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The Courts Crime

Sam Bankman-Fried Files Appeal For Fraud Conviction (cointelegraph.com) 58

Posted by BeauHD from the latest-developments dept.
Former FTX CEO Sam Bankman-Fried's legal team has filed an appeal challenging his conviction on seven felony counts and his 25-year prison sentence. They argue that he was not presumed innocent, that the jury received incomplete information about FTX user funds, and that the prosecution's narrative was biased. CoinTelegraph reports: In a Sept. 13 filing in the United States Court of Appeals for the Second Circuit, SBF's lawyers filed a 102-page brief claiming that the former FTX CEO was "never presumed innocent," subject to scrutiny that allegedly affected prosecutors, the presiding judge, and treatment by the media. Bankman-Fried's legal team announced in April -- a few weeks after a federal judge sentenced him to 25 years in prison -- that they intended to appeal. According to the appeal, SBF's lawyers alleged the jury was "only allowed to see half the picture" with FTX user funds, claiming prosecutors had "presented a false narrative" that the money was permanently lost and Bankman-Fried intentionally caused that loss. They also claimed that counsel for the FTX debtors worked with the US government in a way that was above and beyond "cooperation," providing information allegedly as an "arm of the prosecution."

"From day one, the prevailing narrative -- initially spun by the lawyers who took over FTX, quickly adopted by their contacts at the US Attorney's Office -- was that Bankman-Fried had stolen billions of dollars of customer funds, driven FTX to insolvency, and caused billions in losses," said the appeal. "Now, nearly two years later, a very different picture is emerging -- one confirming FTX was never insolvent, and in fact had assets worth billions to repay its customers. But the jury at Bankman-Fried's trial never got to see that picture." The legal team requested the appellate court grant SBF a new trial with a different judge. It's unclear whether the Second Circuit could rule to affirm Bankman-Fried's conviction in the US District Court for the Southern District of New York or reverse the decision and set the groundwork for a new trial.
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Sam Bankman-Fried Files Appeal For Fraud Conviction More

Sam Bankman-Fried Files Appeal For Fraud Conviction

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  • I'm confused (Score:4, Insightful)

    by AvitarX ( 172628 ) <me@@@brandywinehundred...org> on Friday September 13, 2024 @06:53PM (#64786611) Journal

    Isn't a prosecutor supposed to be biased?

    • Yes. He only is to be presumed innocent by the jury. He probably has MAGA lawyers.

    • Yes, the prosecutor is supposed to be biased, you don't want a prosecutor prosecuting people he/she thinks are innocent.

      However, the prosecutor is still required to turn over ALL evidence to the defense counsel, even that which might cast doubt on the defendant's guilt. If the prosecutor screws up that is usually where it happens. They withhold something that would weaken their case or something they think is irrelevant but actually would be useful to the defense.

    • No, but that's because prosecutorial bias has a different definition in the legal sense than in the sense of just regular old "bias".

      It relates to Prosecutorial Discretion [wikipedia.org]. It is the prosecutor that charges someone with a crime, and they generally have wide latitude. However they do have certain requirements to make a charge, such as they have to have some sort of evidence to support the charge. Usually prosecutorial bias comes in when the evidence is flimsy, but they're going to charge someone becaus

      • Re: (Score:2)

        by AvitarX ( 172628 )

        Thank you for that explanation.

        Seems like a hail Mary post conviction, but it also makes sense as to all of the things being claimed. Essentially trying to argue a chain of legal bias from start to finish.

  • nice try though (Score:4, Insightful)

    by argStyopa ( 232550 ) on Friday September 13, 2024 @07:03PM (#64786619) Journal

    "...FTX was never insolvent, and in fact had assets worth billions to repay its customers."

    Of course, CRIME part wasn't about it being out of money.
    The crime part was having a private backdoor into invested funds to use as your own slush / political donation fund.

    The fact that he hadn't actually bankrupted the fund is fairly immaterial.

    • Actually it does apply. SBF had charges of Fraud, Conspiracy to commit fraud, and money laundering.

      If FTX wasn't as insolvent as originally thought and it actually had capital to cover it's debts to a greater extent than was portrayed, then the fraud charges come into question, which could lessen his sentence. At least that appears to be the strategy for his lawyers.

