Police in Greece have arrested Ivan Manuel Molina Lee, president of payments processor Crypto Capital, for allegedly laundering hundreds of millions of dollars in drug proceeds for Columbian cartels.
Molina is being held now by authorities in Poland, who believe he used the country as a base of operations.
Crypto Capital’s channels appear to be global, however.
The company is perhaps best known for allegedly “losing” $850 million USD in funds belonging to Bitfinex, a Hong Kong-based, British Virgin Islands-registered cryptocurrency exchange now under investigation for fraud in New York.
The money is believed to have been seized from Crypto Capital by police in Panama, Poland and elsewhere who have alleged the money was of illicit origin.
In April, a man named Reggie Fowler was arrested in Arizona and charged with bank fraud, operation of an unlicensed money transmitting business and conspiracy for allegedly providing “shadow banking” services to Bitfinex as an agent of Crypto Capital.
Fowler, 60, is a known NFL investor in the US who used to co-own the Minnesota Vikings football team.
A corresponding raid on Fowler’s offices in April reportedly turned up $14 000 dollars worth of counterfeit 100 dollar bills stored in a filing cabinet.
Fowler has also reportedly been sued 35 times over the course of his career.
As well, Bitfinex was not the only cryptocurrency exchange using Crypto Capital.
The company has also apparently processed payments for Hong Kong-based BitMEX, Malta-based Binance, formerly Vancouver-based Quadriga CX, and San Francisco-based Kraken (which tweeted that it severed its relationship with Crypto Capitol in 2017).
Many cryptocurrency businesses have used peripheral payments firms like Crypto Capital because mainstream banks have often refused them service them over concerns about fund origins in crypto.
Polish news outlet wPolityce says police acting in the case against Molina Lee, “seized nearly 1.5 billion zlotys (~$388 million USD) from illegal sources in a bank in Skierniewice.”
They believe the money originated with Columbian drug cartels and was being laundered at cryptocurrency exchanges.
That money has now been seized as potential proceeds of crime, and the forfeiture is being described as the largest in Polish history.
According to previous reporting at Crowdfund Insider, on October 18, Bitfinex sought an order in California compelling testimony from Rondell “Rhon” Clyde Monroe, former VP at TCA Bancorp (a trust company).
Bitfinex also reportedly wants to access records of Monroe’s conversations with staff at Crypto Capital.
The exchange has argued that information held by Monroe could help it establish claim to the $850 million USD seized by various authorities from Crypto Capital.
Bitfinex has issued a statement in the wake of Molina Lee’s arrest claiming it is “the victim of a fraud,” in that Crypto Capital, “regularly referred to its integrity, banking expertise, robust compliance programme and financial licences. This was designed to assure us that Crypto Capital was capable of handling Bitfinex’s transactions.”
The exchange also claims that, “any suggestion that Crypto Capital laundered drug proceeds or any other illicit funds at the behest of Bitfinex or its customers is categorically false.”
The company promises to, “continue to work to recover all funds for and on behalf of our stakeholders.”