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For SDNY Crypto Currency Trial Fowler Wants Assets Unfrozen To Pay For His Defense

By Matthew Russell Lee, Patreon here Thread

SDNY COURTHOUSE, Oct 23 – Arizona based crypto-currency maven Reginald Fowler, with multiple accounts with the HSBC, appeared ready to plead guilty on January 15 to a single count, "operation of an unlicensed money transmittal business."

  After that fell through on financial issues, Fowler was hit with a five count Superseding Indictment, adding as a fifth count the catch-all, Wire Fraud. On March 5, U.S. District Court for the Southern District of New York Judge Andrew L. Carter emphasized this fifth count to Fowler, and accepted it as a basis to adjourn the trial.

  Judge Carter proposed October 28 and Fowler's lawyers agreed. But the Assistant US Attorney said the lead counsel on the case has a trial near that time before Judge Denise Cote. She proposed August. Judge Carter said it is hard to get jurors in August "for a trial not as straight forward as a CBS Fall drama." Inner City Press was there; live tweeted thread here.

  Finally the parties agreed to start the trial on Monday January 11, 2021. Afterward Inner City Press waited by the elevators and, to see if Fowler was able to talk about Bitfinex, asking for his views of the XFL. He smiled, but on the advice of counsel... In the proceeding reference was made to defrauding the now defunct American Alliance of Football. Inner City Press asked, Will the XFL fare better? No.

 On October 15, Judge Carter held another proceeding and Inner City Press live tweeted it here and below.

 Now on October 23, Fowler's lawyers have put in more about how they want money unfrozen to fund his defense (that is, themselves). They write: "We are counsel to Mr. Reginald Fowler in the above-referenced action, and we submit this letter jointly with the government to request a bail hearing during the week of October 26, 2020. At the October 15, 2020 status conference, we advised the Court that we had informed the government of our intention to request a modification of the defendant’s current bail conditions to allow him to fund his defense. The Court instructed the parties to file a joint status report on the bail application today. Unfortunately, the parties have been unable to reach an agreement. By way of summary, the defense seeks an adjustment of the May 8, 2019 letter (the “Letter”)(attached), endorsed by the Court, which served as the basis of Mr. Fowler’s release on bond with conditions. Among other elements, the Letter includes, as the fifth bail condition, that “[n]o new lines of credit without [Pretrial Services] approval” shall be issued to the defendant. The Letter also references the five properties that the government required the defendant to post as security for the $5 million personal recognizance bond. The defense requests modification of both of these items." Full letter on Patreon here.

From Oct 15: Fowler's lawyer wants a delay of January 2021 trial date. Cites Portugal, saying the COVID situation there is "worse that in the US."

Judge Carter: I think it makes sense to postpone the trial. We need one of the bigger rooms, my courtroom is not one. Let's make the January 11 trial date now just another telephone conference. "At once point there was almost a resolution..."

Judge Carter: It seemed that forfeiture was the sticking point at the time. Has there been any progress? The Court could deal with forfeiture without a jury trial. Any discussions?

Fowler's counsel: They superseded the indictment. All discussions stopped.

AUSA Seb Swett: It's true, since we superseded, no talks.

Judge Carter: Mr Fowler could plead to the indictment, without a deal with the government, and we deal with forfeiture separately. Any thoughts?

Fowler's lawyer: There was always a looming wire fraud count
AUSA Swett: We would request a new trial date be set, maybe three months out from January 11.  Fowler's lawyer: We'd like the discovery for the wire fraud count. I don't see why since there's not threat of violence they are holding back all the 302s

Judge Carter: I'm not going to order US to provide that information, at least at this time. Let's pick an April trial date. Monday, April 12. We'll see what happens.

Fowler's lawyer: We'd like the security for his bond to be released. He's had $258 million frozen

Fowler's lawyer: We'd like a hearing on that next week.

Judge Carter: Let's set a date next week for a filing of a joint status report. Oct 23. And then a hearing if we need one. I exclude time to April 12, 2021. Adjourned.

 Watch this site. More on Patreon here.

 Previously, at what was billed as a change of plea proceeding, Fowler acknowledged the section of the law to which he was pleading guilty to violating: 18 US Code Section 1960. Yes, he said.

  Judge Carter said, We are here for a change of plea, and there was no objection. Judge Carter read from a plea agreement that Fowler had signed. All was going according to plan, until the issue of $371 million in forfeiture came up.

  Now on February 14, it would seem the plea is entirely and and pre-TRIAL schedule set: "Re: United States v. Reginald Fowler, S1 19 Cr. 254 (ALC) Dear Judge Carter: The parties respectfully write to request that the Court enter a schedule for pretrial motions in the above-captioned matter. The parties propose that pretrial motions be filed by February 28, 2020, with oppositions due on March 13, 2020, and any replies due on March 20, 2020." Inner City Press will continue on this case, and all things crypto in the SDNY.

   On February 5, Judge Carter "so ordered" the unsealing an Order about assets in three accounts at Santander UK PLC. But as of 10 pm on February 5, the Order was still not unsealed on PACER. Watch this site.
From the full transcript Inner City Press obtained access to on February 3:

AUSA Swett: "Your Honor, we're not in a position to represent that these accounts have $371 million, nor did we ever communicate that to defense counsel... I think 15 minutes to discuss this with defense counsel might be beneficial."

  But when they returned, Judge Carter brought up his (his wife's) JPMorgan Chase possible conflict of interest (she now works at Bank of New York). Fowler's attorney McGovern said, "Our issue is how much actual exposure under the forfeiture order after the accounts are liquidated Mr. Fowler is looking at." Hence, now a trial date. And this letter from the prosecutors:

"On Thursday, Mr. Fowler rejected the current plea offer, and the Government has formally withdrawn that offer; thus, the parties anticipate the case proceeding to trial as scheduled on April 28, 2020. Although the Court set a schedule for motions in limine in advance of trial, a motion schedule for general pretrial motions has not been set; thus, the parties will confer and submit a joint letter within the next week proposing a schedule for the Court’s consideration."

"Minute Entry for proceedings held before Judge Andrew L. Carter, Jr.: Pretrial Conference as to (19-Cr-254-01) Reginald Fowler held on 1/17/2020. Defendant Reginald Fowler appears with attorneys James Mc Govern and Nat Rosenblum. AUSA Jessica Fender, AUSA Sebastian Swett and AUSA Samuel Rothschild for the Government. Joint Status Report due 1/31/20. Motions in Limine Due: 4/14/20. Responses Due: 4/21/20. Voir Dire & Proposed Jury Instructions Due: 4/14/20. Final Pre-Trial Conference 4/27/20 at 12:00 p.m. Jury Selection & Trial 4/28/20 at 9:30 a.m. Time excluded from 1/17/20 to 4/28/20 in the interest of justice. All bail conditions remain in effect. See transcript for complete details. Court Reporter: Raquel Robles."

Fowler "Change of
                                            Plea Proceeding" Jan
                                            17, 2020 PACER

 Back on May 15 Fowler had entered not guilty pleas to four felony counts on in the U.S. District Court for the Southern District of New York courtroom of Judge Andrew L. Carter. 

   While the indictment, initially under seal, refers to Bank-1, the forfeiture allegations specify two HSBC Bank USA Accounts including 141000147, an HSBC Security USA account and two HSBC Securities USA / Pershing LLC accounts. Given the Justice Department's history with HSBC, for example on the bank's money laundering for drug gangs, some wonder why HSBC was not indicted. This is a case Inner City Press will continue to follow. It is US v. Fowler, 19-cr-00254 (Carter).


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