The Justice Department Faces Questions After Effectively Preventing Bankman-Fried from Testifying in Congress

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.”


135 thoughts on “The Justice Department Faces Questions After Effectively Preventing Bankman-Fried from Testifying in Congress”

  1. Just so I understand this… people over the last five or six years gave some twenty something getting it on big time in the Bahamas real American money worth ??? in return for access to a web site that said they had a gazillion cryptos worth ???? … and only now they realize they were swindled

  2. If someone from the DOJ were to walk my dog around the block, I would expect the dog to be at least 3 years older when they got back. Good luck with this prosecution.

  3. Just curious, is Bankman-Fried related to Fetterman? One ham sandwich is going to jail, the other is going to Washington.

  4. There are certain things that the Invisible Government (or the Deep State, to use a modern term) will simply not permit the public to ever see or hear.

    Among these many things are . . .

    –Lee Harvey Oswald’s tax returns. (Oswald’s income received from CIA front companies would raise too many questions.)
    –Jeffrey Epstein’s Black Book. (Gates and Clinton, for example, wouldn’t be happy to be exposed as clients.)
    –Bankman-Fried’s Payoffs to Democrats and RINOs. (Not only would exposing the beneficiaries and the payments be deeply embarrassing, but there would be a public outcry for clawbacks of the stolen money that funded those political payoffs.)

  5. find your own states laws on citizens arrest.
    Oregon for example
    private citizens arrest actual state law on the books
    ORS 133.225
    Arrest by private person
    and ORS 161.255
    Use of physical force by private person making citizen’s arrest
    Next what is the crime?
    at a baseline we can typically find micreants in the public violating there oath of office
    This is a crime
    What is the oath of office

    You may need to pay for legal counsel and document your meetings.
    However, going alone will get you shot by LEO.
    You need a trusted clan.
    its not conspiracy or a crime to plan with others to take officially legally sanctioned action. don’t get “Whitmer-ed”
    Clog the courts with these criminals

    1. Douglas Allen Clark,

      You might not be aware but this web log only permits two or fewer hyperlinks per comment. I edited your comment so that it would post. If in the future you would like the readership to review more than two comments, this can be accomplished by using multiple comments having two or fewer links each.

  6. From Jonathan Turley’s column above:
    ‘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.’
    Maybe it’s because, in this case, the prosecutors (Biden’s DOJ) are in reality defense counsel for the politically connected who are also at risk because of what the loose cannon could unwittingly reveal under questioning from Republicans at his appearance before Congress.

  7. There is no limit to the political corruption of this DOJ. The Republicans would have ripped open the scab that has become the Democratic Party.

  8. This is a rhetorical column, no? The answers are as obvious as his fly-away hair. More demonrat chicanery.

  9. To quote a famous Democrat: “What difference at this point does it make?”
    This gelatinous soy swindler may have other information that makes him dangerous.
    His professor parents sure didn’t teach him ANYTHING about ETHICS.

    Get prepared for the collapse…not because of SBF, but the WHOLE ROTTEN SYSTEM is gonna trigger the final demise.

  10. This was probably a company set up by the cia to launder money and finance terrorists. Sam and and his girlfriend are the patsies. Don’t be surprised if one or both dies suddenly and the case is dropped by the doj. Leaving the investors who lost millions scrambling to get anything.

    1. If I were SBF I would be very worried if I was put into the same facility that held the late Jeffrey Epstein.

    2. From by way of LibertyLine website

      A Russian billionaire has become the third top cryptocurrency trader to die suddenly in recent weeks.
      Vyacheslav Taran, 53, the co-founder of trading and investing platform Libertex, died after his helicopter mysteriously crashed in a resort town near Monaco. 
      The vehicle plummeted on November 25 afternoon, killing Mr Taran, who had lived in Monaco for a decade, as well as a veteran pilot. …
      He is the latest in a growing list of powerful people in Vladimir Putin’s Russia to abruptly die. 
      The deaths, often reported as suicides, have included energy, oil, finance and shipping bosses as well oligarchs and millionaires.
      But three crypto stars have all died in recent weeks. Tiantian Kullander, 30, died ‘in his sleep’ last week, while millionaire Nikolai Mushegian, 29, drowned on a Puerto Rico beach.
      Mr Kullander, the co-founder of the Hong Kong-based digital asset company Amber Group, ‘unexpectedly’ died on November 23, the company said. 
      Mr Mushegian died only hours after tweeting that he heard the CIA and Mossad, America and Israel’s national intelligence agencies, were going to murder him.
      How the crash occurred on a day with blue skies as they took off from Lausanne, Switzerland has raised eyebrows over Mr Taran’s death.

    3. @Woo,
      There’s one conservative site that constantly claims that FTX was used to funnel funds back from Ukraine to pay off certain Dems…

      Just follow the money.


  11. The Administration/DOJ/DEM’s did not want SBF to testify out of fear of what else he will say under questioning by the Republicans, they want to silence him. They are afraid. The DEMS and Republicans who received $$$ are now subject to Clawbacks by FTX Administrators – recovering funds that belong to investors. Also, SBF Family and others wh received $$$, property, such as homes in the Bahamas will lose these properties and may also have to refund/subject to clawbacks of $$$ and property. FTX story is to get worse and where did all the money go? that was taken from investors?

    1. Very logical assertion.
      A man does not give you money and expect nothing in return. The greedy politicians at the trough should have asked what the cost of the money was. Sadly, they did not.

  12. Since we were going to find out that massive amounts of money still EXIST that was all given to DEMOCRATS while the small investor is bankrupt I guess the leftist in the government didn’t think that would look good.

    1. “Since we were going to find out that massive amounts of money still EXIST that was all given to DEMOCRATS “

      Did Bankman pay for the bullets that kill him?

  13. Mr Turley, you are brilliant as always. Am I to assume that you are still a Democrat, even after the past two years?

    1. John,

      Professor Turley is likely still a Democrat. The problem is that The Democrats are no longer Democrats.

      On related questions, yes bears still poop in the woods but as to the religion of the Pope, who knows? Doesn’t look like he [the pope] is a Catholic though.

      1. Yes, Democrats are no longer Democrats, they have “progressed” all the way to American Marxists. On the the other side of the aisle we find the GOP is also no more. We find “establishment” Republicans are members of the Uniparty, bought-and-paid-for traitors, fighting against America First patriots.

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