Reggie Fowler, the former co-owner of the NFL’s Minnesota Vikings, has been sentenced to over six years in prison for his involvement in a $750 million cryptocurrency scam. He reputedly opened multiple global bank accounts, claiming they were for real estate investments but using them for illicit crypto transactions.
Fowler, well known in the sports world for his role with the Minnesota Vikings, will be behind bars for 75 months thanks to his role in a $750 million cryptocurrency scam.
Fowler Admitted Guilt in April 2022
According to a USA Today story on Monday, the sentence could have been still more severe if not for a plea deal. Prosecutors for the Southern District of New York wanted Fowler behind bars on a number of grounds.
The federal prosecutors’ indictment lays out an array of charges. It says the businessman from Phoenix, Arizona, served as an unregulated crypto off-ramp. His illicit business, Global Trading Solutions LLC, worked with a company called Crypto Capital that allowed cryptocurrency exchanges to swap their digital currencies for cash.
Prosecutors accuse Fowler of fraudulently opening numerous bank accounts worldwide. They allege he claimed they were for real estate investments but used them for illicit cryptocurrency transactions. Lying about his deposits’ connection to an unregulated money transmission business could have exposed the banks to regulatory action.
Monday’s sentencing is the end result of a long legal battle. Fowler first admitted his guilt to five federal criminal charges in April 2022.
“In less than 10 months, Fowler processed approximately $750 million in cryptocurrency transactions in various currencies,” the indictment states. “At no point were Fowler, Global Trading Solutions, nor any of the Crypto Companies ever licensed as a money transmitting business in the United States, as required by federal law.”
On Monday, the office of the US Attorney for the Southern District of New York said in a statement, “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.”
Fowler Operated a Shadow Bank
Fiat off-ramps are incredibly important for crypto exchanges, which can deal with billions of dollars in transactions every day. They allow crypto exchanges to convert their digital assets into traditional fiat currencies.
In this case, the ex-Vikings owner was acting as a proxy for a crypto exchange. By operating as a shadow bank, he was able to dodge a host of regulatory and compliance barriers.
The importance of fiat off-ramps came into sharper view earlier this year during the spring banking crisis. When regulators closed Signature Bank in March, they severed a vital link for crypto firms to traditional finance. Only days earlier, other crypto-friendly banks, namely Silvergate Capital and Silicon Valley Bank, had also closed.
Many banks are reluctant to deal with the crypto sector because of their perceived volatility, risk, and links to crime.
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