US Department of Justice To Arrest Defendant In Crypto Exchange’s Shady Banking Case
Prosecutors from the U. S. Department of Justice are currently following Reginald Fowler, as they have orders to detain him until his trial, which is set to happen soon. He is the defendant in a case with unlicensed money transmission businesses.
What is the relationship between this and the crypto world? Fowler may have used Bitfinex to process the funds. The exchange is currently not in a very good situation as it has received money from Tether (which share the same owners with Bitfinex) because of one of its payment processors, which had frozen its money.
The orders can be seen in a court filing which was shared here. At the moment, they cannot be seen on the official channel, the Public Access to Court Electronic Records (PACER) system.
Basically, in the document, U. S. Attorney Elizabeth Strange, aided by the assistant U. S. Attorney Gary Restaino, affirm that the defendant might flee from the country in case he is not held in custody. He has shown some level of disregard for the FBI investigation last year and the scheme involved a lot of money.
With so much money, he could easily be able to avoid prosecution and to access his funds from any place, so it would make sense for him to flee from the country, they affirmed in the report.
According to the official documents, the scheme received at least $740 million USD in 2018 alone. The money was held both in national and international banks, adding up to six different accounts which held $345 million USD. Only $50 million USD of all the money was being held in the United States and only this much could be frozen.
At the moment, Fowler is currently being charged with bank fraud and conspiracy to commit bank fraud and also the crime of conspiracy to operate an unlicensed money transmission service. He was charged together with Ravid Yosef, a Tel Aviv-based associate in the scheme.
Fowler allegedly used his company Crypto Capital in order to provide services illegally for crypto companies. In fact, the whole Bitfinex/Tether scandal happened because Crypto Capital froze the funds of Bitfinex, which may have only happened because the funds were frozen by the government.
Bitfinex lost access to $850 million USD at the time, which is why they decided to take money from Tether and the whole trouble started. The filing affirmed that the “shadow bank” of the defendant failed to pay back $851 million USD, so it may actually be Tether that was burned out by the company as the funds were frozen.
Fowler May Be Involved In Even More Crimes
It looks like Fowler may be involved in actually more crimes than he is being charged. For instance, he is suspected to have counterfeited over $14,000 USD in bills (mostly using $100 USD bills). The amount of money was found in his office when the police searched it.
According to the filing, this may even indicate that this could be a very complex case in which the criminal is facing several charges and others are still to be discovered.
It is because of this that they are trying to arrest him right now. In case he is convicted, he may face up to 30 years in jail for bank fraud charges.