Date: April 25, 2022 Contact: newsroom@ci.irs.gov Damian Williams, the United States Attorney for the Southern District of New York, announced that earlier today, Reginald Fowler pled guilty to bank fraud, bank fraud conspiracy, operation of an unlicensed money transmitting business, conspiracy to operate an unlicensed money transmitting business, and wire fraud. Fowler committed the bank fraud and unlicensed money transmitting business offenses in connection with his work for Crypto Capital, a payment processor that provided fiat-currency banking services to various cryptocurrency exchanges through a series of bank accounts opened under false pretenses. As part of the scheme, Crypto Capital and Fowler fraudulently processed transactions equaling approximately $750 million in deposits and withdrawals from such exchanges. In addition, Fowler defrauded the Alliance of American Football ("AAF") by, among other things, claiming that millions of dollars belonging to Crypto Capital and/or Global Trading Solutions customers were instead his own assets, which he was free to use to secure his investments in the AAF. Based on those misrepresentations, Fowler acquired a significant investment stake in the AAF yet was unable to fund that investment, which contributed to the AAF's demise. Two of Fowler's co-conspirators, Oz Yosef and Ravid Yosef, remain at large. U.S. Attorney Damian Williams said: "Reginald Fowler helped process hundreds of millions of dollars of unregulated transactions on behalf of numerous cryptocurrency exchanges, skirting the anti-money laundering safeguards required of licensed institutions that ensure the U.S. financial system is not used for criminal purposes, and lying to U.S. banks whose own policies would otherwise have prevented it. As the trade in cryptocurrencies continues to grow, it is essential that it be conducted in a lawful and transparent manner that does not permit its use by criminal actors. Today's guilty plea reflects this Office's continued commitment to the investigation and prosecution of those in the cryptocurrency sector who seek to continue to operate in the shadows." According to the allegations in the Indictment, the Superseding Indictments, and statements made during the plea and other proceedings in the case[1]: In or about February 2018, Reginald Fowler established Global Trading Solutions LLC ("GTS") and began working with Crypto Capital and other related companies (the "Crypto Companies") , which were operated by Israeli nationals Oz Yosef and Ravid Yosef, among others. The Crypto Companies marketed themselves as providing a seamless way for individuals to exchange government-backed, or "fiat," currency for cryptocurrency. The Crypto Companies offered these services at a time when traditional banks were reluctant to handle cryptocurrency transactions. Because of the demand for the Crypto Companies' services, a number of cryptocurrency exchanges began using the Crypto Companies to process their fiat-to-cryptocurrency transactions. In reality, the Crypto Companies lied to banks in order to open accounts that were used to process cryptocurrency transactions without the banks' knowledge. Fowler opened dozens of such accounts in the United States and around the world. In general, he represented to banks that GTS and related companies were engaged in real estate and that funds coming into the GTS bank accounts represented real estate investments or rental payments from properties GTS developed. Fowler did not disclose GTS's involvement with the Crypto Companies and the fact that it was operating as a payment processor for hundreds of millions of dollars in cryptocurrency transactions. Additionally, Fowler directed other individuals to include false information on wire transfer instructions to further deceive banks about the nature of GTS's business. These false statements would suggest that outgoing wires were related to real estate transactions. In email communications with Ravid Yosef and others, the co-conspirators discussed the need to ensure that wire narratives were consistent with the false information Fowler had provided banks at account opening. As banks became aware of Fowler's misrepresentations, they shut down GTS bank accounts and FOWLER would move the scheme to new banks. In less than ten months, Fowler processed approximately $750 million in cryptocurrency transactions in various currencies, nearly $600 million in United States dollars. Even though Fowler was receiving and directing monetary transactions on behalf of third parties, neither he, GTS, nor any of the Crypto Companies were ever licensed as a money transmitting business in the United States, as required by federal law. Additionally, in 2018, Fowler defrauded the AAF, a short-lived professional football league, in connection with his acquisition of a significant ownership stake in the league. In the course of negotiating his investment in the AAF, Fowler falsely claimed personal ownership of GTS funds that in fact belonged to clients of Fowler's illegal money transmission service established in support of the Crypto Companies. As he did when opening bank accounts, Fowler told AAF executives that the funds in the GTS bank accounts derived from real estate investments as well as government contracts and that the tens of millions of dollars in the GTS accounts were liquid assets he could use to invest in the AAF. Fowler did not disclose his involvement with the Crypto Companies. Moreover, although Fowler experienced account closures and government seizure of GTS funds in the month leading up to his investment in the AAF, Fowler did not disclose those facts to the AAF. Fowler acquired a significant investment stake in the AAF in November 2018, yet was unable to fund that investment. Fowler, of Chandler, Arizona, pled guilty today to one count of bank fraud, one count of conspiracy to commit bank fraud, one count of operating an unlicensed money transmitting business, one count of conspiracy to operate an unlicensed money transmitting business, and one count of wire fraud. These offenses carry a total maximum sentence of 90 years in prison. The maximum potential sentence in this case is prescribed by Congress and is provided here for informational purposes only, as FOWLER's sentence will be determined by the judge. Fowler is scheduled to be sentenced by U.S. District Judge Andrew Carter at 2:00pm on August 30, 2022. Mr. Williams praised the outstanding investigative work of Special Agents from Federal Bureau of Investigation's New York Money Laundering Investigation Squad, and Special Agents from the Internal Revenue Service-Criminal Investigations. The prosecution of this case is being handled by the Office's Money Laundering and Transnational Criminal Enterprises Unit. Assistant United States Attorneys Jessica Fender, Jessica Greenwood, Samuel Raymond, Samuel Rothschild, and Sheb Swett are in charge of the prosecution.
