The arrest of Sam Bankman-Fried yesterday was sudden and unexpected in light of Bankman-Fried’s plan to testify before Congress. As a criminal defense attorney, my reaction to the arrest last night remains unchanged: this is the first time that I can recall where prosecutors moved aggressively to stop a defendant from making self-incriminating statements. His testimony would have been entirely admissible and likely devastating at trial.
I previously wrote how Bankman-Fried was doing harm to his case by speaking in the media and to Congress. So why would the Justice Department move to stop the self-inflicted damage? You have a major target who was about to voluntarily testify for hours.
That is ordinarily a dream for prosecutors, but the Justice Department moved quickly to prevent that from happening. At that stage, Bankman-Fried was not charged or in custody. He was not protected by Miranda or other constitutional rules from self-incriminating statements.
Indeed, some of us had already warned that he was causing himself considerable damage in making such statements. This was a defendant with a large legal team facing possible criminal charges who seemed eager to speak about his actions and motivations. Most prosecutors would sit back, make popcorn, and watch this unfold.
The curious move led many to question whether the Biden Administration was eager to prevent questions on Bankman-Fried’s political contributions and associations. He was the second highest donor to Democratic causes in the last election cycle. His mother, a law professor at Stanford also heads a major Democratic campaign fund.
It is also possible that the Justice Department simply wanted to show the public that it was moving aggressively despite his close Democratic ties. It may have secured sufficient evidence (including possible cooperating witnesses) to satisfy the basis for charges and an extradition request. Moreover, the charges are likely to make some Democratic figures uncomfortable as this matter enters the criminal process.
Yet, that still does not explain why the Justice Department would not want to hear a full account from Bankman-Fried before effectively shutting him down as a criminal defendant. This is the first time that I can recall where the prosecutors, rather than defense counsel, moved effectively to muzzle a defendant.
Whatever the motivation, the timing of the charges effectively stopped the windfall of information coming from Bankman-Fried.
Bankman-Fried is accused of diverting customer funds from the start of his cryptocurrency exchange to support his hedge fund, Alameda Research. He is also accused of using his fraudulent practices to fund a lavish lifestyle, buy real estate, make venture investments, and fund Democratic causes. The range of charges includes wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and money laundering.
Notably, the eight counts include violating campaign finance laws, a charge that could prove embarrassing for some powerful political interests.
The charges are on top of charges announced earlier Tuesday by the Securities and Exchange Commission, which alleged Bankman-Fried defrauded investors and used proceeds from investors to buy real estate on behalf of himself and family.
The details of those transactions might have been voluntarily disclosed under intense cross examination if the Administration allowed him to appear as a witness. Moreover, Bankman-Fried was already causing himself considerable harm in media interviews.
Bankman-Fried’s parents have left Stanford and are reportedly in the Bahamas with their son. They could themselves face questions. His father, Joseph Bankman, is a tax professor and was a paid employee of his son’s company. His mother reportedly worked with him on some of these massive donations to Democrats.
The parents are reportedly now concerned that the legal costs in the case could “wipe them out.”
Bankman-Fried has admitted that only a few hours of efforts a day might have avoided these losses. It sounds like a “my bad” defense. That will not fly in court and building on that defense might have sealed his fate.
The question is why the Justice Department moved to stop Bankman-Fried as he worked so hard to make the criminal case against himself. He comes across badly in these past interviews like a trophy-laden millennial who believes that he just needs to play to win. It is not quite that easy in a criminal case.
If he testified, Bankman-Fried could not only have made any criminal defense more difficult but he could have potentially tripped the wire for allegedly false or misleading statements under oath. It was a target-rich environment for Congress — and a potential bonanza for prosecutors.
Bankman-Fried was in a dangerous free fall. Despite his legal team, Bankman-Fried seemed to be praying for someone to “stop me before I speak again.” Someone just did.
The Biden Administration’s move seemed to bring a more positive meaning to Ronald Reagan’s “top 9 most terrifying words in the English Language”: “I’m from the government, and I’m here to help.”
He’ll get a slap on the wrist and when he gets out he’ll become a celebrated host on The View where he will interview John Brennan. Brennen will say that the charges against Bankman-Fried are just Russian disinformation. All the ladies on the view will giggle in agreement with bobble heads nodding.
SBF made his investors “donors” to democratic/liberal candidates. He just neglected to tell them.
Apparently there will be more donations made under other names revealed which probably means the $40MM is the
minimal amount of political influence/defense services, that SBF purchased.
Send the FBI to raid the DOJ before they destroy the.. uh, “burden” of evidence.
You only send the FBI to cover up the “burden of evidence”.
Wait for it. Bankman-Fried found Epsteined in prison.
This article has much to do with accountability. Accountability is a moot point when dealing with Democrats. My money is on this guy being celebrated as a folk hero to the Left and continuing to enjoy an unearned and lavish lifestyle wherever that may be. As a side point, embarrassment is the worst thing that can happen to a money-grabbing politician? Oh, the pain of it all!
A Democrat “hero”… not even in Singapore, Indonesia, Russia, perhaps China. We live in interesting times.
You’re being kind to the system. There are obviously far more corrupt people behind the curtain that don’t want exposed in a questioning environment they can’t control.
