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.”
We know exactly why they stopped him from testifying.
So do you.
Easy to see that the ploy of having Morris pay off Hunter’s Tax Debt is twofold: 1. the Source Bank Account(s) of where Hunter keeps his Millions and by now Billions will not thus be revealed. (except to Morris when he is paid back… and of course he no doubt knows the source anyway…) 2. The Public will have a sense that Hunter really does not have that much money….. Always look for the Devious Reason when it comes to anything re: The Bidens. Always ‘Follow the Money…’ .
The U.S. Department of Justice will never gain legitimacy until it owns up to it’s leading role in the Bush torture program.
The DOJ was both an accessory before and after the fact in war crimes that violated Ronald Reagan’s torture treaty (also codified into federal criminal law).
It’s been 20 years, isn’t it time for DOJ to own up to what it did? 20 years later we now know the Bush officials outright lied and exaggerated it’s claims used to justify torture. None have even apologized or held accountable in any way.
SBF will be sentenced to Epstein’s bunk with no need for parole.
Sleep with one eye open, Sam. Your Democrat friends control the cameras.
Remember what happened to whitey Bulger in prison!
Look at the pictures of the people that were slobbering over him. Duh!!!
Now they have him in a prison where violence is prevalent. Hmmm…
Jonathan: Sam Bankman-Fried was arrested on allegations he defrauded customers and investors and lenders to the tune of $8 billion–and for violating campaign finance laws by contributing to both Republicans and Democrats with stolen money. As some astute commentators on this blog have pointed out wouldn’t it be likely B-F would take the 5th if called to testify before Congress–especially since he knew the feds were breathing down his neck. And the fact that B-F was found in the Bahamas indicates he could have fled further to avoid extradition. But you claim there was some nefarious reason for B-F’s arrest now. You say the “Biden administration was eager to prevent questions on Bankman-Fried’s political contributions and associations”. The implication is that the Biden WH was pulling the strings over at the DOJ to try to silence B-F on contributions to the Democrats. Do you have any evidence the DOJ decision to charge B-F was based on political considerations? The DOJ has asked those who received money from B-F to return the stolen money. That applies to both the Dems and the GOP. So I think it is a stretch to claim the Biden administration and the DOJ are trying to “muzzle” B-F.
“by contributing to both Republicans and Democrats with stolen money.”
Dennis, why can’t you be honest and say almost all the money went to Democrats? If the amounts donated were close, your comment would be acceptable. Based on the truth, your comment is wrong and dishonest.
You used this dishonesty to draw a conclusion. That conclusion is outright foolish.
The US Attorney also absurdly described the contributions as “bipartisan.” Further evidence of DOJ’s Democrat bias.
9 for the dims, 1 for the republicans.
“Dennis, why can’t you be honest . . .”
Because of his (and the Left’s) basic premise, seen almost daily: The ends (some desire) justifies the means, including bald-faced lies.
The Left’s motto should be: We are militantly dishonest.
His R contributions were dark. He contributed to both parties equally.
When ATS doesn’t know what he is talking about he makes outlandish statements.
Based on the family one would guess most of the money went to Democrats, but who knows. It is too early to know, and later when ATS is discovered wrong, as usual, this will be forgotten about. That is what he counts on.
However, from one of the more honest sites, here is what they have to say.
“Bankman-Fried, whose cryptocurrency exchange platform FTX has collapsed in recent weeks, funneled an estimated $262,200 to Republicans throughout the 2021-2022 election cycle, according to Federal Election Commission records. His contributions to Republicans paled in comparison to the nearly $40 million he contributed to Democratic campaigns but still represented a significant sum, compared to most Americans.”
This money is penny ante. Where did the real bucks go? Who facilitated this fraud?
He may have plead the 5th, he may not have – merrick did not give him the chance. I wonder why. There was no way that he could left the Bahamas, the government had eyes on him. If he started to leave they could have arrested him.
All the trolls are flailing. They havent got the official talking points.
The just came out. The DoJ has just annonced the reason they stopped the congressional, under oath testimony, is because he may have revealed information about other investigations the DoJ is pursuing, and revealing them under open testimony would jeopardize these other investigations.
