Episode 6 – Crypto Capital Corp: the quiet billion dollar cryptocurrency scam

Crypto Capital Corp: the quiet billion dollar cryptocurrency scam Crypto Critics' Corner

Cas and BT discuss Crypto Capital Corp, a defunct, fake, Panamanian money services transmitter that helped service almost every important cryptocurrency exchange, owned and operated by Reginald Fowler, Ivan Manuel Molina Lee, and Oz and Ravid Yosef. 

In this episode Cas and I take a look at the payments processor for Bitfinex, Tether, Kraken, Quadriga, and Bitmex. They’re implicated in money laundering for the cartels, wire fraud, bank fraud, embezzlement, and more.

I covered it here:

Cas discusses tracking Ravid Josef using her Google reviews here.

He also discusses Crypto Capital Corp and the web around it more broadly here.

English Transcript:

Cas Piancey: Welcome back, everyone.

Cas Piancey: I'm Cas Piancey, and I'm here as usual with my partner in crime, Bennett Tomlin.

Cas Piancey: How are you doing, buddy?

Bennett Tomlin: I'm doing well.

Cas Piancey: Excellent.

Cas Piancey: We today are going to be jumping into a topic that bother of us, hold kind of near and dear to our hearts.

Cas Piancey: It's called Crypto Capital Corp, and it's an unregistered money services business.

Cas Piancey: If we're going to be just downright quick about the point we're making here, but I think not many people are super familiar with this business, and it's important for them to have kind of an understanding of what happened here if we want to talk about the people involved and ultimately what went down.

Cas Piancey: So, Bennett, can you give everyone kind of an introduction to what Crypto Capital Corps is?

Bennett Tomlin: Sure.

Bennett Tomlin: Cryptocurrency Core was a Panamanian and Columbia based payment processor that acted as kind of a shadow bank for a whole bunch of cryptocurrency exchanges.

Bennett Tomlin: A lot of these exchanges struggled to get banking, so they relied on payment processors like Crypto Capital Corp.

Bennett Tomlin: In order to service their customers.

Bennett Tomlin: Now, Crypto Capital Corp itself was a criminal enterprise implicated in money laundering for the cartels, embezzlement counterfeiting, and a whole bunch of other fraudulent practices, which eventually led to them being shut down by authorities of several different countries.

Cas Piancey: The reason that we're interested in this seemingly random Panamanian fake money service business, criminal money services business, is because of their deep connections with Bitfinex and ultimately how that led to Bitfinex having and Bitfinex and Tether having so many problems.

Cas Piancey: All of this started to come to light at some point in 2019.

Cas Piancey: They were handed down an indictment by the Southern District of New York and the Department of Justice, where they were implicated in a bank fraud claim, and they were implicated in conspiracy to operate an unlicensed money transmitting business and conspiracy to commit bank fraud.

Cas Piancey: It involves a cast of kind of wily characters, I would say.

Cas Piancey: So let's talk about how cryptocurrency got started.

Bennett Tomlin: So Crypto Capital Corps was started in 2013.

Bennett Tomlin: Oz Josef, who is one of the main people behind Crypto Capital Corp, started posting on Bitcoin, talking on Reddit about how he had connections to a couple of the small banks.

Bennett Tomlin: And he eventually used these connections to these banks to start his own payment processing company, Crypto Capital Corps.

Bennett Tomlin: He started this with Ivan Manuel Molina Lee as the nominal director for these corporations, and then they fundraised for it through a platform called Havelock Investments, which was popular at the time among cryptocurrency businesses because it was basically a way for them to do an unregistered and unregulated securities offering and sell equity in their businesses for Bitcoin.

Bennett Tomlin: So Crypto Capital Corps starts fundraising on there, uses their connections to a couple of existing banks, starts lying to other banks to get more accounts, and they eventually become this shadow bank for a huge number of cryptocurrency exchanges.

Cas Piancey: So, yeah, let's get into this cast of characters, the two I prefer to start off with are Ivan and Oz.

Cas Piancey: Ivan Manuel Molina Lee is this Canadian Panamanian fly by night character, but he also seems to be intricately involved in the business of Crypto Capital Corp.

Cas Piancey: This guy is a Panamanian Canadian who went around and founded all of these very shady businesses and worked with very local and small banks to help.

Cas Piancey: I don't know what else to call it Besides criminals move money around the world.

