Tag: Judge Andrew Carter

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 p.m. ET.

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Posted on by Amy Castor 0

Reggie Fowler, man at the center of Tether’s missing funds, ready for trial

It looks like Reginald Fowler, the man tied to hundreds of millions of dollars of missing Tether and Bitfinex money, has ditched plans for renegotiating a plea deal. Instead, he is planning to head to trial. 

In a letter filed with the New York Southern District Court on July 7 on behalf of both parties, the government stated: “The parties are not currently engaged in plea negotiations and do not anticipate resuming negotiations.”

Prosecutors are requesting a trial date in early February with pretrial motions beginning in October. The trial is expected to last two weeks. 

[Update Aug. 4: Fowler’s trial is set for Feb. 14, 2022. Here is the order.]

Fowler was indicted in April 2019, along with Israeli woman Ravid Yosef, who is still at large. The pair allegedly lied to banks, telling them they were in the real estate business so they could illegally open up accounts to store funds for cryptocurrency exchanges on behalf of Crypto Capital, a shadow banking operation. 

Fowler is currently represented by Ed Sapone of Sapone & Petrillo. He hired Sapone in April after his previous legal team withdrew from the case due to nonpayment. They claimed to be out over $600,000.

At the time, Judge Andrew Carter gave Sapone three months to get up to speed on the case and warned: “You are going into this with your eyes wide open.”

Preparing for trial means a lot more work for Sapone, so it is a surprise he wasn’t able to work out something with prosecutors. 

Fowler came very close to a plea deal on January 17, 2020. 

On that day, the former football player stood before the judge in a Manhattan courtroom ready to plead guilty to count four of his indictment — charges of operating an unlicensed money transmitter business — pursuant to negotiating with the government. 

Had he accepted the deal, Fowler 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. Why? Because nobody was sure of the exact amount in the bank accounts and Fowler would have been on the hook for the difference.

James McGovern, Fowler’s defense attorney at the time, told the judge:

“The issue with respect to the forfeiture that became an issue for us today stems from the fact that none of the parties seem to have an idea of how much money is at play here in the forfeiture order because these accounts that have all been frozen by one entity or another have an amount of money that nobody seems to know how much is in there. So our issue is how much actual exposure under the forfeiture order after the accounts are liquidated is Mr. Fowler looking at. That’s kind of the heart of the issue.”

On Feb. 20, 2020, the government filed a superseding indictment against Fowler, adding wire fraud to existing charges of bank fraud, illegal money transfer, and conspiracy. Wire fraud alone is punishable with up to 20 years in prison, so Fowler, 61, could be looking at spending the rest of his life behind bars.

There was speculation that Fowler’s defense team would try again to work out something with the government. He could still negotiate a deal, but by the tone of the prosecutor’s letter today, it sounds unlikely. 

Related stories:
Reginald Fowler, man tied to missing Bitfinex funds, out on $5M bail

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Posted on by Amy Castor 0

Reggie Fowler owes lawyers $600,000

Reggie Fowler, the former NFL minority owner linked to missing Tether and Bitfinex funds, owes his defense team more than $600,000, according to a new court filing on Tuesday. 

Fowler’s lawyers want to drop out of the case due to nonpayment, but they need to get permission from the court first. 

Last we left off, U.S. District Judge Andrew Carter ordered attorneys at law firm Hogan Lovells—also representing defense lawyer Scott Rosenblum at Rosenblum Schwartz & Fry—to file three versions of a sealed letter dated Nov. 18.

The public version—redacting what should not be revealed to the government or the public—discloses more details on the lawyers’ frustrations with a client who perpetually strings them along. 

Hogan Lovells attorneys James McGovern and Michael Hefter initially asked for a $25,000 retainer in late 2018 when they first met with their client. Fowler only ever paid the retainer, and two years later, he now owes them $600,000.

His defense team believed all the stories he told them that he was swimming in money, so they weren’t too concerned—at first.

“From the very inception of this matter, we have been led to believe that Mr. Fowler is a high net worth individual with substantial assets, which would allow him to pay his legal bills with little hardship,” the lawyers said in their letter to the judge.

Hogan Lovells started working with Fowler on October 18, 2018. They had their first meeting with him on Nov. 8, 2018, around the time Fowler was initially contacted by the FBI.

“When we agreed to represent Mr. Fowler, it was our understanding that he had been targeted by cryptocurrency businessmen seeking to take advantage of Mr. Fowler’s personal balance sheet as a means of transacting cryptocurrency transactions without drawing the attention of bank compliance officers or regulators,” they said.