      • Re: (Score:1)

        by Anonymous Coward
        FTX was insolvent though. The argument isn't that was healthy, they are basically using today's bitcoin price to say the assets now let them pay everyone back (mind you it is pay them back the low bitcoin price from back then, they aren't returning the bitcoin on equivalent value of what those assets are worth now). You don't get to use today's value of assets to claim look we could now afford to pay back people what they were owed 2 years ago and claim it as proof of no foul.
      • FTX was insolvent, they are playing with words and calculators to try and say the sky is red. If you use their method, Lehman brothers was also healthy and not insolvent.
        • Hey I'm not agreeing with it, I'm just describing their strategy.

          Frankly, if I was charged with or convicted of a crime, I'd want my lawyers trying their hardest to get the best deal for me too. You can't blame them for making the argument; they're not making a moral argument. They're trying to reduce his sentence using every possible method they can think of.

        • If the Fed had bailed out Lehman's would 2008 have looked like the SVB episode, i.e. not recession-causing?

    • While I don't think Sam is innocent, the takeover by a new CEO who refused to talk to Sam suggests this new CEO was not interested in fixing the issue or caring to return customers funds

  • This is not news (Score:5, Informative)

    by Required Snark ( 1702878 ) on Friday September 13, 2024 @07:05PM (#64786625)
    Appeals are completely normal. In white collar crime they are so common that it might as well be automatic.

    If he didn't appeal that would be news. Heck, he might be able to sue his lawyers or make the appeal about incompetent legal representation.

    Move on, there's nothing to see here.

  • What the hell else is he gonna do? (Score:4, Informative)

    by MachineShedFred ( 621896 ) on Friday September 13, 2024 @07:18PM (#64786645) Journal

    He's in the pokey for 25 years, and there's no federal parole so he's going to eat the full meal. What the hell else would you expect other than to see if he can get those years back by launching appeals to any court that will listen to the petition?

    This is what long-term incarcerated people do.

  • There is something weird about his conviction... (Score:4, Interesting)

    by PubJeezy ( 10299395 ) on Friday September 13, 2024 @07:33PM (#64786671)
    There is something weird about his conviction. Two of the biggest crypto platforms in the world both blew up in a flurry of criminality which ended up with federal charges being filled around the same time, FTX and Binance.

    The FTX case was entirely about embezzlement, non-violent theft. Sam Bankman-Fried ripped off his investors. He was sentenced to 25 years.

    The Binance case was an entirely different beast. Their founder wasn't stealing money, he was laundering it for violent, transnational criminal organizations. They found evidence that Binance deliberately helped members of drug cartels, North Korean hackers and sanctioned Russian mobsters circumvent local laws to access their platform. Changpeng Zhao, the founder of Binance, made himself a part of global supply chains for violence and extortion. And this isn't my opinion, this is the DOJ's opinion (https://www.justice.gov/opa/pr/binance-and-ceo-plead-guilty-federal-charges-4b-resolution). CZ was offered a plea deal and received a 4 month sentence.

    The discrepancy between those two sentences makes SBF's sentence see cruel and unusual. It's my personal opinion that SBF's prosecution is everything wrong with our justice system. The media has been reporting that FTX's customers will get all their money back so what did SBF really do that was so bad to warrant a 25 year sentence? He made Sequoia and all the other brain-dead tech VC's look real stupid. They all poured money into a fake business with no product. Sequoia used to bring us companies like Apple and Oracle but their recent history includes FTX and Bitclout, two companies that ended in federal indictments. But these companies didn't "break bad", they never had a product. They were obviously committing fraud at the time that Sequoia invested in them.

    As far as I can tell SBF's prosecution was done for the benefit of Sequoia Capital. They need the public to believe that SBF is some kind of outlying criminal mastermind so they can maintain plausible deniability of the underlying criminality of their investments in crypto.

    • Re:There is something weird about his conviction.. (Score:4, Insightful)

      by hdyoung ( 5182939 ) on Friday September 13, 2024 @09:41PM (#64786823)
      I’m gonna guess that the Binance guy played ball. He gave up everything the justice department and the FBI and CIA wanted. Answered all their questions. Spilled the beans on all the hidden accounts, shady deals, secret passwords and criminal buddies. And then agreed to admit guilt in public and take his lumps. In exchange for a much lighter sentence.

