U.S. Attorney’s Filing to Arrest Man Behind Alleged Shadow Banking Case

By Tracy Hannes | May 7, 2019
U.S. Attorney’s Filing to Arrest Man Behind Alleged Shadow Banking Case

U.S. prosecutors have filed a memorandum to arrest Reginald Fowler for running an illegal money transmitting business, and may have transferred a staggering amount of money to crypto exchange Bitfinex’s funds.

The filing was made due to the prosecutors’ concern that Fowler may flee the country, citing his indifference for the FBI’s investigation in 2018.

According to U.S. Attorney Elizabeth Strange and assistant U.S. Attorney Gary Restino, the U.S. government has obtained a document named “Master US Workbook” that says the scheme has acquired over $740 million in 2018 and deposited the capital in 60 national and international banks, with roughly $50 million held in domestic banks.

As proposed last week by U.S. Attorney’s Office for the Southern District of New York, Fowler has committed bank fraud, suspected to operate an unlicensed money transmitting services with his Israeli associate Ravid Yosef.

The court filing seems to link the scheme to the approximately $850 million loss at Crypto Capital, a subsidiary of crypto exchange Bitfinex, saying “that companies associated with [the] defendant have failed to return $851 million to a client of defendant’s shadow bank.”

Besides, there is a conspiracy that Fowler has been producing counterfeit money, as roughly $14,000 faked bills were found at his office. Plus, the government fear that Fowler could possibly avoid the charges by dispersing his funds around the world.

Fowler was reportedly arrested and could face up to 30 years in prison for committing bank fraud, as per the filing.

Earlier in April, The Crypto Sight reported on Tether’s response to U.S. Attorney General’s Office, disproving claims that it backed crypto exchange Bitfinex to cover up the firm’s $850 million loss from investors and users’ withdrawal at Crypto Capital.

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