Cas Piancey: In the end, Ivan was the first one who was arrested and subsequently charged with everything or with anything.

Cas Piancey: That was in March of 2019.

Cas Piancey: But shortly thereafter, Oz comes into the picture because he gets indicted, but by the US.

Cas Piancey: So the US is looking for Oz, Reginald Fowler and Oz's sister, Ravid Yosef.

Cas Piancey: So two of the Yosefs and Reginald Fowler become charged criminals.

Cas Piancey: Two of them remain at large.

Cas Piancey: Reginald Fowler, who was formerly an investor in the Minnesota Vikings and also a defunct NFL competitor.

Cas Piancey: I don't know if it was the XFL or whatever it was A-A-F-L or AFL.

Cas Piancey: He apparently was a bad actor involved in that as well.

Cas Piancey: So it's funny that they were so successful, I guess, is the way I look at this, because on the surface level, they're all kind of shady and not necessarily the most competent criminals.

Bennett Tomlin: I'm not sure I have the same takeaway.

Bennett Tomlin: I think that what we see with Crypto Capital Court is a surprising level of sophistication in many regards, you've got an international network of shell corporations spread across a huge number of jurisdictions.

Bennett Tomlin: When Reggie Fowler was arrested, he had in his possession the materials needed to counterfeit US dollar bills.

Bennett Tomlin: They had counterfeit bond certificates and a whole bunch of other stuff that, to me, suggest they're one of the more sophisticated money laundering operations.

Cas Piancey: I hear what you're saying, but I also think that necessity is the mother of invention.

Cas Piancey: So the reason you see Reginald Fowler with a counterfeiting machine isn't because he's a great counterfeiting genius.

Cas Piancey: It's because he was so stupid and desperate that he was like, I'm going to counterfeit $14,000 worth of money right now.

Cas Piancey: So while I understand what you're saying, I tend to disagree.

Cas Piancey: Just because they got caught, they got caught relatively easily.

Cas Piancey: And we have people like Giancarlo and we have VDV, and we have Phil Potter, we have the Bitfinex execs, and they're all walking free and happy.

Cas Piancey: Meanwhile, these guys who helped run shadow banking for all of cryptocurrency for a while, these guys really saved a lot of companies.

Cas Piancey: Really.

Cas Piancey: I mean, a lot of these companies couldn't get banking back in the day, right?

Bennett Tomlin: Yeah, that's very true.

Bennett Tomlin: And I think it's actually an important point to make because you'll sometimes hear Bitfinex, especially trying to paint themselves as a victim in the interaction.

Bennett Tomlin: But it's important to remember that Bitfinex would have been cut off from basically all banking years before they were without having Crypto Capital to rely on for that period.

Cas Piancey: And I think other cryptocurrency exchanges and their CEOs have similarly, maybe not publicly stated as much, but it's well known that people like Jesse Powell talked about having worked with Crypto Capital Corps because they were unable to get banking.

Cas Piancey: Oftentimes these multimillion dollar, close to a billion dollar cryptocurrency exchanges would have no banking whatsoever.

Cas Piancey: And they were all relying on Reginald Fowler, Ivan Manuel Molina Lee, and Oz Yosef.

Cas Piancey: Oftentimes they had no idea who these people actually were.

Cas Piancey: There was no due diligence done often enough.

Cas Piancey: Right.

Cas Piancey: So they weren't sure who they were talking to.

Cas Piancey: And let's talk about the transcripts that have been shared between Giancarlo Devasini, who is the CFO of Bitfinex and Tether, and Oz Josef, the CEO of Crypto Capital Corp.

Bennett Tomlin: He's one of the principals of Crypto Capital Corp.

Bennett Tomlin: I don't know if he's the CEO.

Cas Piancey: But I'll just go ahead and be Merlin.

Cas Piancey: Merlin is Giancarlo Devasini and I will hand over any other discussions to Bennett to go through.

Cas Piancey: But let's just quickly run through what we can here.

Cas Piancey: Hey Oz, sorry to bother you every day.

Cas Piancey: Is there any way to move at least $100 million to we're seeing massive withdrawals and we're not able to face them anymore unless we can transfer some money out of crypto capital.

Cas Piancey: I understand some of the funds are being held by, but what about the rest?

Cas Piancey: Under normal circumstances, I wouldn't bother you.

Cas Piancey: I mean, I never did so far, but this is quite special situation and I need your help.