The most corrupt DOJ in US history, working in the most corrupt administration ever assembled, controlled by the most corrupt political party we’ve ever had. A corruption trifecta.
For someone who is a lawyer his knowledge of the law is off. The protection against self incrimination always exists. You don’t have to be arrested or under investigation for it to apply. Before he was arrested he could have and probably would have declined to answer questions that would cause him harm.
Sammy: you are correct: Turley is paid to shovel red meat, and he certainly DOES know that no matter what the circumstances, a person’s right to plead the fifith is always there–you don’t have to be charged, or under indictment or even a suspect. Turley is also playing mind-reader here, by implying motivations all over the place in an effort to attack the Biden DOJ, but, as usual, he’s just carrying out another Fox assignmen, even if he has to make up facts and law in order to do it.
Seeing as this kid does not know when to shut up, or as the good professor puts it,
“. . . Bankman-Fried seemed to be praying for someone to “stop me before I speak again.”
I foresee a Epstine like incident in SBF future.
And everyone please do note the second largest donor part.
He was arrested to shut him up. He was paying off the democrats because it was a family tradition. The democrats took the money for the same reason.
He will never leave Biden’s gulag alive. The Just-Us department will see to that.
DOJ – Saving Dims Arses (by whatever means necessary) Since 2008!
Meanwhile Gary Gensler former Goldman and youngest partner….former colleagues are FTX General Counsel and father of SBF girl friend Caroline Ellison was Gary’s colleague at MIT.
Don’t forget SBF mommy ran Mind the GAP…the TOP Dark Money outfit for the Democrats!
Hey did you hear…the DOJ is 100% corrupt just like all the other 3 letter DC agencies!
Cut 50% of Fed Spending and move 75% of DC Fed Government to the heartland. DC is lost!
Is there any doubt that the Democrat Party is totally corrupt.
A millennial aided by mommy, daddy and the Democrat Party. At least he wasn’t sleeping in their basement.
I don’t care about the Democrat Party…it is OUR 100% corrupt SEC, DOJ, FBI, IRS, CDC, etc
cut 50% of fed Spending and move 75% of DC Fed Gov. to the Heartland. DC is LOST
Only 50% 🙂
Similar tactic in silencing Julian Assange and his apparent Seth Rich connection.
Most law enforcement professionals, I know many, will tell you they don’t believe in coincidences. Not a lawyer, but something is hinky here. Don’t know if Madoff made political contributions in kind but perceived offenses are certainly similar.
I guess we shall see.
Turley may be correct – as he often is – but there also may be another side to this peculiar story. Sam Bankman-Fried no doubt will be called before Congress to testify and because he is under indictment at the SDNY, he will decline to testify based on 5th Amendment protections. Congress can then ask the Department of Justice to grant him use immunity. This could create a showdown between a DOJ that wants to prosecute Sam Bankman-Fried and a Congress that wants to hear what he has to say. Remember, there are scores of others that were involved with FTX and Sam Bankman-Fried, including his mother who served apparently as an attorney with the company. They might be witnesses for the government or for the defendant but it unlikely they will able to duck a congressional subpoena and they indeed may know as much as Sam Bankman-Fried. The timeing of the indictment and extradition request is somewhat questionable but the final outcome should be the same. One thing is for certain: whatever we know today is just the tip of a very large iceberg. Sam Bankman-Fried does not strike me as a financial wizard but a quirky party animal. To assemble an enterprise like FTX required the cunning and expertise far and away greater than that on display by this John Baluchi wannabe. A little more digging and we’re sure to find the keeper of the crypt!
I do not beleive Congress needs DOJ’s permission to give SBF immunity.
The house is going to have to decide – as they sort of did in Iran-Contra whether the information they want is important enough to force it from SBF NOW, At risk of weakening prosecutions.
I would note this is true of LOTS of things and will be important in 2023.
The DOJ and FBI constantly repeat “ongoing investigations” as a mantra to block congressional inquiry.
That does NOT exist as an actual priviledge. It is deference congress chooses to give.
The house in 2023 can and should say “Answer anyway”
I do not think it is going to be hard for DOJ to get SBF if they actually want to,
and frankly I think forcing him to talk to congress will make him EASIER to prosecute.
What the House needs to know from SBF and what they should be after in congressional hearings is his connections to politicians
Bringing that to light ends his usefulness to them and their protection.
The details of how he pulled off this SCAM can be left to DOJ to sort out.
I would note that the FTX mess is painted as a failure of Crypto.
It is actually a failure of Government efforts to control Crypto.
The Government particularly the US government wants exchanges likje FTX, They can regulate those exchanges and they can use them to neuter some of the important facets of Crypto that are part of its appeal – its immunity to government control.
FTX is essentially the failure of trying to force banks onto a currency system that was designed not to need banks.
SURPRISE! Garland moves swiftly to protect those Democrats skimming the cream off the crypto scam.
Yep, the Democrat damage control machine is being preemptive, so some statement coaching can take place in exchange for being pardoned by Biden in two years.
Why would a person ever read fiction? A fiction author in their wildest imagination could not make this stuff up.
“The heart is deceitful above all things and desperately wicked: who can know it?”