New York District Attorney Charges Two for Shadow Banking Crypto Companies

The Southern District of New York Attorney has charged an Arizona man and Israeli woman for allegedly shadow banking cryptocurrency companies, according to an official announcement published on April 30.

Geoffrey S. Berman, the United States Attorney for the Southern District of New York, announced the arrest of Reginald Fowler for allegedly operating an unlicensed money transferring business and bank fraud. His purported co-conspirator Ravid Yosef has also been charged with bank fraud and is still at large, according to the announcement.

In 2018, the accused allegedly worked for several associated companies that provided fiat currency banking services to cryptocurrency exchanges, where Fowler made numerous misleading statements to banks in a bid to open bank accounts further used to receive deposits from individuals purchasing digital currency. Fowler and Yosef purportedly falsified electronic wire payment instructions to cover up the true nature of their business.

Berman said that “their organization allegedly skirted the anti-money laundering safeguards required of licensed institutions that ensure the U.S. financial system is not used for criminal purposes, and did so through lies and deceit.”

Earlier in April, the Manhattan district attorney Cyrus R. Vance, Jr. indicted a group of individuals with allegedly operated stores on the dark web that sold and shipped “hundreds of thousands” of tablets of counterfeit drugs and laundered millions of dollars with bitcoin (BTC). The individuals reportedly withdrew more than $1 million.Also in April, Cointelegraph reported that LocalBitcoins trader Jacob Burrell Campos, who sold bitcoin to more than 1,000 people in the U.S., will serve two years in federal jail. Burrell, a Mexican citizen, amassed more than $820,000 from bitcoin sales on the P2P platform between 2015 and 2018.