Prosecutors within the felony case in opposition to Sam Bankman-Fried, the founding father of the collapsed cryptocurrency change FTX, on Monday supplied essentially the most detailed account so far of the proof they plan to make use of to convict him at trial in October.
In a 70-page courtroom submitting, the prosecutors mentioned they might draw on testimony from a few of Mr. Bankman-Fried’s closest advisers, in addition to an professional witness and different workers of FTX and Alameda Research, a crypto hedge fund he additionally based.
The prosecutors additionally mentioned they deliberate to make use of notes that Caroline Ellison, one among Mr. Bankman-Fried’s high lieutenants, took after conversations with him, together with a memo titled “Things Sam Is Freaking Out About.” And they mentioned they might introduce a recording of a gathering wherein Ms. Ellison informed Alameda workers that she had labored with Mr. Bankman-Fried to siphon funds from FTX clients’ accounts.
Mr. Bankman-Fried, a onetime crypto mogul who constructed FTX into one of many world’s largest digital foreign money exchanges, was arrested in December and charged with orchestrating a sweeping scheme to make use of buyer deposits to finance actual property purchases, charitable giving and donations to politicians. Ms. Ellison and two different high FTX executives, Gary Wang and Nishad Singh, have pleaded responsible to taking part within the effort and agreed to cooperate with prosecutors.
Mr. Bankman-Fried faces seven fees of wire fraud, securities fraud, commodities fraud and cash laundering. He has pleaded not responsible and is scheduled to go on trial on Oct. 2. Last week, he was despatched to jail after the choose overseeing the case revoked his bail over allegations that he was making an attempt to intimidate witnesses.
A spokesman for Mr. Bankman-Fried declined to remark. A lawyer for Ms. Ellison didn’t reply to a request for remark.
The prosecutors’ submitting on Monday argued that the proof they gathered must be legally admissible at Mr. Bankman-Fried’s trial. The proof contains monetary information, spreadsheets, Google paperwork and personal communications, in line with the submitting.
Mr. Bankman-Fried’s attorneys submitted their very own memo on Monday, claiming that prosecutors had “repeatedly failed” to fulfill the deadlines for turning over proof to the protection. Just three days in the past, the submitting mentioned, prosecutors produced almost 750,000 pages of Slack messages from Mr. Wang’s laptop computer. They mentioned the federal government shouldn’t be allowed to make use of proof produced to the protection after July 1, and that different materials, together with proof associated to Mr. Bankman-Fried’s resignation from FTX, also needs to be unnoticed of the trial.
“The defense does not have unlimited resources and must spend the limited time left before trial preparing its defense rather than reviewing eleventh-hour productions,” the submitting mentioned.
Over months of investigation, prosecutors have amassed hundreds of thousands of pages of proof as they’ve ready for Mr. Bankman-Fried’s trial, one of many largest troves ever collected in a white-collar securities fraud case introduced by the federal authorities in Manhattan.
The authorities’s courtroom submitting on Monday supplied the primary detailed take a look at the proof and the witnesses that prosecutors plan to introduce at trial. The authorities plans to quote spreadsheets maintained by Ms. Ellison, Mr. Singh and Mr. Wang that “kept track of illicit money flows between Alameda and FTX,” the submitting mentioned, and to debate the FTX commercials that appeared on TV.
Prosecutors additionally plan to quote Mr. Bankman-Fried’s political giving as proof for the fraud fees. The submitting cited a textual content message {that a} high-ranking FTX govt, Ryan Salame, despatched to a member of the family in November 2021, describing Mr. Bankman-Fried’s plans to make use of political donations to advertise cryptocurrencies in Washington.
The goal of the donations was to “weed out anti crypto dems for pro crypto dems and anti crypto repubs for pro crypto repubs,” Mr. Salame wrote within the message. He added that Mr. Bankman-Fried would “route money through me to weed out that republican side.”
Mr. Salame has been underneath investigation for months, culminating in a raid of his dwelling in April, although he has not been charged with any crimes. The submitting mentioned he was “unavailable as a witness” as a result of his lawyer had invoked his Fifth Amendment proper to not supply self-incriminating data.
A lawyer for Mr. Salame didn’t reply to a request for remark.
But Ms. Ellison, Mr. Singh and Mr. Wang are all anticipated to testify, the submitting mentioned. The prosecutors mentioned they might additionally name different former FTX and Alameda workers, together with somebody who “regularly consulted with the defendant about FTX’s fund-raising efforts.”
The testimony from Ms. Ellison specifically is prone to be essential to the prosecution’s case. In addition to operating Alameda, Ms. Ellison was in an on-and-off romantic relationship with Mr. Bankman-Fried.
The submitting supplies a transcript of a gathering that Ms. Ellison held with Alameda workers in November 2022, as FTX and Alameda have been collapsing amid a run on deposits. According to the transcript, an worker requested Ms. Ellison who had made the choice to attract on buyer funds.
“Um … Sam, I guess,” she replied.
Matthew Goldstein contributed reporting.
Source: www.nytimes.com