Sam Bankman-Fried’s Lawyers Push for Maximum 78-Month Sentence, Say Recommended 100 Years Is ‘Grotesque’

February 29, 2024 The Daily Hodl

IRS tax bill will swipe creditors of any ‘meaningful recovery,’ says FTX

December 12, 2023 Coin Telegraph

CZ released on $175M bond, could return to Dubai

November 22, 2023 Coin Telegraph

Ex-NFL team owner Reggie Fowler gets 6 years for crypto ‘shadow banking’

June 6, 2023 Coin Telegraph

Bank Fraud

United States Attorney Damian Williams says the lies of the former Minnesota Vikings co-owner exposed the U.S. financial system to “serious risk.”

Reginald Fowler, a former NFL team owner, has been sentenced to six years of prison for operating as a “shadow bank” to the crypto sector, which involved over $700 million in unregulated transactions over a 10-month timespan in 2018.

The 63-year-old, who was a co-owner of the Minnesota Vikings, was sentenced to a total of 75 months on bank fraud and money laundering charges, according to a statement from the United States Attorney’s Office in New York on June 5.

Former co-owner of Minnesota Vikings sentenced to 75 months in prison for providing shadow banking services to cryptocurrency exchangeshttps://t.co/Nc2PVhEajw
— US Attorney SDNY (@SDNYnews) June 5, 2023

It marks the end of a five-year long case that began when he was arrested in 2019 for alleged shadow banking. Shadow banking is a term used to describe (often illegal) bank-like activities that are carried out by non-bank entities.

Fowler initially pleaded not guilty to all charges in 2020, but changed his plea to guilty in April 2022.

In his latest statement, U.S. Attorney Damian Williams said that a string of lies enabled Fowler to mislead and deceive several banks:

“Reginald Fowler evaded federal law by processing hundreds of millions of dollars of unregulated transactions on behalf of cryptocurrency exchanges as a shadow bank. He did so by lying to legitimate U.S. financial institutions, which exposed the U.S. financial system to serious risk.”

Williams then said Fowler “victimized” the Alliance of American Football (AAF) — a former professional football league — by lying about his net worth in order to own a “substantial” stake in the league.

“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,” the federal prosecutor stressed.

According to Williams, Fowler managed to pull off his crimes by establishing Global Trading Solutions (GTS) around February 2018, which worked with Crypto Capital and other crypto firms operating out of Israel.

There, Fowler, GTS and the crypto firms sidestepped a license by lying to banks in order to open accounts that were used to process crypto transactions.

OK -now at crypto Fowler sentencing. It was set for 10: FOwler just came in at 10:19 am. Inner City Press is covering the case https://t.co/S97h82I3FP and will live tweet, thread below pic.twitter.com/HapbKHoHaz
— Inner City Press (@innercitypress) June 5, 2023

Fowler opened a dozen of these accounts to facilitate these crypto transactions without the banks’ knowledge and failed to disclose GTS’s relationship with the crypto firms, Williams said:

“At no point were FOWLER, GTS, nor any of the Crypto Companies ever licensed as a money transmitting business in the United States, as required by federal law.”

One of the crypto firms involved was iFinex Inc — the parent company of crypto exchange Bitfinex and stablecoin issuer Tether, it claimed.

Other convictions included bank fraud conspiracy, operation of an unlicensed money-transmitting business, conspiracy to operate an unlicensed money-transmitting business, and wire fraud.

In addition to the prison sentence, Fowler was ordered to forfeit $740 million and pay over $53 million in restitution to the AAF.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

Silk Road Hacker Sentenced to a Year in Prison for Wire Fraud

April 16, 2023 Bitcoin.com

US Government Plans to Sell Over 41,000 Bitcoins Confiscated from Silk Road Hacker

April 1, 2023 Bitcoin.com

AirBit Club execs face decades in prison after pleading guilty to $100M fraud

March 9, 2023 Coin Telegraph

AirBit Club

Co-founder Rodriguez and senior promoters Millan, Aguilar and Chairez all recently pled guilty to the charges, while the other founder, Dos Santos pled guilty in October, 2021.

Six people involved in a cryptocurrency “Ponzi scheme” that raked in about $100 million over five years have pled guilty to a series of fraud and money laundering charges, each carrying a maximum sentence of 20 to 30 years of prison.

One of the founders of “AirBit Club,” Pablo Renato Rodriguez, was the latest to plead guilty to wire fraud conspiracy charges on Mar. 8.

According to a Mar. 8 statement from the United States Department of Justice (DOJ), AirBit Club was a fake cryptocurrency mining and trading company operating between 2015 to 2020, where executives and promoters induced victim investors into believing that they’d make guaranteed passive income and profits on any membership purchased.

Operators and attorney of global multi-million-dollar cryptocurrency Ponzi scheme “AirBit Club” plead guiltyhttps://t.co/MT3mM9aqPV
— US Attorney SDNY (@SDNYnews) March 8, 2023

According to the DOJ, the perpetrators traveled throughout the United States, Latin America, Asia and Eastern Europe to market AirBit at “lavish expos” to convince investors to purchase AirBit Club memberships.

Victims saw “profits” accumulate on the AirBit Club online portal, but no actual mining or trading was ever carried out. One victim trying to withdraw was asked to “bring new blood” into the AirBit Club scheme in order to withdraw her funds.

U.S. Attorney Damian Williams said the operators used funds from victims to purchase luxurious cars, houses and jewerly. Some of the proceeds were used to finance more expos to recruit more victims too:

“The defendants took advantage of the growing hype around cryptocurrency to con unsuspecting victims around the world out of millions of dollars with false promises that their money was being invested in cryptocurrency trading and mining."

"Instead of doing any cryptocurrency trading or mining on behalf of investors, the defendants built a Ponzi scheme and took the victims’ money to line their own pockets," he added.

The representatives were first officially charged Aug. 18, 2020.

Since then, senior promoters Cecilia Millan, Jackie Aguilar and Karina Chairez each pled guilty to a series of wire fraud conspiracy, bank fraud conspiracy and money laundering conspiracy charges on Jan. 31, Feb. 8 and Feb. 22, while another founder, Gutenberg Dos Santos pled guilty to wire fraud and money laundering conspiracy charges on Oct. 21, 2021, according to the Mar. 8 statement.

These guilty pleas send a clear message that we are coming after all of those who seek to exploit cryptocurrency to commit fraud,” Williams added.

The operators have been ordered to forfeit their fraudulent proceeds of AirBit Club, which include fiat currency, real estate and Bitcoin (BTC), collectively valued at about $100 million.

Cointelegraph found there are still videos of the AirBit Club representatives marketing the membership scheme on YouTube.

The scheme often used the hashtag “#AirBitBillionaireClub” and shared several fake success stories of investors to try to lure in more victims.

California-licensed Attorney Scott Hughes, an attorney accused of laundering proceeds of the scheme, also pled guilty to money laundering charges on Mar. 2.

Rodriguez, Millan, Aguilar, Chairez and Hughes will be sentenced on different dates between June and August this year.

Magazine: ‘Account abstraction’ supercharges Ethereum wallets: Dummies guide