      SBF played the “Trump card”: admit nothing, give nothing, fight tooth and nail every step of the way, and generally be as unhelpful and uncooporative as possible. And the justice dept was like “welp, we’ll just return the favor. Make life hard for us? We’ll hit you with everything we got”.

      That’s an all-or-nothing strategy. If you get off, it’s completely scott free. If you lose, you take the punch straight in the teeth. In a way, that’s totally in character for cryptobros. Extreme risk taking.

      That’s why he’s in the slammer for a full 25 years. And he’s unlikely to get out early. When you decide to play the full “i does whats I wants and I gets my day in courts” strategy, you’d better be sure you’re gonna win, cause if you lose your proverbial head gets put on a pike over the moat as an example to others.

      • I’m gonna guess that the Binance guy played ball. He gave up everything the justice department and the FBI and CIA wanted. Answered all their questions. Spilled the beans on all the hidden accounts, shady deals, secret passwords and criminal buddies. And then agreed to admit guilt in public and take his lumps. In exchange for a much lighter sentence.

        SBF played the “Trump card”: admit nothing, give nothing, fight tooth and nail every step of the way, and generally be as unhelpful and uncooporative as possible. And the justice dept was like “welp, we’ll just return the favor. Make life hard for us? We’ll hit you with everything we got”.

        That’s an all-or-nothing strategy. If you get off, it’s completely scott free. If you lose, you take the punch straight in the teeth. In a way, that’s totally in character for cryptobros. Extreme risk taking.

        That’s why he’s in the slammer for a full 25 years. And he’s unlikely to get out early. When you decide to play the full “i does whats I wants and I gets my day in courts” strategy, you’d better be sure you’re gonna win, cause if you lose your proverbial head gets put on a pike over the moat as an example to others.

        I agree, and I can see the reasoning, but I also think it's kinda messed up. The length of SBF's imprisonment changed by decades, not because of anything to do with his conduct, but because he took a dumb approach to the trial.

        • Hence, the "carrot" of playing ball with prosecutors. When they have you by the short hairs, it's wise to employ some humility - if not pragmatism - and give them what they want. Be a hard ass, and you're held out as the example of what they can do with their "stick." He had options; he must've known what was on the table. He still said, "Go fk yourselves." I don't feel bad for him.

    • Re: (Score:2)

      by kick6 ( 1081615 )
      I'd argue the exact opposite. I'd rather a money launderer got a light sentence than someone playing with regular people's money as his own.

    • Absolutely nothing weird about this. CZ likely was not as universally stupid and full of arrogant hubris as Bank-Fraud. CZ very likely had tons of infos and material to bargain a good deal with, while Sam Fraud only had his arrogant and loud mouth going for him and he directly defrauded and harmed the public.

  • They were insolvent, the fact the assets later became worth more and able to pay out customers does not negate the insolvent at time of charges or illegal use of the funds and plundering it for personal gain.

  • false (Score:2, Informative)

    by Anonymous Coward

    "and in fact had assets worth billions to repay its customers"

    this is simply lawyer weasel words, people that lost all their bitcoin are not getting their bitcoin, they are getting the low value bitcoin was at when it went bust, so they are losing 2/3rds of their investment.

    • Re: (Score:1)

      by guruevi ( 827432 )

      How did they "lose" the Bitcoin? Just give the Bitcoin back in Bitcoin and you'll have more money today than you did before the silent depression started. The problem in these cases is that the prosecutor expressed the value of Bitcoin in dollar at a time the market for dollars had collapsed internationally (because the dollar has no true value such as gold backing it). Remember we have had 40%+ inflation over the last 3.5 years.

    • If SBF were in charge, would they have their bitcoin now instead of a lower value due to the new CEO selling it too quickly?

  • If they can suicide Epstein and McAffee, how is it that this duechebag is still breathing?

    • Re: (Score:1)

      by Coius ( 743781 )

      Maybe he didn't diddle little kids. That's how they end up suicided. And the guards don't know why or how...

    • McAffee almost certainly suicided himself, it was a miracle he managed to live as long as he did given his lifestyle, Epstein had too many secrets, whether he had help or not it is hard to say, but likely he had many people that didn't want him to talk. No one could give a shit about SBF, he doesn't appear to have any great secrets that need to be hidden so why do anything to him when letting him rot in jail is a fitting punishment.

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