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BitMEX Hayes Got 6 Months at Home as Delo Back to HK Now Reed Case Shifted To MA

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Oct 23 – Four executives of the Bitcoin Mercantile Exchange or BitMEX were criminal defendants for violations of the Bank Secrecy Act.   On February 24, with no notice, a guilty plea - each to a single count.

      Back on October 13, 2021 U.S. District Court for the Southern District of New York  Judge John G. Koeltlt held a proceeding. Inner City Press covered it, below.

On May 20, after Hayes pleaded guilty, he was sentenced - to two years probation, the first six months of which are home confinement with location monitoring. Inner City Press live tweeted it here and below.

That sent a precedent - now co-defendant Samuel Reed has asked for time served; on August 8, Dwyer also pleaded guilty: "Minute Entry for proceedings held before Judge John G. Koeltl: Change of Plea Hearing as to Gregory Dwyer held on 8/8/2022. Deft Dwyer present w/atty Jenna Dabbs. AUSA Nathan Rehn. Reporter Lisa Frankel. Deft Dwyer enters plea of guilty to Count 1 of indictment. Sentence date 11/10/2022 at 4:30pm. PSI ordered. Bail cont'd."

Defendants have asked to modify supervised release to be able to speak with Dwyer, citing social relationships before the offense conduct. On September 2, the prosecutors opposed loosening.

On September 6, Judge Koeltl said talk with Dwyer, about the case(s), should only be in the presence of counsel, citing deterrence: "MEMO ENDORSEMENT as to Arthur Hayes, Benjamin Delo, Samuel Reed on re: [398] LETTER by Arthur Hayes, Benjamin Delo, Samuel Reed addressed to Judge John G. Koeltl from James Joseph Benjamin, Jr. dated August 25, 2022 re: Standard Condition of Supervision Number 8. ENDORSEMENT: Standard condition 8 is modified to allow Messrs. Hayes, Delo, and Reed to communicate with Mr. Dwyer in connection with any pending or prospective litigation in the presence of counsel. There is no other reasons proffered for an exception to this otherwise reasonable condition of supervised release which is calculated to promote the reasonable objectives of supervised release including deterrence. So Ordered. (Signed by Judge John G. Koeltl on 9/5/2022)." Watch this site.

When co defendant Benjamin Delo came up for sentencing on June 15, Delo's lawyer urged no home confinement at all, just travel back to Hong Kong. And he got it - with thirty months probation the administration of which is unclear. Inner City Press live tweeted it here:

Delo's lawyer: Even home confinement is unnecessary. He is a British citizen, here on a tourist visa. He cooperated with the CFTC.

Defense: Ben was living in Hong Kong. He gave money to Oxford.  [There are more than a dozen suited persons here in the gallery]

Judge: Didn't he know there were US persons im the platform?

Defense: He didn't encourage it

Delo: This case hurts my philanthropy.  AUSA: Yes most messages we used were from Mr Hayes. But many were to Mr Delo. He knew.

Judge Koeltl: Guideline is 6 to 12 months. The US chose not to go for money laundering or fraud. The co-defenfant [Hayes], I sentenced to 6 months home confinement. But Delo has lived in Bermuda. So I sentence Delo to 30 months probation, no home confinement.

On July 13, Delo's counsel filed notice that he will submit a letter motion on or before August 1 to redact portions of the transcript.

On July 18, Delo's counsel emailed Judge Koetlt proposed redactions, the scope of which the public and press cannot see, arguing in a cover letter that the information "should be treated with caution." If so, why did his counsel say it in open court seeking a time served sentence?

Then this: "MEMO ENDORSEMENT as to Benjamin Delo (2) granting [376] MOTION to Redact [367] Transcript. ENDORSEMENT: APPLICATION GRANTED. SO ORDERED. (Signed by Judge John G. Koeltl on 7/19/2022)." Of course, it doesn't change what was said in open court.

Later in July co-defendant Reed was sentenced to 18 months probation, and travel anywhere: "JUDGMENT IN A CRIMINAL CASE as to Samuel Reed (3). THE DEFENDANT: pleaded guilty to count ONE OF THE INDICTMENT. ALL OPEN COUNTS are dismissed on the motion of the United States. PROBATION: Eighteen (18) months on Count One. --The Court will not impose the Special conditions suggested by the Probation Department at Pages 45 and 46 of the Presentence Report. --The defendant will be permitted domestic and international travel, and will be permitted to have contact with Messrs Hayes and Delo. -No fine is imposed, because the fine has already been paid. ASSESSMENT: $100.00. Special instructions regarding the payment of criminal monetary penalties: --The special assessment shall be due immediately. (Signed by Judge John G. Koeltl on 7/22/2022)."

Docketed on June 29, this: "CASH BAIL RETURNED as to Benjamin Delo as per [357] Order, Terminate Motions, dated 06/22/2022, from Judge John G. Koeltl, in the amount of $2,000,000.00, No. 03046969, Check Dated 06/28/2022, payable to SMITH VILLAZOR LLP."

On July 5, Delo's counsel wrote to Judge Koeltl asking that the judgment be amended to allow Delo to speak with Hayes and Reed.

And he got it: "MEMO ENDORSED granting [364] LETTER MOTION Request to Amend Judgment (to reflect that Standard Condition of Supervision Number 8 not apply to contact with Messrs, Hayes and Reed) as to Benjamin Delo (2)... ENDORSEMENT: APPLICATION GRANTED. SO ORDERED. (Signed by Judge John G. Koeltl on 7/5/22)."

In October, Reed's case has been transferred to the District of Massachusetts: "PROBATION FORM 22 (Transfer of Jurisdiction) as to (20-Cr-500-3) Samuel Reed. IT IS HEREBY ORDERED that pursuant to 18 U.S.C. 3605 the jurisdiction of the probationer or supervised releasee named above be transferred with the records of the Court to the United States District Court for the District of Massachusetts upon that Court's order of acceptance of jurisdiction. This Court hereby expressly consents that the period of probation or supervised release may be changed by the District Court to which this transfer is made without further inquiry of this Court.* (Signed by Judge John G. Koeltl on 10/19/2022) [*** NOTE: Awaiting acceptance by the District of Massachusetts. No documents sent. ***]" Watch this site.

The case is overall case is US v. Hayes, et al., 20-cr-500 (Koeltl)


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