Cas Piancey: Thanks.

Cas Piancey: I've been telling you since a while.

Cas Piancey: Too many withdrawals waiting for a long time.

Cas Piancey: Is there any way we can get money from you, Tether or any other form apart from crypto capital?

Cas Piancey: We're running low on cash reserves.

Cas Piancey: Please help.

Bennett Tomlin: I know we are following the banks.

Bennett Tomlin: We post as many as we can and let them process as much as possible.

Bennett Tomlin: According to them, every time we push them, they push back with account closure without reason.

Cas Piancey: Dozens of people are now waiting for a withdrawal out of Crypto Capital.

Cas Piancey: I need to provide customers with precise answers at this point.

Cas Piancey: Can't just kick the can a little more.

Cas Piancey: The international I mean.

Bennett Tomlin: I will keep you posted here on the process of all international payments.

Cas Piancey: Please understand, all of this could be extremely dangerous for everybody.

Cas Piancey: The entire crypto community, BTC, could tank below one K if we don't act quickly.

Cas Piancey: That's the main point that we want to focus on as critics of Bitfinex and Tether.

Cas Piancey: There's more problems.

Cas Piancey: There's more of Giancarlo begging Oz for funds and releasing funds and releasing tethers and anything to get cash reserves more liquid and just problems and problems and problems.

Cas Piancey: I think the main focus of that and something that has driven all of us, whether it's you or me or Bitfinex, is that the CFO of Tether and Bitfinex in a text message, whether it's hyperbole or not, is talking about how this one centralized money services business that's helping Bitfinex could simply crash Bitcoin to $1,000.

Bennett Tomlin: Yeah, it does feel kind of absurd when you hear them saying this and having this conversation.

Bennett Tomlin: And I think it's also important to contextualize this.

Bennett Tomlin: You hear us discussing and you can hear cas as Giancarlo saying, like, there's all these withdrawals pending and we've got nothing we can do.

Bennett Tomlin: And at the same time, Bitfinex is issuing statements to the public saying withdrawals are working totally fine, there's no problem.

Bennett Tomlin: And this is all going on behind the scenes.

Cas Piancey: And the reason that this causes problems for BitFinex and Tether is because Crypto Capital Corps, while trying to delay these fund transfers, they weren't just having a little bit of money frozen.

Cas Piancey: They had $850,000,000 of money frozen.

Cas Piancey: And these funds were frozen across the world.

Cas Piancey: So these funds were frozen in Poland, they were frozen in Portugal.

Cas Piancey: They were frozen at HSBC accounts.

Cas Piancey: They were frozen at I remember seeing something like ten or 15 different bank accounts that they were using.

Cas Piancey: They were everywhere.

Cas Piancey: They were going anywhere they possibly could.

Cas Piancey: And like I said, they were very desperate.

Cas Piancey: And it becomes clear the governments of these countries work together, cooperated to freeze these monies.

Cas Piancey: And the burning question at the heart of this is if Bitfinex thinks they're entitled to these funds, why were they frozen in the first place?

Bennett Tomlin: Well, I think what it comes down to here is that Crypto Capital Corp is a criminal organization who was likely money laundering for the Colombian cartels.

Bennett Tomlin: That's why Evan Manuel Molina Lee got picked up.

Bennett Tomlin: They were lying to these banks about their business, telling them that their business was real estate instead of servicing cryptocurrency transactions.

Bennett Tomlin: So they'd frequently get accounts shut down for that reason.

Bennett Tomlin: And just Besides that, they were embezzling out of those accounts, and they were moving this money for cryptocurrency exchanges who themselves don't have the most Sterling reputation of trying to avoid money launderers money.

Cas Piancey: Now Bitfinex believes it's owed the frozen dollars.

Cas Piancey: What are your thoughts on that?

Bennett Tomlin: I think that Bitfinex gave Crypto Capital Corp a little over a billion dollars in total of commingled, client and corporate funds.

Bennett Tomlin: And the tricky thing, one of the things that gets really confusing here is that Bitfinex did that without ever signing any kind of contract or agreement with Crypto Capital Corp.

Bennett Tomlin: My intuition is that between the criminal activities Crypto Capital Corp was involved in and the lack of BitFinex having an agreement or contract stipulating that those funds are supposed to be theirs, they are going to struggle to retrieve any of those funds.

Cas Piancey: I agree with that, especially the commingling.

