Tag: Andrew Carter

Reggie Fowler, Bitfinex/Tether’s US money man, seeks 6-month sentencing delay

After a series of delays that have plagued his case since he was first indicted in April 2019, Reggie Fowler was supposed to be sentenced on Sept. 13. (His sentencing was originally scheduled for Aug. 30.)

This Tuesday, a Manhattan District Judge was to decide how many years the 63-year-old Fowler, who is charged with bank fraud, money laundering, and running an unlicensed money transmitting business, would spend behind bars. Likely, the rest of his life, given bank fraud alone carries a max imprisonment of 30 years. This would have meant that Fowler was enjoying his last weekend as a free man.

But on a Saturday night — three days before sentencing — Fowler’s lawyer Ed Sapone wrote to Judge Andrew Carter asking for a six-month adjournment. Sapone said that he (not his client) has been ill and still needs time to gather material relevant to the sentencing: [letter]

“I recognize that this is an unusually lengthy adjournment request. I have been suffering with a serious medical condition that is requiring invasive medical treatments. In addition, a significant amount of information and material relevant to an analysis under 18 U.S.C. §3553(a) must be obtained from financial institutions, entities, and individuals located in Europe. The requested adjournment will afford me the opportunity to gather the relevant material and prepare a sentencing submission for the Court’s consideration, while addressing my medical condition.” 

Sapone said that US prosecutors were okay with the request. 

Fowler is the ex-football guy and Arizona businessman tied to hundreds of millions of dollars of missing Tether and Bitfinex money. He is accused of setting up a network of shadow banks so crypto exchanges could skirt the traditional banking system. Fowler told the banks that the accounts were for his real estate business. He is also accused of funding a sports league with money that wasn’t his.

After fudging a plea deal that likely would have meant only spending five years in custody, Fowler was supposed to head to trial in May 2022. But in another surprising last-minute twist, he decided to enter a guilty plea and throw himself at the mercy of the court.  

My only guess as to why he did this is that trials are incredibly expensive and by this time, Fowler was down to one lawyer: Sapone. His previous legal team ditched him in 2021, saying their client owed them $600,000 and had been stringing them along for months with promises of “the check’s in the mail.”

I’ll be curious to hear what Judge Carter says, but given the government has no objection to Sapone’s request for adjournment, I suspect he will say, “sure whatever.” Fowler is currently living in Chandler, Arizona, free on bail. 

Update: Judge Andrew Carter has approved the motion. Reggie Fowler’s sentencing hearing has been adjourned until March 14, 2023, at 12 p.m. ET. [Order]

Posted on by Amy Castor 0

Judge gives Reggie Fowler 45 days to find new defense counsel

A New York district judge agreed to allow Reginald Fowler’s defense team to withdraw from their client’s case due to nonpayment. He then gave Fowler 45 days to seek a new attorney. 

(Update on Feb. 9: The judge has given Fowler three more weeks. Fowler now has until Feb. 25 to retain new counsel, according to the latest court filing.)

Judge Andrew L. Carter

Fowler is the former NFL minority owner linked to hundreds of millions of dollars in missing Tether and Bitfinex funds. Tether is the company that has so far issued $20 billion worth of stablecoins, and Bitfinex is a crypto exchange. Both companies are operated by the same individuals.

In a telephone status conference today, Judge Andrew L. Carter agreed to allow Fowler’s defense counsel—Hogan Lovells and Rosenblum Schwartz & Fry—to step down. They claim their client owes them more than $600,000.

However, while the government agreed to letting the lawyers withdraw, it was opposed to an adjournment of the April 28 trial, arguing that the situation was of Fowler’s own making. After all, his lawyers had been warning him since February they were planning to quit. The trial has already been postponed twice.

“We believe the almost four months until trial is sufficient time for a new counsel to prepare for trial,” U.S. Assistant Attorney Jessica Greenwood told the judge.

Judge Carter disagreed. That assumes Fowler’s new attorneys have already been retained and are on the case today, he said, stressing that it may take time for Fowler to find a new lawyer—especially given that his current lawyers are seeking to withdraw because he hasn’t paid them.

“That usually doesn’t make the defendant a very attractive client to a subsequent law firm,” Carter said.

The judge then explained to Fowler—who was on the call, joined by his defense team—that if he was unable to afford a new attorney, the court would provide him one free of charge. However, he would need to fill out a financial affidavit for the court to make that determination.

Although Fowler would not admit to whether he could afford an attorney, he did say he wished to try and hire one who would be more willing to work with him given his “current condition.” 

