Sam Bankman-Fried, in First Detailed Defense, Seeks to Dismiss Charges

Sam Bankman-Fried, the founding father of the collapsed cryptocurrency alternate FTX, has issued his first detailed authorized protection since prosecutors accused him of fraud, looking for to dismiss a number of of the costs and claiming that the high-powered legislation agency representing FTX in its chapter has been doing the federal government’s bidding.

In court docket filings late Monday, legal professionals for Mr. Bankman-Fried mentioned FTX and its legal professionals on the agency Sullivan & Cromwell had turn out to be de facto brokers of federal prosecutors constructing the legal case towards him and could be withholding essential proof.

“FTX’s authorized advisors went to the federal government to accuse Mr. Bankman-Fried behind his again with out realizing the complete info, and in the end compelled him to step down as CEO,” the legal professionals wrote.

For months, Sullivan & Cromwell has funneled paperwork and different proof to the prosecution, the filings say. Mr. Bankman-Fried’s legal professionals claimed that prosecutors had been looking for solely probably the most incriminating paperwork, although FTX may additionally be sitting on materials that would assist the protection.

In impact, they argued, prosecutors have been “outsourcing” the authorized requirement to present probably useful materials to the protection staff, shifting that accountability to a “non-public occasion” with no obligation to Mr. Bankman-Fried.

Representatives for FTX, Sullivan & Cromwell and the US Attorney’s Office in Manhattan didn’t instantly reply to requests for remark.

Federal prosecutors have charged Mr. Bankman-Fried with orchestrating an enormous fraud that misappropriated billions of {dollars} in buyer cash from FTX. The authorities have additionally charged him with cash laundering, bribing the Chinese authorities and overseeing an unlawful marketing campaign finance scheme that showered tens of tens of millions of {dollars} on Democratic and Republican candidates.

Mr. Bankman-Fried, 31, has pleaded not responsible to these prices. His legal professionals on the New York agency Cohen & Gresser have mentioned they’re ready to go to trial in federal court docket in Manhattan as quickly as October.

Mr. Bankman-Fried was launched on bail in December however confined to his mother and father’ residence in Palo Alto, Calif. He faces an uphill authorized battle. Three of his high colleagues have pleaded responsible and are cooperating with prosecutors. If convicted, he might spend a long time in a federal jail.

The motions filed on Monday are almost definitely the primary of many makes an attempt by Mr. Bankman-Fried’s authorized staff both to search the manufacturing of extra paperwork from prosecutors or to persuade Judge Lewis A. Kaplan of Federal District Court in Manhattan to dismiss among the 13 counts towards him.

In all, Mr. Bankman-Fried is looking for to dismiss 10 of the costs. The filings argue that 4 of the counts — together with the overseas bribery cost, the marketing campaign finance cost and a financial institution fraud cost — violated components of the extradition course of between the United States and the Bahamas, the place Mr. Bankman-Fried was arrested. In extradition instances, prosecutors are normally restricted in bringing new prices after a defendant has been transferred.

The protection legal professionals argued that one other six of the costs needs to be dismissed for being too obscure or having different authorized flaws. They mentioned the prosecutors had displayed an “eagerness to run up prices towards Mr. Bankman-Fried.”

Much of the protection’s early technique additionally focuses on the function of Sullivan & Cromwell in the case. Mr. Bankman-Fried had employed legal professionals from the agency to assist with a spread of authorized duties earlier than FTX collapsed. When the alternate imploded, Sullivan & Cromwell’s legal professionals took management, naming a veteran restructuring professional, John Jay Ray III, to change Mr. Bankman-Fried. One of Mr. Ray’s first acts was to difficulty a scathing report that mentioned FTX beneath Mr. Bankman-Fried had lacked inside controls.

But in January, the US trustee in the chapter case raised objections to the legislation agency’s illustration of FTX, arguing that it had not absolutely disclosed the extent of its earlier authorized work for the alternate. One of FTX’s former inside legal professionals claimed in a court docket submitting that Sullivan & Cromwell’s earlier work created main conflicts of curiosity.

A decide in the end dominated that the agency might proceed to oversee the chapter.

In the court docket filings on Monday, Mr. Bankman-Fried portrays Mr. Ray, FTX and the legal professionals at Sullivan & Cromwell as all working towards him, with the blessing of the federal government.

Mr. Ray, FTX and the legal professionals “have acted as a public mouthpiece for the federal government” and “have assumed the function of prosecutor by publicly labeling” Mr. Bankman-Fried as “’the villain,’” the filings say.

Leave a Comment

Your email address will not be published. Required fields are marked *