Crypto Capital exec plans to enter open plea in ongoing fraud case

Reginald Fowler, who sits at the center of a banking fraud case brought by the US government, is seeking to forego his right to trial.

Fowler stands accused of engaging in “shadow banking” for cryptocurrency exchanges through his business Crypto Capital. The government alleges Fowler ran Crypto Capital with his partner Ravid Yosef as an unlicensed money transmitting business that misrepresented its crypto dealings to its banking clients. Additionally, “shadow banking” transactions like these can be a means of circumventing anti-money laundering rules.

Fowler is said to have opened accounts with banks under false pretenses to store funds for exchanges. Crypto Capital did business with major exchanges like Binance, Kraken and BitMEX. This came to a head when Fowler and Crypto Capital purportedly failed to return $850 million to Bitfinex.

Fowler initially pleaded not guilty to the charges of bank fraud, conspiracy to commit bank fraud, operating an unlicensed money transmission business and conspiracy to operate an unlicensed money transmission business. The US Attorney’s office then dropped all counts except “operation of an unlicensed money transmittal business.”

In January 2020, it seemed Fowler was gearing up for a change of plea to guilty. After a change in counsel in 2021, he has now filed for another plea change hearing.

This time the intention is to enter an open plea, according to a letter from his counsel, Edward Sapone. This foregoes his right to trial and asks the court for sentencing, as opposed to a plea bargain when both sides come to an agreement over the terms of the plea. The letter is dated April 21.

Sapone requested the change of plea hearing to be scheduled for April 25th. He requested it take place remotely given the recent rise in COVID-19 cases in New York City and Fowler’s primary residence of Arizona. 

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