Facing Jail for Alleged Witness Tampering and Intimidation

On Aug 13, 2023

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Sam Bankman-Fried, the founder of FTX, has been placed in jail as he awaits trial for fraud charges. This decision came on Friday when U.S. District Judge Lewis Kaplan decided that his release of intimate writings from a significant cooperator in the prosecution could be perceived as an attempt to tamper with the jury and intimidate the witness.

These writings, penned by Caroline Ellison, Bankman-Fried’s former girlfriend and the CEO of Alameda Research, detailed her emotional struggles after the collapse of her romantic relationship with him. They were featured in a July article in the New York Times and painted her in a less-than-flattering light. Kaplan characterized these writings as “extremely personal and intimate” and concluded that their leak was, at least partially, a way for Bankman-Fried to harass Ellison and manipulate her testimony.

🚨BREAKING: FTX’s Sam Bankman-Fried TO BE JAILED | Bail Revoked
SBF is being incarcerated for tampering with at least 2 witnesses.
He will be in jail prior to his October trial, facing a range of fraud and conspiracy charges.
He may have access to a laptop with an internet… pic.twitter.com/1sj8fMm8cO
— Mario Nawfal (@MarioNawfal) August 11, 2023

Previously, Bankman-Fried had been under home detention at his parents’ house in Palo Alto, California, and had been granted bail at $250 million. The trial is set to begin in October and is anticipated to last for at least one month.

In the past, Bankman-Fried held the title of Crypto King and was confined to house arrest. However, after his courtroom ruling, U.S. marshals immediately took him into custody. He handed over his jacket, tie, and shoelaces to his defense attorney before leaving the courtroom. His legal team’s request to suspend the ruling pending appeal was denied, and they did not comment as they exited the court.

Deceit and Theft from FTX Customers: Accusations

Prosecutors accused Bankman-Fried, 31, of deceit and theft from FTX customers. Before its downfall in November, FTX was one of the world’s largest cryptocurrency exchanges. Bankman-Fried allegedly wasted funds supporting Alameda’s risky trades, political contributions, and an opulent lifestyle. FTX went bankrupt after Alameda borrowed $10 billion from customer funds deposited at FTX and lost the money in high-risk trading.

Ellison pled guilty in December to charges connected to FTX’s downfall. She’s agreed to testify against Bankman-Fried during his trial, aiming for a more lenient sentence. She’s considered an essential witness for the prosecutors.

While Bankman-Fried’s lawyers acknowledged that he shared Ellison’s writings with the Times, they argued that he had the right to do so. Mark Cohen, his attorney, also stated that the prosecutors lacked solid evidence that proved intent to intimidate Ellison.

After the writings surfaced in the Times, a gag order was imposed on Bankman-Fried, barring him from speaking to the media. Prosecutors wanted him jailed, stating that his actions amounted to witness intimidation and jury tampering. During the hearing, the judge also found that Bankman-Fried’s contact with another prosecution witness was an attempt to influence them.

The U.S. attorneys wrote that:

The defendant’s actions—sharing personal writings of Caroline Ellison’s with a New York Times reporter—implicate the core concern of Rule 23.1 that disseminating material related to the “testimony or credibility of prospective witnesses” presumptively involves a substantial likelihood or prejudice to a fair trial and the due administration of justice.

Rule 23.1(a) explicitly forbids lawyers and their agents from releasing non-public information about a case if it is likely to provoke an interference with a fair trial.

Bankman-Fried had a strong presence in the media, logging over 1,000 calls with journalists over several months and maintaining frequent contact with author Michael Lewis. Lewis is currently penning a book about the case.

Not a Five Star Facility

The location where Bankman-Fried would be held pending trial was not immediately clear. The possibility of him staying in Putnam County jail in upstate New York for better access to trial materials via computer was discussed, but Judge Kaplan believed similar access would be provided at the federal jail in Brooklyn. The issue remained unresolved, with Kaplan commenting that the Brooklyn facility is “not on anybody’s list of five-star facilities.”

In conclusion, the case against Bankman-Fried is complex and multi-faceted, involving charges of fraud, witness tampering, and obstruction of justice. His fall from grace in the crypto world serves as a stark reminder of the thin line between legal conduct and criminal activity in the fast-paced world of finance and technology. The outcome of the trial is awaited with keen interest by both the legal community and the public at large.

Facing Jail for Alleged Witness Tampering and Intimidation

Deceit and Theft from FTX Customers: Accusations

Not a Five Star Facility

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