Arizona businessman Reginald Fowler, an alleged operator behind payment processor Crypto Capital, was charged with wire fraud, on top of existing charges of bank fraud, operation of an unlicensed money transmission business. He was accused of fraud relating to another sports league as he prepares to go on trial for allegedly running a shadow bank for cryptocurrency traders.
Reginald Fowler was charged in federal court in Manhattan with defrauding individuals associated with a professional sports league by using illegally obtained funds to try to buy an ownership stake.
It was filed that Fowler allegedly created a scheme to obtain money “by means of false and fraudulent pretences” and directed the funds to a professional sports league.
Fowler was originally arrested for allegedly operating unlicensed banking operation through Crypto Capital, a payment processor crypto exchange.
Fowler and an Israeli woman, Ravid Yosef, operated an unlicensed banking operation tied to virtual currency trading. According to prosecutors, Fowler and Yosef lied to banks to open accounts and funnel hundreds of millions of dollars through the U.S. financial system on behalf of cryptocurrency exchanges. QuadrigaCX and Bitfinex are two of the exchanges that apparently used Crypto Capital to process user funds.
In a tentative plea agreement, Fowler is said to have pleaded guilty to one charge of operating an unlicensed money transmitter, but did not agree to forfeiting $371 million he allegedly holds or held in bank accounts.
Crypto Capital’s name surfaced in April when a New York Attorney General accused the companies behind the cryptocurrency Tether and digital exchange Bitfinex of covering up the loss of about $850 million in client and corporate funds.
Those companies in turn said the money had been deposited with Crypto Capital, where it was seized by authorities in the U.S., Poland and Portugal.