“The government has seized all my assets,” he said, starting to sound a bit angry. “The government has asked me to put the properties that I have that are free and clear up for bail. The government has handcuffed me. They have shut me down. They have locked down my family,” he said—though it’s not clear what he meant in saying his family was “locked down.”

“I can’t even get a bank account. My business has been shut down since COVID, so we don’t have any income. We do have assets. We can’t get to the assets because the government has tied them all up, so what I want to do, respectfully, is to try to find a firm that will work with me, understanding that we have assets that are tied up by the government, i.e., the properties that have me set for bail, or whatever you call it.”

Fowler, now living in Chandler, Arizona, is free on $5 million bail. Five properties were put up for lien in order to secure his bond.

He called it “ludicrous” that the government forced him to put up “nearly $2 million worth of nearly free-and-clear properties” for bond. (A quick look on Zillow puts the properties’ value at around $1.4 million.)

Fowler said if he could not find an attorney to work with him, he would ask the court for assistance.

The judge stressed that Fowler has a right to be represented by an attorney, and gave him until Feb. 2, 2021, to find one on his own. A new trial date will be set after that time, the judge said.

Hogan Lovells also represents Fowler in a class-action complaint against Tether and Bitfinex, in which Fowler is named. They are seeking to withdraw from that case as well.

Related stories:
Reggie Fowler owes lawyers $600,000
Reggie Fowler, man linked to missing Bitfinex funds, hoodwinks his own defense team
Confirmed: Reggie Fowler can’t pay his lawyers

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Posted on by Amy Castor 0

Reggie Fowler hoodwinks his own defense team

Reginald Fowler, the Arizona businessman tied to hundreds of millions of dollars of Tether and Bitfinex’s missing money, appears to have conned his own defense team. 

As I explained in a previous post, Fowler’s lawyers are seeking to withdraw from his case due to nonpayment. (The US government is accusing Fowler of operating a shadow banking operation for cryptocurrency exchanges.) But the details are privileged and confidential, so the judge overseeing the case agreed to allow them to file an ex parte sealed letter.

Judge Andrew Carter has now received the letter—from Hogan Lovells on behalf of itself and Rosenblum Schwartz—reviewed it, and filed a response. As I had suspected, Fowler appears to have hoodwinked his own defense team. Here is the judge’s eight-page opinion and order.

“Money isn’t everything,” the SDNY district judge writes. “But in this case, it is the only thing.” [Emphasis mine.]

According to Carter, Fowler’s jilted defense team recounted several conversations with their client in which Fowler promises to pay, but does not, effectively stringing them along.

“Mr. Fowler assured his attorneys he could pay, referring to planned business transactions, real property and bank accounts,” the judge said.

The defense counsel apparently understood that many of Fowler’s assets were frozen, but the hope was that Fowler could unfreeze certain assets by demonstrating that the assets had no connection to case.

However, during the time Fowler’s lawyers had been pressing him for payment and Fowler telling them he did not have the available funds, the lawyers learned that Fowler had plenty to pay his other lawyers—a large international law firm (name withheld) and an unnamed lawyer.

I’m not sure what exactly this means (a tip-off that Fowler had funds hidden away somewhere?) but Carter said: “The anonymous lawyer gave defense lawyer advice regarding Fowler’s ability to pay legal fees from funds that might not be related to criminal activity.”

So why did Fowler’s lawyers wait this long before asking the court if they could dump their client when the troubles with getting paid started back in February?

According to Carter’s retelling, they thought the case would have been resolved with a guilty plea in January. However, the plea bargain blew up when Fowler learned it would require him to forfeit $371 million.

Recall that after that, federal prosecutors responded with a superseding indictment that added a fifth charge, which would have required a lot of additional (unpaid) work from the defense team.

Fowler’s defense team “decided they would continue representing him even though they had been owed a great deal of money for several months,” Carter said. “But largess shrinks when confronted by the prospect of additional, unpaid hours dedicated to trial preparation.”

What next?

There is still the issue of whether Fowler’s defense team should be allowed to withdraw from the case. But federal prosecutors needs to know more about their reasons for seeking withdrawal, so they can respond.

Some information in Hogan Lovells’ sealed ex parte needs to be made public and some needs to remain sealed, Carter said. Certain information about Fowler’s assets should remain sealed. Any information about plea negotiations needs to remain sealed as well.

However, details about the amount and timing of Fowler’s payments to the defense counsel is “highly relevant and should be made public.”

The name of the large international law firm should also be made public, Carter said, stating that “the size and nature of the firm is relevant to the fact that Mr. Fowler paid something to that firm—but did not fully pay Hogan and Rosenblum—and whether Hogan’s and Rosenblum’s acceptance of relatively low retainers was reasonable.”

