United States v. BANKMAN-FRIED (FTX collapse/fraud)

searcher said:

Ben Armstrong, ... failed to appear in court ... has resulted in severe consequences, including potential criminal charges of harassment and contempt of court.
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The U.S. Department of Justice (DoJ) filed a new complaint against former FTX CEO Sam Bankman-Fried (SBF) on Thursday, accusing him of leaking the private diary of former Alameda CEO Caroline Ellison in an effort to discredit her as a witness.

In a new court filing submitted by U.S. Attorney Damian Williams on July 20, the DoJ accused Bankman-Fried of sharing Ellison’s journal and other personal writings with a New York Times reporter for an article published on Thursday, characterizing the leak as an “attempt to interfere with a fair trial by an impartial jury.”
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• Federal prosecutors told a Manhattan judge they wouldn’t pursue a campaign finance charge against FTX founder Sam Bankman-Fried.
• It’s the second time Manhattan prosecutors have had to forgo charging the billionaire, who is accused of precipitating the collapse of his crypto exchange through a multibillion-dollar fraud.

• Sam Bankman-Fried will head to jail on Friday, after a judge sided with a request by federal prosecutors to revoke the FTX founder’s bail over alleged witness tampering.
• Bankman-Fried will be remanded to custody directly from a court hearing in New York, where he will remain ahead of his criminal trial – which is due to begin on Oct. 2.

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The process of jury selection – voir dire, or “to speak the truth” – heated up late last week after government lawyers blasted the defense team’s proposed questions. A good number of them could influence potential jurors, they argued in a letter to Judge Lewis Kaplan. Some were too prying, others too specific, the feds said. A handful “are a thinly veiled attempt to advance a defense narrative,” the government claimed. Many of the questions they took umbrage with shared a common theme. They were about appearances.

Sam Bankman-Fried is (or was?) a master of appearances. From the first time this author spotted the sneakers and shorts-wearing, wild-haired billionaire on a yacht in Miami (circa June 2021) to his final television interviews preceding his arrest, the crypto wunderkind cultivated perceptions. He shuffled between personas that bolstered this image of approachable greatness. Sam was the guy you could trust to get it right even though he couldn’t tie his dress shoes.

“I think it’s important for people to think I look crazy,” the government quoted Sam as saying. His “crazy” (playing video games during interviews, dressing like a dorm room schlub, sleeping on a beanbag chair and, oh yeah, those disheveled curls) made his greatness (speaking on Capitol Hill, pioneering massive philanthropic endeavors and, oh yeah, the crypto exchange FTX) all the greater.

But the government doesn’t want to let the defense highlight any of that before the trial begins. They’re calling on Judge Kaplan to reject jury questions that probe the righteousness of philanthropic philosophies and campaign finance. Sam’s ADHD should be left off the table, they say. And don’t even think about interrogating jurors’ FTX-specific opinions.

Real or engineered, Sam’s game of perceptions has ended. He’ll begin the trial as a well-dressed defendant just like any other. The government doesn't want his old image to dictate who might eventually put him in a khaki jumpsuit.
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Sam Bankman-Fried’s trial begins at 9:30 a.m. ET (13:30 UTC) on Tuesday, Oct. 3, 2023, at the U.S. District Court for the Southern District of New York.

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Yesterday was arguably not a great day for Sam Bankman-Fried. First, the judge overseeing his case rejected all seven of his proposed expert witnesses*, questioning at least one’s qualifications and saying some others really wouldn’t be relevant to the case.

Shortly after, the Second Circuit Court of Appeals rejected Bankman-Fried’s appeal of Judge Lewis Kaplan’s ruling to revoke his release on bail.
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... the DOJ plans to call witnesses as soon as the week of Oct. 3, ...

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Rise, fall of Sam Bankman-Fried, FTX at center of Michael Lewis' new book | 60 Minutes​

FTX founder Sam Bankman-Fried’s entire crypto empire was a “house of cards” that was “built on a lie,” the U.S. Department of Justice said in its opening statement at the FTX founder’s trial.

Bankman-Fried’s defense team countered that the onetime FTX founder acted in good faith – even as his businesses grew too quickly and collapsed dramatically through no fault of his own, his lawyers said. They assigned some of the blame to one of his employees, his former paramour Caroline Ellison, and said she failed to install safeguards. Ellison has already pleaded guilty and will testify during the trial.
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Some of FTX's employees in the U.S. knew about the backdoor in the exchange that allowed Alameda Research to withdraw billions in customer funds, according to a Wall Street Journal report on Thursday.

The employees flagged their discovery to FTX's director of engineering Nishad Singh but the problem never got fixed, the WSJ reported, citing people familiar with the matter.

The team, who worked for LedgerX, the crypto derivatives exchange that FTX acquired in 2021, was examining whether the code for FTX's main exchange could be used in the U.S when they made the discovery.

LedgerX's chief risk officer Julie Schoening raised the concerns to her boss Zach Dexter, who then discussed it with Nishad Singh, one of FTX founder Sam Bankman-Fried's closest deputies.

