Jurors begin deliberations in Sam Bankman-Fried criminal trial

  • Jury deliberations have begun in the criminal fraud trial of Sam Bankman-Fried.
  • 12 jurors will decide whether the FTX founder is guilty of seven criminal charges related to the explosion of his crypto empire, including wire fraud, securities fraud and money laundering.
  • Bankman-Fried, who has pleaded not guilty on all counts, faces more than 100 years in prison if convicted.

Accused FTX founder Sam Bankman-Fried arrives at a US court in New York City on July 26, 2023.

Amr Alfiqi | Reuters

Twelve jurors began deliberating the fate of FTX founder Sam Bankman-Fried in a lower Manhattan courtroom following a month of testimony from nearly 20 witnesses.

At 3:15 p.m. Thursday, the case was handed over to the jury after U.S. District Judge Louis Kaplan read aloud 60 pages worth of instructions. A verdict is expected as early as Thursday afternoon, and Judge Kaplan previously ordered the jury to offer free pizza and Uber rides home until 8:15 p.m.

Bankman-Fried, who launched digital asset exchange FTX in 2019 and sister hedge fund Alameda Research two years ago, was indicted on seven counts including wire fraud, securities fraud and money laundering related to the implosion of his crypto empire late last year. .

He faces up to 100 years in prison if convicted. The 31-year-old graduate of the Massachusetts Institute of Technology and the son of two Stanford law scholars has pleaded not guilty to all charges.

For Bankman-Fried to be found guilty, the jury must unanimously conclude beyond a reasonable doubt that the acclaimed crypto genius had intent to defraud investors and customers.

The trial, which was initially expected to run through the Thanksgiving holiday, moved quickly. The government reduced its witness list and eventually did not bring a rebuttal case after the defense rested. While much of the argument relied on the defendant’s sworn testimony, the defense called only three witnesses to the stand.

See also  Trump called Fox News' Chiron Biden a 'wannabe dictator' during the speech

Both sides have moved more quickly than expected on direct and cross-examination.

Judge Kaplan encouraged a quick timeline, keeping jurors until 6:30 p.m. Wednesday to complete closing arguments. It was not clear how long the jury would deliberate, but the judge — who insisted he was not rushing to a decision — said he was willing to stay until 8:15 p.m. Thursday and that the government would pay the jurors dinner and pay for their trip home.

Jurors hear testimony during the fraud trial of Sam Bankman-Fried related to the collapse of bankrupt cryptocurrency exchange FTX in this courtroom on October 6, 2023, in federal court in New York City.

Jane Rosenberg | Reuters

Bankman-Fried’s defense attorney, Mark Cohen, made a final plea for his client on Wednesday, arguing that the defendant was not guilty of all counts because the FTX founder acted in good faith and without criminal intent. working.

“Every movie needs a villain,” Cohen said of the lawsuit against Bankman-Fried, saying the government misrepresented her as a “monster,” “evil” and “criminal mastermind.”

Cohen said the case against his client was built on the false premise that FTX was a fraudulent company established from its “very early days” to deliberately steal client funds.

FTX’s lack of a risk management system or chief risk officer reflects poor system controls, not bad business decisions, Cohen said.

Cohen told the jury that if members of Bankman-Fried’s inner circle truly thought something sinister was going on, they had options, including resigning, leaving the Bahamas or “blowing the whistle.” None of them did, he said.

See also  Day 3 of Trump New York hush money trial

Bankman-Fried was a witness herself, and much of her testimony was a distraction, Renato Mariotti, a former prosecutor in the U.S. Department of Justice’s securities and commodities fraud division, told CNBC earlier this week. As an example, he cited his ex-girlfriend and Alameda’s former president, Carolyn Ellison, who blamed Bankman-Fried for failing to hedge properly.

Mariotti, who is now on trial, said his testimony “was meant to minimize his role, as he often reminded me that others were involved, that he had a lot on his plate, that he was young, or that he wasn’t a programmer.” Brian Cave is a partner in Chicago with Leighton Paisner.

Carolyn Ellison, former CEO of Alameda Research LLC, leaves Manhattan federal court after testifying during the trial of FTX CEO Sam Bankman-Fried on October 10, 2023 in New York City.

Michael M. Santiago | Good pictures

During the government’s closing arguments, prosecutors reminded jurors of the mountain of evidence provided by key witnesses.

“The defendant lied in order to get the money, which he spent,” Assistant U.S. Attorney Nicholas Rouse told the court.

Roos said $10 billion in client money sitting on FTX’s crypto exchange was missing, some of which was going to pay for real estate, investments, loan repayments and political donations.

“The pyramid of deceit was built by the defendant,” Rouse said. “It eventually collapsed.”

Critical to FTX’s failure was the use of customer funds to cover losses on Alameda’s books following last year’s collapse in crypto prices. Rouse said Bankman-Fried Alameda offered special privileges, allowing the hedge fund to receive client money. Rouse said he knew it was wrong and that’s why he kept it a secret.

See also  Scottie Scheffler starts Saturday with a big lead

Roos brought testimony from three direct witnesses who said they spoke with Bankman-Fried about the main issue — a large hole in the balance sheet.

Bankman-Fried “had the arrogance to think she could get away with it,” Rouse said.

Bankman-Fried knew Alameda’s net worth was $2.7 billion, Rouse said, but wanted to make another $3 billion in venture investments. The only way to do that is with FTX customer funds, he said.

In addition, Rouse told the jury, $100 million of client money went toward real estate expenses, including $30 million for a penthouse in the Bahamas and $16 million for his parents’ home.

Rouse called Bankman-Fried a “celebrity chaser,” referring to the Super Bowl photo with Katy Perry and others.

In closing, the prosecutor reminded the court that Bankman-Fried had shifted the losses to Alameda and that FTX’s insurance fund had made up the numbers. Add it all up, Rouse said, and it eliminates the defense’s main argument that Bankman-Fried acted in good faith and believed everything would work out.

“This is fraud on a massive scale,” he said.

See: Sam Bankman-Fried was set to testify

Leave a Reply

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