Cas Piancey: And the lack of a contract instantly makes it 100 times, 1000 times more difficult to retrieve.

Cas Piancey: I mean, there might be some documentation somewhere.

Cas Piancey: They're probably going to use things like text messages.

Bennett Tomlin: Further making it more complicated is the fact that Cryptocurrency Core was running two sets of books.

Bennett Tomlin: So Besides their normal books, where they were tracking what was coming in and out for their different customers.

Bennett Tomlin: They were also embezzling 10% off the top of that and had a separate set of books they called the master US workbook, which showed the reality of the accounts.

Bennett Tomlin: And so you've got commingled client and corporate funds commingled between Crypto Capital Corps, different clients involved in money laundering with no contract money embezzled off the top, and two sets of books you need to try to decode to figure out who's actually owed money.

Cas Piancey: This is intimately involved with BitFinex and Tether, obviously, but I think it's a story in and of itself.

Cas Piancey: I've been watching this for so long now, and seeing Reginald Fowler took the fall immediately.

Cas Piancey: He was arrested.

Cas Piancey: Ivan Manuel Molina Lee.

Cas Piancey: That's almost a tragic story to me that the guy gets picked up in Greece, shipped off to Poland, and put in jail for two years.

Cas Piancey: And I don't know about you.

Cas Piancey: I have not heard about him since he's gone.

Cas Piancey: No one talks about him anymore.

Cas Piancey: He just vanished.

Cas Piancey: And then we have the two fugitives.

Cas Piancey: And that also makes the situation complicated and weird because they're not the most brilliant people.

Cas Piancey: Ravid Yosef, the sister of Oz Yosef.

Cas Piancey: I tracked her by using her Google reviews to Israel, where she likely is right now.

Cas Piancey: I don't think she can do much traveling these days.

Cas Piancey: Extradition policies are intact for many countries with the US, but staying in Israel can be very safe for cryptocurrency entrepreneurs because there's a family of cryptocurrency entrepreneurs there.

Cas Piancey: Moshe Hogeg is someone who comes up a lot, and some other ones, there are a lot of Israeli cryptocurrency scammers.

Cas Piancey: Netanyahu isn't tight with them.

Cas Piancey: I don't think we're ever going to see Ravid Joseph and Oz Josef get justice like Reginald Fowler and Emil.

Cas Piancey: I think those two are gone for good, and I don't think they're the brightest criminals.

Cas Piancey: They're just lucky.

Bennett Tomlin: Yeah.

Bennett Tomlin: Well, I think there might be a good point to touch on here is that the long arm of the US Justice system is quite long, and it can reach you in a lot of different places.

Bennett Tomlin: But it is difficult in certain countries, certain places like that, and without a sufficiently compelling reason, lots of times I think you won't see, like the Department of justice, engage in those really complicated international negotiations to try to get that type of fugitive.

Cas Piancey: At this point, there's only one court case that we're focused on because the Ivan Manuel Molina Lee case, no one has any idea what's going on as far as the Yosefs are concerned, they're fugitives.

Cas Piancey: So the only one who and he's out on bail, as far as I know, living the good life in Arizona.

Cas Piancey: But the only one who is currently even being tried is Reginald Fowler, and he keeps wandering between copying a plea and not copying a plea.

Cas Piancey: What do you think is going on there?

Bennett Tomlin: I one weekend decided to read every single document in both pockets for the Reggie Fowler case because I was curious and he is an interesting fellow because like you said, he was ready going to his lawyer to sign a plea deal and deal with these charges.

Bennett Tomlin: The day they get into court to sign that plea deal, the judge rereads the charges.

Bennett Tomlin: There's a small question about one of the charges, and they end up not signing the plea deal after that point because Reggie stops paying his lawyers.

Bennett Tomlin: His lawyers stop being his lawyers.

Bennett Tomlin: Then there's a whole difficulty in Reggie finding new lawyers because he now has a history of not paying his lawyers.

Bennett Tomlin: And so the case has been delayed for several months now, and it's supposed to resume soon.

Cas Piancey: And it's honestly a little bit unclear whether or not he is going to take a plea deal or try and take this to trial lending credence to your thought process that they're smarter than I perceive them as I will say that I've had a attorney that these kind of delays and these kind of pushes to frustrate the prosecution can often be effective.

Cas Piancey: If you drag a court case out long enough, sometimes the wind just falls out of the sales.