Schoening was fired in August 2022, amid suggestions she had irritated her bosses over highlighting the problems.
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Therein lies the altruist. Sam styled himself a champion of the “effective altruist” movement, an offshoot of utilitarianism whose proponents seek to make as much money as possible and then give it to causes that might save the world. That was how Sam did it, at least. For a time, his crypto empire appeared to be rocketing the quirky quant toward maximum philanthropic velocity. He’d already started giving massive sums to politicians, charities and pet causes he thought could save humanity from itself.

(It came at the cost of his customers, according to prosecutors as well as “Enron John” Ray III. The crisis-era CEO of now-bankrupt FTX Group has spent the past 11 months on a highly lucrative global treasure hunt to claw back millions of donated dollars to make FTX customers whole.)
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Judge Lewis Kaplan continues to express his respect for the attorneys trying the case – but still wound up almost mocking lead defense counsel Mark Cohen on Wednesday after he objected to Ellison saying she “believes” former FTX executive Nishad Singh told her that offsetting ledger entries in FTX and Alameda’s books were meant for auditors.

“I believe this is Wednesday. I believe this is Wednesday. That’s not speculation. Overruled!” the judge said, getting the ruling in as Cohen said “withdrawn.”

He appeared to be losing his patience with the prosecution as well, chiding Department of Justice attorneys across Tuesday and Wednesday for mislabeled exhibits and seeming exasperated with their extensive focus on spreadsheets.
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Caroline Ellison has one more day on the stand, facing defense attorney Mark Cohen as he continues his cross-examination.

He only had a few moments with Ellison on Wednesday, trying to ask a question about FTX’s fiat account and how it tracked its funds – however, after some initial back-and-forth, it was clear he and Ellison were on slightly different pages about how different accounts were referenced, culminating in the best objection I’ve heard so far this trial.

“Objection Your Honor, this is confusing!” Assistant U.S. Attorney Danielle Sassoon said. ...
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Sassoon’s cross-examination evisceration of the alleged crypto fraudster was hard to watch.

Determined to highlight inconsistencies in the former crypto chief’s alternate history, the assistant U.S. attorney leveraged his prolific history of tweeting, interviewing and testifying before Congress about FTX’s purported greatness and safeness.

She wanted to catch Bankman-Fried in a lie. After four hours she’d at least gotten the next-best thing: evidence he’s is a VERY unreliable narrator.

“Would you agree that you know how to tell a good story?” Sassoon asked Bankman-Fried early on, prompting someone in the gallery to guffaw.

Bankman-Fried audibly bristled at Sassoon’s tactics. He taunted her in a sing-songy cadence when told to read FTX materials that contradicted him. His unyielding “yeps” started low on the y and finished high on the p. He spent most of cross-examination repeating variations of “I don’t know” (16 times) like “sounds plausible” (twice) “I may have” (17 times), “I don’t recall” (27 times) and “I’m not confident” (three times), when asked about his own words.

“I can explain it, if you want,” Bankman-Fried offered on a handful of occasions where Sassoon forced him to accede into damning characterizations. She never took him up on it.

His responses weren’t always responses. Judge Lewis Kaplan reprimanded Bankman-Fried for avoiding prosecutor questions and interjecting his own. His gaze stayed mostly on Sassoon, but sometimes he darted to the jury box.

There, 17 pairs of eyes may have shot back a mix of skepticism and, by the end of the day, boredom and perhaps a bit of despair. Some jurors were growing visibly tired of Bankman-Fried’s waffling “I don’t remember” defense after four weeks of trial. A few new sleepyheads drifted off.
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She’ll go for another two hours of cross-examination Tuesday.

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BeefJerky said:

He should have left the country when he had the chance.

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BeefJerky said:

He was out of jail for quite awhile at his parents. These people always think they're going to beat the charges. Not sure why. He should have gone to a non extradition country. He still had the resources.

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The decision to avoid a second trial charging Sam Bankman-Fried with a conspiracy to make unlawful political donations and bribery of foreign officials has many conservatives up in arms.

Federal prosecutors said Friday that they do not plan to proceed with a second trial against Sam Bankman-Fried, citing public interest in a speedy resolution of the case that has seemingly irritated those who were hoping to see the disgraced FTX founder prosecuted to the fullest extent.

In a Friday letter filed in federal court in Manhattan, prosecutors said they do "not plan to proceed with a second trial" as "much of the evidence that would be offered in a second trial was already offered in the first trial and can be considered by the Court at the defendant’s March 2024 sentencing."
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The decision by prosecutors not to hold a second trial against Bankman-Fried quickly drew backlash from those who had followed the case.

"So we won’t know which politicians he bribed or who’s campaigns he influenced? That collective sigh of relief you are hearing is from the DEEP STATE," Rep. Tim Burchett, R-Tenn., wrote in a Friday night post to X.

Conservative commentator John Cardillo also weighed in on the announcement from prosecutors, accusing the Department of Justice of shielding Democrats from being named as recipients of Bankman-Fried donations.

"Sam Bankman-Fried will not face second trial," Cardillo wrote in an X post. "DOJ is protecting his Dem donation recipients."

CryptoLaw founder John Deaton, who has consistently commented on Bankman-Fried's case, slammed the decision by prosecutors as a "disgrace."

"The DOJ has shown again, that it is NOT an independent agency," Deaton said on X. "Who is the Attorney General protecting?"
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