project Tether and its sister company, Bitfinex.
Fowler is suspected of having played a key part in the “disappearance” of $850 million from Bitfinex, money which Tether loaned the exchange to cover up for the shortage, eventually culminating in a paltry $18.5 million fine in New York.
The former Northern Arizona Wranglers football player has been fighting the charges against him since then, but in April this year, he changed his tune and pleaded guilty to money laundering, operating an unlicensed money transmitting business, and fraud. His sentencing was initially scheduled for August 30 but was pushed by two weeks to September 13.
Now, his lawyer wants the sentencing pushed again, this time by six months. According to a report by independent journalist Amy Castor, who has been following the case since 2019, lawyer Edward Sapone wrote to Judge Andrew Carter on September 10 requesting the adjournment of the sentencing until at least March next year.
“I have been suffering with a serious medical condition that is requiring invasive medical treatments. In addition, a significant amount of information and material relevant to an analysis must be obtained from financial institutions, entities, and individuals located in Europe. The requested adjournment will afford me the opportunity to gather the relevant material and prepare a sentencing submission for the Court’s consideration while addressing my medical condition,” the lawyer wrote.
The letter further revealed that the United States government, through Assistant U.S. Attorney Sebastian Swett, had consented to the request. This makes it likely that Judge Carter will grant the request, affording Fowler six more months of freedom. He has been out on bail and resides in Chandler, Arizona.
Fowler faces 80 years in prison while Tether escaped unhurt
The Fowler case has been an interesting one. Initially, he faced lesser charges, and the U.S. prosecutors offered him a plea deal that would have seen him spend just five years in prison. He rejected this deal and pledged to fight the charges against him.
Unfortunately for him, this just got the prosecutors digging into his dealings with Tether and Bitfinex all the more and slapping him with five charges, ranging from bank fraud and money laundering to operating an unlicensed money transmitting business.
Now, Fowler faces a maximum of 80 years in prison for his crimes. Being 63 years old now, this is tantamount to life imprisonment.
The former minority owner of the NFL franchise Minnesota Vikings has made half-hearted efforts to defend himself in court, including by claiming to have been duped by Tether and Bitfinex. In one court appearance, he told the judge, “I did not know they were dealing with digital assets. My understanding was that all the money was lawfully clean money.”
His court process has also been mired in controversy, including with his legal team. In December 2020, law firm Hogan Lovells withdrew from Fowler’s defense, claiming he owed $600,000 in unpaid fees. This left him with just one lawyer, Sapone, and this played a big part in his decision to avoid trial and plead guilty.
Curiously, while Fowler faces eight decades behind bars, the two companies that got him in trouble have been cleared of their wrongdoing through a minute fine of $18.5 million. Tether allegedly loaned $750 million worth of client funds to Bitfinex after Fowler duped the exchange without disclosing this to clients or regulators. All that the Tether crime ring got for its involvement was a fine, and it has continued with the same illegal business model since then unabated.
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Ethereum, FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.
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