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Thanks to the combined efforts of special agents from the New York Office of the Internal Revenue Service, Criminal Investigation Division (IRS-CI) and the FBI New York Money Laundering Investigations Squad, a banking fraud was uncovered recently and the managers charged for bank fraud.
The illegal money transmitting scheme was reportedly being spearheaded by a 60-year-old man from Arizona, called Reginald Fowler. The official press release has it that Fowler worked hand in hand with a co-conspirator who happens to be a 36 years old woman from Tel Aviv in Israel known by the name Ravid Yosef.
According to the press release, Fowler and Yosef started an illegal banking scheme for crypto exchanges in 2018. They doctored several documents to convince the exchanges that they are legit, and after successfully persuading them, the supposed managers acted as a channel between the exchange and a bank which held fiat currencies. They pretended to be operating a bank, when in fact, they operate only one account in a ‘true’ bank which they also deceived by falsifying documents.
Basically, Fowler and Yosef got funds from tons of cryptocurrency exchanges across the globe and kept them in a private account with a bank while deceiving the crypto exchanges that they own and run a bank.
From the report, it is noted that hundreds of millions of dollars were paid into the shadow bank and hundreds of millions of dollars were also paid out from the shadow bank. Should an exchange need the cash, Fowler and Yosef would act as an intermediary, without the knowledge of the exchange so the actual bank can approve the withdrawal of such fund.
This is indeed a crime against the federal law. Every money transmitter businesses must be registered and must operate in accordance with the anti-money laundering safeguards of the United States. These laws ensure that the U.S. financial system is not used for criminal purposes. The investigation showed that the supposed bank operated by Fowler and Yosef actually skirted these laws through lies and deceit.
Therefore, they are both charged for bank fraud and conspiracy to commit bank fraud. Each of these charges carries a maximum sentence of 30 years in prison. In addition, Fowler, the alleged brain behind the scheme, is charged for operating an unlicensed money transmitting business and conspiracy to do the same. Each of these charges carry up to 5 years in prison.
However, these are just factual numbers, the judge is in the best position to dish out the sentence. At the time of compiling this article, the Israeli woman is still at large; however, Fowler has been arraigned in federal court in Phoenix Arizona on 30th of April.