Cas Piancey: Reggie doesn't seem maybe as stupid as I think he is when it comes to that.

Bennett Tomlin: Yeah.

Bennett Tomlin: And I think if you read the prosecution's filings recently in that case, you can honestly almost read the frustration in their words where they say since he's had all this time, since there's already been these other law firms which have prepped the work, it shouldn't need to be delayed.

Bennett Tomlin: And I think there was one where they use the phrase it is absurd to think that he would need this much time to prepare for this when he was already ready to plea on whatever date to whatever.

Bennett Tomlin: And so there does seem to be almost a sense of palpable frustration among the prosecution in that case.

Cas Piancey: So I'm just going to do a quick summary basically, I think here Ivan Manuel Molina Lee, one of the founders and directors, along with Oz, has been arrested and charged with something like bank fraud.

Cas Piancey: In Poland.

Cas Piancey: We have Reginald Fowler, former NFL Minnesota Vikings owner, part owner and part owner of some NFL competitor, is also being charged with bank fraud and conspiracy to commit bank fraud and several other crimes.

Cas Piancey: The other two are fugitives.

Cas Piancey: These people engaged in criminal money laundering and bank fraud activity.

Cas Piancey: Essentially, these guys were moving money for criminals, whether it was drug dealers or people who weren't reporting their taxes or people illegally engaging in crypto, pump and dumps or all of the above.

Cas Piancey: They were clearly providing banking services for just about anyone who wanted it.

Cas Piancey: And that has been stopped.

Cas Piancey: But that does not mean that shadow banking is any less of a concern now or that even smaller local banks don't suffer from similar kind of bigger let's be real or bigger banks don't suffer from kind of similar characteristics often.

Bennett Tomlin: I believe that there are probably still other shadow banking operators like cryptocurrency core Operating probably specifically even in the cryptocurrency space Because it is often hard for these companies to get banking.

Bennett Tomlin: And I think Besides moving beyond just cryptocurrency, there's a need for shadow banking in a lot of industries, both legitimate and illegitimate.

Bennett Tomlin: It would not surprise me if there's cannabis companies who are relying on structures Somewhat similar to Crypto Capital Corps and then we know Crypto Capital Corp was servicing outright illegal businesses like the Columbian cartels and things like that.

Bennett Tomlin: And so there's probably other structures like Crypto Capital Corp that exists to service just those outright illegal businesses and they can more effectively service those illegal businesses when they serve pseudo legal or legal businesses.

Bennett Tomlin: And so they're probably actively recruiting the fringe industries like cryptocurrency, cannabis and things like that.

Cas Piancey: Agreed, 100%, but I think it should make most people do a double take that they were so closely connected and that almost every other well known cryptocurrency exchange at that point had abandoned them.

Cas Piancey: No due diligence, no contracts, no concern for customers.

Cas Piancey: It kind of epitomizes a lot of cryptocurrency exchanges and it also epitomizes how cryptocurrency core treated those cryptocurrency exchanges themselves.

Cas Piancey: So there's kind of two weird rationales here.

Cas Piancey: There's the idea that this was definitely not Bitfinex's fault and they were forced to involve themselves with this bad actor.

Cas Piancey: And then there's the competing argument, I think closer to what you and I seem to believe, which is that no one forced Bitfinex to work with cryptocurrency core and choosing such a lousy business partner is in the end, all on them.

Bennett Tomlin: It's clear that either Bitfinex is complicit and knew that Crypto Capital Corp was likely engaged in illegal activities or Bitfinex and tether were absolutely negligent and are not responsible enough corporate entities that anyone should be giving them money.

Cas Piancey: So that's going to do it, guys.

Cas Piancey: That's our quick coverage of Crypto Capital Corp next week we're going to be covering a summary of hopefully QuadrigaCX a little bit.

Cas Piancey: I know that we're competing with the CBC, the Canadian broadcasting Corporation, But I don't really care.

Cas Piancey: We had it first.

Cas Piancey: Goddamnit.

Cas Piancey: We're going to be back within a week or so and I'm excited.

Cas Piancey: I'm excited to be doing this regularly with you, Bennett, if you have anything else you'd like to say, I'm excited.

Bennett Tomlin: Hopefully people will something new today and we can keep talking about some of the strangeness in the cryptocurrency world.

10 responses to “Episode 6 – Crypto Capital Corp: the quiet billion dollar cryptocurrency scam”

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