After a guilty plea, Reggie Fowler faces up to 90 years in prison 

It was an unhappy day for Reginald Fowler, the man I’ve been following since his indictment on April 30, 2019. 

The ex-NFL co-owner went before a Manhattan judge today in a Zoom call from his home in Chandler, Arizona, to plead guilty to five counts: bank fraud, conspiracy to commit bank fraud, operating a money transmitter business, conspiracy to operate a money transmitter business, and wire fraud. 

In 2018, Fowler found himself in a new career. He was moving money for crypto exchanges on behalf of Crypto Capital, a Panamanian shadow bank. At the time, traditional banks wanted little to do with crypto exchanges due to the money laundering risks they posed. 

The fifth count, added later in a superseding indictment, involved Fowler defrauding a new football league called the Alliance of American Football by giving them $25 million that belonged not to him, but to the customers of the cryptocurrency exchanges he was holding money for.

Fowler was 23 minutes late for the hearing. He had a terrible time calling in. When he finally did log into the call, he had himself inadvertently muted. His lawyer Ed Sapone kept making excuses while federal prosecutors waited. 

Once Fowler was audible, Judge Andrew Carter read through the charges, making sure that he understood each and every one of them. And then finally: “How do you plead?” 

“Guilty your honor.”

The judge then proceeded to run through the statutory penalties: a combined 40 years for counts one and two, a combined 10 years for counts three and four, and 30 years for count five. 

Fowler, who is 63 years old, also faces a government forfeiture. Over a period of 10 months in 2018, he processed $750 million in crypto transactions in various currencies, nearly $600 million in US dollars, according to a DoJ press release.  

Fowler’s voice sounded muffled. At times he stuttered. He read from a prepared script at the end, trying to tell the judge and prosecutors his version of events, though he was almost impossible to hear and the court reporter kept asking him to repeat himself. 

“This has been a long and difficult road. I wanted to accept responsibility in the right way,” he said. “I am deeply sorry, and I plan to make full amends.” 

Fowler said he knew nothing about cryptocurrency when he opened the bank accounts under false pretenses, telling the banks that the accounts were for his real estate business. 

“I did not know they were dealing with digital assets,” he said, speaking of Crypto Capital. “My understanding was that all the money was lawfully clean money.”  

It is hard to understand what Fowler was going for. Perhaps hoping for leniency from the judge? If he had accepted a plea deal offered to him in January 2020, he would have faced a much lighter sentence, perhaps only five years. Instead, he bulked in front of the judge. Soon after, he lost his initial legal team, after neglecting to pay them.

Even if Fowler had gone to trial, it would have been up to the US government to find him guilty of all charges. He may have stood a better chance. But also, he would have had to endure press coverage, and the media picking apart his every word. 

His trial, originally scheduled for February, was set for May 16. Last week, his lawyer wrote to the judge and said that Fowler wanted to change his plea to guilty. 

Fowler’s sentencing is scheduled for August 30 at 2 PM EST. 

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Reggie Fowler, Bitfinex/Tether’s alleged US money man, to plead guilty

In another last-minute twist, Reggie Fowler, the man at the center of hundreds of millions of dollars in missing Bitfinex-Tether money, is going to forgo a trial and enter an open plea to charges next week. His trial was scheduled to begin in May.

Fowler is charged with bank fraud, money laundering, and running an unlicensed money transmitting business. An open plea leaves the defendant’s sentence in the hands of the court, with no agreement from the prosecutor.

Fowler’s lawyer, Edward Sapone, filed a letter with a Manhattan court on April 21, asking Judge Andrew Carter to schedule a Rule 11 change of plea hearing. Fowler, who lives in Arizona, is hoping for a virtual hearing due to COVID, so he won’t have to get on a plane.  

The former football player allegedly ran a shadow banking service for Crypto Capital, a payment processor that crypto exchange Bitfinex was using to skirt the traditional banking system. Before his indictment on April 30, 2019, Fowler’s accounts were frozen by the Department of Justice.

This isn’t the first time Fowler has attempted to plead guilty. He came very close to a plea deal on January 17, 2020, but backed out in front of the judge at the very last moment.  

Had he accepted that deal, he would have likely spent five years in prison with three years of supervised release and paid a fine of up to $250,000.

But the deal, which required Fowler to forfeit $371 million held in some 50-odd bank accounts, fell apart at the last minute. Nobody was sure of the exact amount in the bank accounts and Fowler would have been on the hook for the difference.

On Feb. 20, 2020, the government followed up with a superseding indictment against Fowler, adding wire fraud to existing charges of bank fraud and illegal money transfer. 

According to federal prosecutors, from June 2018 to February 2019, Fowler obtained money through “false and fraudulent pretenses” to fund a professional sports league in connection with his ownership stake in the league. 

As it turned out, Fowler had invested $25 million in the Alliance of American Football — an attempt to form a new football league — shortly before his arrest in 2019.

Sapone has been Fowler’s lawyer since April 2021, when Fowler’s prior defense team withdrew from the case due to nonpayment. Fowler owed them $600,000.

Going to trial is a huge cost, which is why Fowler’s previous legal team stepped down when they did. They did not want to do all that work and risk not getting paid — for any of it. 

Sapone is stuck with the case. He cannot step down, as Judge Carter gave him fair warning when he took Fowler on as a client: “You are going into this with your eyes wide open.”

However, I do wonder if part of the reason Fowler is seeking an open plea has something to do with money. You would have to be a fool of a lawyer not to get paid upfront.

I have also heard that Fowler is strongly averse to media coverage, and journalists would have been all over the trial. He wouldn’t have liked that.

If you are just getting up to speed on all of this, the New York Attorney General charged Bitfinex and Tether with fraud in April 2019, claiming that Bitfinex covered up the fact that it had lost access to $850 million put in the trust of Crypto Capital, without so much as even a written contract.

The companies had to pay an $18.5 million fine as a result. They also can no longer operate in the state of New York, and Tether has to release public attestations on a regular basis. 

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