This post was originally published on this site
https://content.fortune.com/wp-content/uploads/2023/05/GettyImages-1249941620-e1683638819450.jpg?w=2048
In a late-night court filing, the legal team for disgraced FTX founder Sam Bankman-Fried began to mount its defense, arguing that all but three criminal charges from U.S. prosecutors should be dismissed.
Prosecutors from the Department of Justice in December charged Bankman-Fried with eight criminal counts related to the stunning collapse of his crypto empire, once valued at over $30 billion, extraditing him from a Bahamian prison. In superseding indictments, prosecutors charged Bankman-Fried with four new counts in February and a 13th in March, alleging that he had bribed Chinese officials. Bankman-Fried pleaded not guilty to all charges.
At a hearing in late March at a Southern District of New York courthouse, Bankman-Fried’s two lawyers signaled that they would contest the later charges, arguing that they had not been part of Bankman-Fried’s original extradition agreement. The filings on May 8, totaling hundreds of pages, reflect that argument, along with new complaints, including that the debtor estate of the bankrupt FTX is acting as an extension of prosecutors.
‘Dramatic—and troubling’
Bankman-Fried’s lawyers described the rapid indictment against their client, brought less than a month after FTX’s collapse, as a “classic rush to judgment,” asserting that the charges were “vague and non-specific.”
According to the filings, Bankman-Fried consented to a simplified extradition procedure from the Bahamas to be tried on seven of the eight counts in the original indictment—but not a count related to alleged campaign finance violations.
“Despite this clear direction from the Bahamian government, the Government now seeks to have Mr. Bankman-Fried tried on that charge as well,” Bankman-Fried’s lawyers wrote.
They further argue that the government turned traditional civil and regulatory processes related to broader turmoil in the crypto industry into federal crimes, describing the response from the Department of Justice as “dramatic—and troubling.”
The lawyers also target the FTX debtors—the team, led by veteran lawyer John Ray, tasked with overseeing the company’s bankruptcy. In a series of interviews and appearances, including before a House of Representatives committee in December, Ray has publicly criticized Bankman-Fried’s leadership, describing FTX as “uniquely destined to fail.”
“Mr. Ray and the FTX Debtors’ counsel have acted as a public mouthpiece for the Government by continuing to make disparaging remarks about Mr. Bankman-Fried in the FTX bankruptcy proceedings and have assumed the role of prosecutor by publicly labeling him ‘the villain,’” Bankman-Fried’s lawyers argue.
The filings go on to challenge specific charges brought against Bankman-Fried, including allegations that he funneled hundreds of millions in illegal political donations through straw donors—likely his deputies at FTX, former FTX co-CEO Ryan Salame, and former FTX director of engineering Nishad Singh, who agreed to cooperate with prosecutors in February. Salame’s home was searched by FBI agents as part of the FTX investigation in April. Bankman-Fried’s lawyers refer to the charge as “self-contradictory to the point of being incomprehensible.”
Bankman-Fried’s trial has already sparked intrigue due to a prolonged fight over his bail conditions, with prosecutors sparring with his lawyers over Bankman-Fried’s use of a VPN and contact with potential witnesses. The new filings likely will escalate the proceedings as Bankman-Fried’s lawyers seek to chip away at the daunting case. The trial is scheduled for October.
