Damian Williams, the United States Attorney for the Southern District of New York, announced today that REGINALD FOWLER has been sentenced to 75 months in prison for arranging more than $700 million in unregulated transactions on behalf of cryptocurrency exchanges, in violation of with federal anti-money laundering laws, lying to U.S. banks to do so, and defrauding the Alliance of American Football (“AAF”), a short-lived professional football league, in connection with its acquisition of a significant ownership interest in the league.
US Attorney Damian Williams said: “Reginald Fowler circumvented federal law by processing hundreds of millions of dollars in unregulated transactions on behalf of cryptocurrency exchanges as a shadow bank. He did this by lying to legitimate US financial institutions, which exposed the US financial system to serious risks. He then victimized a professional football league by lying about his net worth in exchange for a significant portion of the league. Let’s be clear: this Bureau is committed to prosecuting people who lie to banks and circumvent the law as a means of doing business.”
According to court documents and statements during court proceedings:
In or about February 2018, REGINALD FOWLER founded Global Trading Solutions LLC (“GTS”) and began working with Crypto Capital and other related companies (the “Crypto Companies”), which were controlled by Israeli citizens. The Crypto companies marketed themselves as a seamless way for individuals to exchange standard currency for cryptocurrency. A number of cryptocurrency exchanges started using the Crypto companies to process their fiat-to-cryptocurrency transactions.
In reality, because banks were reluctant to handle cryptocurrency transactions, the crypto companies had no access to legitimate financial institutions. Instead, the Crypto companies lied to banks to open accounts that were used to process cryptocurrency transactions without the banks’ knowledge. FOWLER opened dozens of such accounts in the United States and around the world. He did not disclose GTS’s involvement with the Crypto Companies and the fact that it operated as a payment processor for hundreds of millions of dollars worth of cryptocurrency transactions. FOWLER also directed other individuals to include false information in wire transfer instructions to further mislead banks about the nature of GTS’s business. In less than 10 months, FOWLER processed approximately $750 million worth of cryptocurrency transactions in various currencies. At no time have FOWLER, GTS or any of the Crypto companies ever been licensed as a money transfer company in the United States as required by federal law.
In addition, in 2018, FOWLER defrauded the AAF in connection with its acquisition of a significant ownership stake in the league. While negotiating its investment in the AAF, FOWLER falsely claimed personal ownership of GTS funds that actually belonged to clients of FOWLER’s illicit money transmission service established in support of the Crypto companies. As he did when opening bank accounts, FOWLER lied to AAF executives, telling them that the money in the GTS bank accounts came from real estate investments and government contracts and that the tens of millions of dollars in the GTS accounts were liquid assets that he could use to invest in the AAF. FOWLER has not disclosed his involvement with the Crypto Companies. In addition, although FOWLER experienced account closures and seizures of GTS funds by the government in the month prior to its investment in the AAF, FOWLER did not disclose these facts to the AAF. FOWLER acquired a significant investment interest in the AAF in November 2018, but was unable to fund that investment. Based in part on FOWLER’s lies, the AAF declared bankruptcy circa April 2019, ending the season and destroying the hopes of FOWLER’s victims.
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In addition to the jail term, FOWLER, 64, of Chandler, Arizona, was ordered to pay $740,249,140.52 forfeiture and $53,189,261.80 restitution to the AAF.
Mr. Williams praised the outstanding investigative work of the special agents of the New York Money Laundering Investigation Squad of the Federal Bureau of Investigation and the special agents of the Internal Revenue Service-Criminal Investigations.
The prosecution of this case is overseen by the Bureau’s Money Laundering and Transnational Criminal Enterprises Unit. U.S. assistant attorneys Jessica Greenwood, Samuel Raymond, Samuel Rothschild and Sheb Swett are leading the case.
 As far as FOWLER’s co-defendants are concerned, the full text of the indictments and the descriptions in the indictments below constitute mere allegations, and any fact described should be treated as an accusation.