Reginald Fowler, a 64-year-old entrepreneur from Arizona and former co-owner of the professional American football team Minnesota Vikings, has been sentenced to 75 months in prison. This comes after a joint investigation by the FBI’s Money Laundering Squad and Internal Revenue Service-Criminal Investigations. Fowler has also been ordered by the court to pay a forfeiture of $74.02 million and restitution of $5.31 million to the Association of American Football (AAF), a short-lived American football minor league. The prosecution was led by the United States Attorney’s Office’s Money Laundering and Transnational Criminal Enterprises Unit.
The investigation found that Fowler processed nearly $750 million of transactions for cryptocurrency exchanges, acting as a payment processor while his company Global Trading Solution did not have a license for money transmitting business as required by the US federal laws. During this time, he also lied to US banks. Fowler directed other individuals to include false information on wire transfer instructions to deceive banks about the nature of GTS’s business. In less than ten months, Fowler processed approximately $750 million in cryptocurrency transactions in various currencies.
In addition to this, Fowler was found guilty of defrauding the Association of American Football. He acquired a significant stake in the association by investing customers’ funds, claiming them to be his personal wealth. Fowler lied to AAF executives, telling them 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. Due in part to Fowler’s lies, the AAF declared bankruptcy in April 2019.
The increasing number of cryptocurrency-related crime and fraud cases has led the US Department of Justice (DoJ) to form the “National Cryptocurrency Enforcement Team” in September 2022. This team of 150 prosecutors is headed by cybersecurity prosecutor Eun Young Choi. In May, the DoJ charged a Russian man with being part of three ransomware gangs that netted nearly $200 million through various ransomware attacks targeting police departments, hospitals, and schools.
The sentencing of Fowler is a significant development in the fight against cryptocurrency fraud and money laundering. The case highlights the need for increased oversight and regulation of the cryptocurrency industry, particularly in the area of money transmitting business. The establishment of the National Cryptocurrency Enforcement Team is a step in the right direction, but more needs to be done to address the growing threat of cryptocurrency-related crime. The case also serves as a warning to those who might be tempted to engage in fraudulent activities using cryptocurrency. The consequences of such actions are severe and far-reaching, affecting not only the individuals involved but also the wider industry and the public at large.