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On FTX Bankman Fried October Trial Reaffirmed As Zoom and Pen Registers Mulled

By Matthew Russell Lee, Patreon Maxwell book

SDNY COURTHOUSE, March 10 – Sam Bankman-Fried of FTX was indicted in the U.S. District Court for the Southern District of New York, leading to his arrest in the Bahamas on December 12, and extradition to the US on December 21.

On February 28, with Bankman-Fried free on bond, FTX's Nishad Singh pleaded guilty to six criminal charges. Inner City Press put the charging document on its DocumentCloud here.

On March 1, Bankman-Fried's lawyers and the SDNY prosecutors - together - proposed to Judge Kaplan two candidates as his technical expert: Edward Stroz ($695/hr) and Michael McGowan ($650/hr). We'll have more on this - for now, more on Substack here

On March 3, the US Attorney's Office which chose to give Bankman-Fried freedom on bond then declined to seek remand proposed to Judge Kaplan conditions: "The parties agree that the following websites would be whitelisted through the law firm VPN: the Relativity database hosted by defense counsel for purposes of reviewing discovery; Google Drive and Google Docs, which defense counsel uses with clients to share information; Gmail, which will be accessed through a single email address provided to the Court and the Government."Full letter on Patreon here.

On March 8, Bankman-Fried's lawyer went further on VPN use, saying the US has no objection, and adding that "We also understand from the Government that we have not yet received a substantial portion of the discovery, including, among other things, the search warrant returns from thirty (30) different Google accounts and the contents of at least four different electronic devices, including an iPhone belonging to Caroline Ellison, a laptop computer belonging to Zixiao “Gary” Wang, and laptop computers belonging to two other former FTX/Alameda employees." Full letter on Patreon here. Who are these other two?

On March 10, Judge Kaplan held his proceeding. Inner City Press was there and live tweeted, thread here:

OK - now US v Bankman-Fried case before   Judge Kaplan on conditions of release, VPN, Python, paid consultants- & 2 laptops of unnamed FTX employees? 

All rise!

Judge Kaplan: I have your letters. Let me hear about discovery. Assistant US Attorney Nick Roos: In January we produced all the search warrants and affidavits that would be important for suppression motions. And 2 million documents from 3d parties.

 Judge Kaplan: Is that production in January the complete production as of the date you made it? AUSA Roos: Of subpoena returns, search warrants and 3d party. Some other material was not produced, from electronic devices. There is a caveat on everything

 AUSA Roos: There are Google accounts. The info coming in to the government is constant. For each production, we have to freeze a moment in time, and tell the contractor to Bates stamps 1 million pages. Judge Kaplan: Let's call it the "as of that time" date

 AUSA: The government produced some devices. But there are 5 devices left. Three were obtained on consent. We will produce those, minus privileged material, which we don't be producing to Mister Bankman-Fried.

 [Note: defenders here are rarely referred to this way]

AUSA Roos: One of the laptops we seized, it is full of gibberish. That's device D. E is a cell phone. The volume is substantial. We could produce it in March. 

Judge Kaplan: So it's not as bad as I feared from the letter. Let's talk about the Google returns

Judge Kaplan: What a good idea that was... I remember the days when no one had a case with more than four defendants, because you couldn't make more carbon copies than that. I'm dating myself. Proceed. AUSA Roos: 3 of the 4 have gone through the privilege review

AUSA Roos: For example, we search for Mister Everdell's name, for privilege. The return on the warrant yielded two million documents, now subject to a responsiveness review. We're making a production next week of all emails in his accounts.

 AUSA Roos: Later he'll give him the material from the other accounts that don't belong to him, even though I don't think he has standing. Judge Kaplan: Is Google done producing? AUSA Roos: They think they're done.

AUSA Roos: There are four defendants in this case. So production will continue past April, but will be shrinking. Judge Kaplan: Are there still subpoenas outstanding?

AUSA Roos: Yes. Directed at unindicted co-conspirators of the defendant, we'd have a Rule 16 duty SBF's lawyer Cohen: Sounds like we're going to get a lot of material in March. And April. So we think the motion schedule needs to be adjusted.  We still want an October trial date.

Judge Kaplan: I'm happy the sides are working amicably. Now, the bail conditions

Judge Kaplan: I looked at the proposal of March 3 and I come to a broad conclusion and a list of questions. The broad conclusion, and it's provisional, is that even if we do all of these things, there is no 100% guarantee possible, given the defendant's liberty

Judge Kaplan: I am prepared to allow VPN for now, but I need an order to sign. SBF's lawyer: We'll prepare something. Judge Kaplan: It's like we're negotiating a trust indenture here [Lawyers laugh]

Judge Kaplan:  I'll docket this. Have a good weekend.

More with analysis on Substack here

Bankman-Fried was released on $250 million bond - and reappeared on January 3, see below - with the requirement of co-signers.

But he wanted them secret: "LETTER MOTION addressed to Judge Lewis A. Kaplan from Mark S. Cohen dated January 3, 2023 re: Request to Redact Names and Identifying Information for Certain Bail Sureties." Six page letter on Patreon here -
Inner City Press nearly immediately opposed, here. That was Docket Number 31. And it ultimately prevailed, see below.

On February 23, SBF was hit with new charges in a superseding indictment: bank fraud and operating an unlicensed money transmitter  “falsely represented to a financial institution that the [North Dimension] account would be used for trading and market making,” when in fact it was to be used to receive and transmit customer funds.  SBF et al. “agreed to and did make corporate contributions to candidates and committees in the Southern District of New York that were reported in the name of another person." Inner City Press quickly published the superseder here.

On the evening of February 23, the US Attorney's Office wrote to Judge Kaplan about the two new charges, stating that "The Government respectfully suggests that the Court arraign the defendant on the S3 Indictment at the next court appearance that arises, or at the scheduled oral argument on May 18, 2023, whichever comes first. The Government requests that the Court exclude time under the Speedy Trial Act to October 2, 2023, the first day of trial." Letter on Patreon here.

Back on January 30, Judge Kaplan granted the motion to unseal - but stayed the order until February 7 to allow for an appeal. Inner City Press (Matthew Russell Lee, intervenor pro se) unloaded the order to DocumentCloud here

At 2 pm on February 7, Bankman-Fried's lawyers filed notice of their appeal to the Second Circuit, to (try to) keep the names secret.

But on February 15, Judge Kramer ordered unsealing: "ORDER as to Samuel Bankman-Fried, Zixiao (Gary) Wang, Caroline Ellison. On January 30, 2023, the Court issued an order granting the motions of several news organizations to unseal the names of defendant's non-parental bail sureties. (Dkt 57) Given the novelty of the question presented and the likelihood of appeal, the Court stayed the order "until 5 p.m. on February 7, 2023 and, if a notice of appeal from th[at] order [was] filed by then, until February 14, 2023 at 5 p.m. in order to permit an application for a further stay to be made to the Court of Appeals should any adversely affected party wish to file one." (Dkt 57, at 12.) On February 7, 2023, Defendant timely filed a notice of appeal from the January 30, 2023 Order. As of today, however, no application for a further stay has been made to the Court of Appeals. Accordingly, the Clerk shall file on the unrestricted public record complete copies of the redacted bonds previously docketed as Dkt 55 and 56. SO ORDERED. (Signed by Judge Lewis A. Kaplan on 2/15/2023)."

  Inner City Press published that - and then the two names: Larry Kramer, former dean of Stanford Law, and Andreas Paepcke of Stanford InfoLab, photos here and here. Watch this site.

The case is US v. Bankman-Fried, et al., 22-cr-673 (Kaplan) 


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