The United States Department of Justice (DoJ) said in an April 20 press release that it charged Reginald Fowler, a man residing in Arizona, and Ravid Yosef, an Israeli woman for providing shadow banking services to several cryptocurrency exchanges.
While authorities now have Fowler under arrest and scheduled court trial, Ravid Yosef is still at large according to the release.
Nature of the Alleged Crime
The U.S government claims that Reginald Fowler and Ravid Yosef conspired with and maintained bank accounts on behalf of some unnamed cryptocurrency exchanges both in the U.S and abroad.
To execute their scheme, the individuals misrepresented information regarding the nature of the business done by the cryptocurrency exchanges, even in one strange case stating that the bank account would be used to “process real estate investments.”
The accused individuals also used the allegedly false information on wire transfer transactions processing ‘hundreds of millions of dollars on behalf of numerous cryptocurrency exchanges.’
In another case of such shadow banking, the DoJ identified that the alleged individual held bank accounts with HSBC Bank USA and HSBC Securities USA/Pershing LLC under the name, Global Trading Solutions LLC. The said scheme lasted purportedly lasted between February and August 2018.
Even though the court documents did not directly mention under fire cryptocurrency exchange, Bitfinex, it noted that one of the exchanges that the alleged shadow bankers worked with “markets itself as a company that allows clients to deposit and withdraw government-backed, or “fiat,” currency to numerous crypto exchanges”.
Fowler and Yosef are each charged with a count of bank fraud and conspiracy to commit bank fraud, each of which carries a maximum sentence of 30 years in prison.
Fowler is also charged with one count of operating an unlicensed money transmitting business and one count of conspiracy to do the same, each of which carries a maximum sentence of five years in prison.
Despite the possible sentences announced, the release notes that the Judge will determine any sentencing of the defendants.
In a similar development, Stmarket.co reported that the U.S government indicted two Nigerians for organizing a fraudulent scheme that amassed up to 50BTC.