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Reginald Fowler, a former NFL team owner, has been sentenced to six years of prison for operating as a “shadow bank” to the crypto sector, which involved over $700 million in unregulated transactions over a 10 month timespan in 2018.The 63-year-old, who was a co-owner of the Minnesota Vikings, was sentenced to a total of 75 months on bank fraud and money laundering charges, according to a statement from the United States Attorney’s Office in New York on June 5.Former co-owner of Minnesota Vikings sentenced to 75 months in prison for providing shadow banking services to cryptocurrency exchanges— US Attorney SDNY (@SDNYnews) June 5, 2023

It marks the end of a five-year long case that began when he was arrested in 2019 for alleged shadow banking. Shadow banking is a term used to describe (often illegal) bank-like activities that are carried out by non-bank entities. Fowler initially pleaded not guilty to all charges in 2020, but changed his plea to guilty in April 2022. In his latest statement, U.S. Attorney Damian Williams said that a string of lies enabled Fowler to mislead and deceive several banks:“Reginald Fowler evaded federal law by processing hundreds of millions of dollars of unregulated transactions on behalf of cryptocurrency exchanges as a shadow bank. He did so by lying to legitimate U.S. financial institutions, which exposed the U.S. financial system to serious risk.”Williams then said Fowler “victimized” the Alliance of American Football (AAF) — a former professional football league — by lying about his net worth in order to own a “substantial” stake in the league. “Let it be clear: this Office is committed to prosecuting people who lie to banks and skirt the law as a means to conduct their business,” the U.S. Attorney stressed. According to Williams, Fowler managed to pull this off by establishing Global Trading Solutions (GTS) around February 2018, which worked with Crypto Capital and other crypto firms operating out of Israel.There, Fowler, GTS and the crypto firms sidestepped a license by lying to banks in order to open accounts that were used to process crypto transactions. OK -now at crypto Fowler sentencing. It was set for 10: FOwler just came in at 10:19 am. Inner City Press is covering the case and will live tweet, thread below— Inner City Press (@innercitypress) June 5, 2023

Fowler opened a dozen of these accounts to facilitate these crypto transactions without the banks’ knowledge and failed to disclose GTS’s relationship with the crypto firms, Williams saiD:“At no point were FOWLER, GTS, nor any of the Crypto Companies ever licensed as a money transmitting business in the United States, as required by federal law.”Related: Cryptocurrency has become a playground for fraudstersOne of the crypto firms involved was iFinex Inc — the parent company of crypto exchange Bitfinex and stablecoin issuer Tether, it claimed. Other convictions included bank fraud conspiracy, operation of an unlicensed money-transmitting business, conspiracy to operate an unlicensed money-transmitting business, and wire fraud.In addition to the prison sentence, Fowler was ordered to forfeit $740 million and pay over $53 million in restitution to the AAF.Magazine: Unstablecoins: Depegging, bank runs and other risks loom

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