Fowler was later arrested in Chandler, Arizona, on April 30, 2019. (DoJ press release and indictment.)

After his release in May on $5 million bail, Fowler hired Scott Rosenblum to join the defense team. Rosenblum asked for a $275,000 retainer and an additional $85,000 per week retainer, if the case went to trial. Rosenblum received a partial retainer of $100,000, which Hogan Lovells notes that Fowler paid “while he had several unpaid, overdue invoices for legal services issued by Hogan Lovells.” 

Additionally, Fowler paid another lawyer (unnamed) in Portugal in full for her services. He also paid international law firm Reed Smith LLP for services rendered in 2018.

“The fact that other attorneys had received payments from Mr. Fowler for their services led us reasonably to believe that Mr. Fowler’s representations to us that he would pay our bills was truthful,” the lawyers said.

In the second half of 2019, the lawyers were diligent about contacting Fowler for money. Each time they reached out, he told them payment was imminent and that “transactions or business deals that would fund the payment of our fees were in process”—but he never paid him. 

In February, following a plea bargain that went awry and a superseding indictment, the defense team realized the case would likely go to trial, requiring a substantial amount of work, and still no check from their client.

Fowler has ample funds, they said, including “$10 million in real estate that is unencumbered and could have been liquidated or monetized at any point during the past two years.” His refusal to pay, the lawyers added, has “led to a breakdown in the attorney-client relationship.”

The government has till Dec. 8 to respond and replies are due Dec. 11.

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Posted on by Amy Castor 0

Judge reschedules Reggie Fowler’s trial for next year

reggie-fowler-1Reginald Fowler stood before a New York judge Thursday and pleaded not guilty to wire fraud. The new charge brought the total counts against him to five. An irked-looking judge agreed to move the trial date, originally set for next month, to Jan. 11. (Court doc.)

The wire fraud charge was added in a superseding indictment on Feb. 21. The Arizona businessman and ex-NFL owner had already pleaded not guilty to the four prior counts, which had to do with bank fraud and illegal money transmitting. He was looking at a trial date of April 28.

However, with the new charge piled on, Fowler’s lawyer James McGovern wanted more time to prepare. Matthew Lee of Inner City Press, live-tweeted Fowler’s arraignment in court today.  

“The trial is scheduled. Mr. Fowler did not plead guilty. Now he wants an adjournment of the trial,” said U.S. Attorney Jessica Fender, according to Lee’s account. 

Judge Carter granted the adjournment and offered Oct. 28 as a new date for the trial. But Fender turned it down saying her colleague was unavailable at that time.

“Really? A prosecutor not being available is not grounds under the Speedy Trial Act,” said Judge Carter.

Finally, a new date of early next year was settled upon — and the judge appeared irritated with the government, Lee told me.

The law moves slow

Nothing is happening fast in this case. But the right to a speedy trial isn’t for the benefit of the public — it’s for the benefit of the defendant, who can waive it. And since Fowler is free on $5 million bail while he awaits trial, he can afford to do that. After all, he could find himself behind bars for many years after the trial.

Fowler was originally indicted on April 30, 2019, along with Israeli woman Ravid Yosef, who remains at large. The pair allegedly ran a shadow banking service on behalf of Crypto Capital Corp, a Panamanian payment processor that counted Bitfinex and the failed QuadrigaCX cryptocurrency exchanges as customers.

A plea deal would have seen three out of four charges against Fowler dropped. The deal was conditioned upon him forfeiting $371 million* allegedly tied up in some 50 bank accounts, but he wouldn’t—or couldn’t—agree to that.

After Fowler turned down the plea deal, federal prosecutors heaped on the newest charge of wire fraud. The fifth count was no surprise. In a court transcript filed in October 2019, Assistant U.S. Attorney Sebastian Swett told Judge Carter:

“We have told defense counsel that, notwithstanding the plea negotiations, we are still investigating this matter, and, should we not reach a resolution, we will likely supersede with additional charges.”

Fowler, who resides in Chandler, Ariz., will likely go about his daily life until next year when his trial begins. Is he rattled by any of this? Who knows. This is a man who has plenty of experience dealing with lawyers and judges. In 2005, ESPN reported that he had been sued 36 times.

Updated (3/7/20) to add names of attorneys.

*Updated (3/5/20 at 11:30 p.m ET) to note that Fowler’s proposed plea deal was based on him forfeiting $371 million, not $371,000 as previously stated.

Posted on by Amy Castor 0