Low retainers? This may be a sticky point, and something federal prosecutors make a big issue with in their next response.

The judge ordered Fowler’s defense team to file three versions of their letter—a public version redacting what should not be revealed to the government or the public; a sealed version, redacting what must not be disclosed to the government; and a third ex parte sealed version with no redactions.

All filings need to be completed by Dec. 1; the government has until Dec. 8 to respond. Replies are due by Dec. 11.

Nov. 24: Updated to clarify a few details, like what Fowler is being accused of and to emphasize that the retainer issue will likely come up again in the government’s response.

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Posted on by Amy Castor 0

Confirmed: Reggie Fowler can’t pay his lawyers

Reginald Fowler’s lawyers confirmed that money is indeed at the center of a conflict between them and their client — and the main reason why they want to withdraw from the case. 

The news was revealed Friday in a telephone status call attended by Assistant US Attorneys Jessica Greenwood, Sheb Swett and Sam Rothschild; Fowler’s defense team, James McGovern, Michael Hefter, and Sam Rackear of Hogan Lovells, and Scott Rosenblum of Rosenblum Schwartz & Fry; and Fowler himself.

Fowler, a former NFL investor — who resides in Chandler, Arizona, and is free on bail — is accused of setting up a shadow banking service that has been linked to Crypto Capital, a Panamanian firm at the center of the New York Attorney General’s investigation into crypto firms Bitfinex and Tether.

As I wrote earlier, Fowler’s defense counsel have been careful about disclosing details on why they want to ditch their client, who they have been working with since Fowler was indicted in April 2019.

District Judge Andrew Carter began the call: “Defense, can you give me a little further elucidation regarding the grounds for your seeking to be relieved without getting into any privileged or confidential materials?”

Fowler’s attorney McGovern said the matter involved privileged and confidential information but added: “I think it is fair to say that it is of the nature that the government assumes in their filing, of a fee-based nature.” 

Judge Carter cut straight to the heart of the matter: “So it is fair to say, without getting into the details, this is about lawyers not getting paid?”

“Yes,” McGovern answered, but added it was “a little bit more than that.” He then suggested that his team file an ex-parte submission setting out the nature and specifics of the request to withdraw. “That way, we’ll provide the court with a substantial amount of information that will provide color for the entire discussion,” he said. 

Fowler is represented by two legal firms. Carter asked if the nature of the conflict was the same for both firms. “Yes,” responded Rosenblum, Fowler’s attorney at the second law firm.

Federal prosecutors have argued that Fowler’s defense can’t simply withdraw from the case without giving some type of explanation.

US Assistant Attorney Greenwood reiterated that argument, telling the judge that “there are significant portions of a fee arrangement that are not potentially privileged.” She suggested Fowler’s attorneys provide details in an ex-parte and then allow the government to access the non-privileged portions “so we can appropriately respond to the motion to withdraw.”  

Judge Carter agreed to allow Fowler’s defense team to file a submission under seal. “Once I receive those materials,” he said, “I will make a determination as to whether or not the document will remain under seal or whether or not there are portions that can, in fact, and should, in fact, be redacted and other portions that should be made public.”

The defense counsel said they would submit the document on Nov. 18.

So where is Fowler’s money?

Fowler has been having money problems for a while—problems that extend back to when the US Department of Justice froze his bank accounts in late 2018, leading to the collapse of the Alliance of American Football, a new football league that he cofounded and was a major investor in.

From there, things seem to have gotten worse.

Recall that in January 2020, Fowler rejected a plea deal that would have required him to forfeit $371 million. It was the forfeiture requirements that blew up the deal. Prosecutors hit back with a superseding indictment that added a new count: wire fraud.

On October 15, Law360, reported that Fowler’s legal team might be open to exploring for a second time potential options to resolve the charges, even though the new wire fraud charge complicated things.

And then, on October 23, Fowler’s defense team went to the court seeking to modify conditions of his bond so that he could pay for his defense. (Here is the original May 2019 bond conditions; here is their request for a change.)

Specifically, they wanted to change the bond conditions to enable Fowler to take credit out on properties he had acquired prior to February 2018 “when the alleged conspiracy began” without approval from pretrial services. And to remove the five properties posted as security for the $5 million bond.

Those properties, based on a rough estimate of looking at them on Zillow, are probably only worth around $1.5 million total.

Whatever happened after that — it clearly wasn’t enough to satisfy his attorneys.

Updated Nov. 14 to add the bit about Fowler’s accounts getting frozen in 2018 and the AAF.

Posted on by Amy Castor 1