Reginald Fowler, an Arizona-based entrepreneur, has been indicted by a grand jury as a part of the criminal investigation surrounding the Bitfinex crypto exchange, together with Ravid Yosef.
These two people are accused of being a part of a grand scheme, which involved multiple bank accounts in order to move money into a series of unnamed cryptocurrency exchanges. Fowler was arrested on April 30, in Chandler, Arizona, the court filing shows.
He is known for holding a minority stake in the Minnesota Vikings, the US National Football League (NFL) team, after he had failed to come up with $600 million in cash to become the majority owner of the NFL team.
Fowler, in particular, is charged with bank fraud, conspiracy to commit bank fraud and and on account of operating an unlicensed money transmission business, whereas Yosef is charged with bank fraud and conspiracy to commit bank fraud. Activities of two companies, Global Trading Solutions LLC and Crypto Capital, directly involved in the alleged fraud scheme, are also under investigations. Bank accounts of both Fowler and of Global Trading Solutions, are seized.
In addition, the the US prosecutors are seeking his detention until trial amid fears he may flee the country if he is not held in custody, adding that he “has access to hundreds of millions of dollars in foreign bank accounts”.
“Defendant [Fowler] is facing four counts stemming from his alleged role in operating a shadow bank for cryptocurrency exchanges,” it is said in the filing. These four counts carry a maximum sentence of thirty years.
Fowler is accused of operating a shadow banking system, a term used to describe providers of services similar to traditional banks but outside of the regulated framework, targeting individuals and institutions who trade digital assets.
According to US prosecutors, Fowler “set up bank accounts in multiple countries, received and sent money on behalf of clients from around the world, and coordinated the scheme with co-conspirators located in Israel, Switzerland, and Canada”.
Last week, Newconomy reported that New York Attorney General Letitia James secured a court order against iFinex Inc., a company which operates cryptocurrency exchange BitFinex and issues Tether cryptocurrency, for failing to return $851 million to an unnamed client.
A couple of days later, Bitfinex users allegedly moved more than $165 million in less than 12 hours.