So there you have it, Proof positive the DoJ sabotaged the testimony. for reasons that cannot be explained or fact checked. ie, all BS
You should read the column again, you obviously didn’t understand it.
The implication is clear. Why did DOJ move now and not after the testimony? The circumstantial evidence is quite clear, DOJ silenced the defendant. If he took the fifth in testimony nothing would be lost. If he implicated himself everything would be gained.
DOJ chose to take the loss. Why?
This is after the democrat head of the House Finance Chair Rep. Maxine Waters subpoena declined to issue a subpoena to Bankman for testimony in front of the committee.
The biggest fraud this century and the dems seem to be covering for her. They didn’t treat Madoff this way.
Explain what the difference is between the two.
If DOJ allowed Bankman to testify at congress they wouldn’t need extradition. Just let him come into the country and stand outside when he’s done testifying to arrest him.
So DOJ gave up an opportunity for self incrimination and an easy arrest. When DOJ makes their job harder you have to ask why.
When people defend a crooked, or at least stupid DOJ, we have to ask why.
Defend: Wall Street’s Proclivities at all cost (even at the expense of life).
He wasn’t going to testify in person. He was going to testify via video.
Dennis McIntyre: hopefully the world knows by now that like clockwork you will write a rebuttal (completely illogical Spin 99.9% of the time) to anything Prof. Turley says. To re-set the viewpoint you present: No Stretch At All to claim that Joe, et al ‘are trying to ‘muzzle’ B-F..’ when it is known that the GOP donations only went to the 6 pack of RINO Senators led by Mitt Romney… so let’s be clear — B-F’s Multi Millions in Donations went to support Joe’s camp. Period. ..which makes it plausible that there is some ‘stuff’ there that needs to be kept under wraps….
MIT owes his tuition back
For someone who is supposed to be so smart his actions have anything but intelligent.
And the DNC owes forty million to the investors.
And the most corrupt rep. owes America a blown kiss.
I plead the 5th, I plead the 5th, I plead the 5th, … O.M.G. I plead the 5th!
He can be compelled to testify before Congress, but he would just plead the 5th Amendment on the basis of Self-Incrimination.
He already submitted written testimony and didn’t do that.
My mistake — there is a draft copy of his testimony online (Forbes, Bloomberg), but I don’t know whether he’d actually submitted it to the committee and don’t see it on the HFC’s site. Prior to his arrest, NBC reported that he was refusing to testify before the Senate today: https://www.cnbc.com/2022/12/12/former-ftx-ceo-sam-bankman-fried-refuses-to-testify-by-senate-banking-.html
I plead the 5th, I plead the 5th, I plead the 5th, … O.M.G. I plead the 5th!
He can be compelled to testify before Congress, but he would just plead the 5th Amendment on the basis of Self-Incrimination.
Why just make stuff up that has no relevence?
We know he is a space alien and no entity on earth has jurisdiction.
Just stick to the facts!
C’mon you have two blatant reasons staring you in the face.
1) He’s got to get on a plane to leave the island to head to the US.
What’s the odds he decides to go somewhere else where there is no extradition for financial crimes back to the US?
He can easily do that if he’s not under arrest and is given his passport so e could travel out of the country.
2) His statements were to set up his defense. But then there’s another problem.
He could be asked under oath, who he donated to and why. That scares the likes of Maxine Waters who IIRC got some of his money. Not to mention he goes to Congress, Says he f’d up but beyond that his lawyers tell him to plead the 5th.
So either Dems and Biden administration don’t want to risk him saying anything… or he’d do a runner.,
Your choice.
-G
Exit Strategy:
1.) Cruise Boat/Private Boat
2.) Plead the 5th Amendment on the basis of Self-Incrimination.
3.) Disappear or be Disappeared.
Silly Anon…
1) On a cruise ship too easy to be removed.
2) He shows up to congress to plead the 5th beyond his written statement. He will be arrested.
3) Disappear?
That’s the point.
He’s on an island, not under arrest. He was under investigation, but had he decided to get on a boat, get to a larger boat in international waters… he’s gone. He could do it in the dead of night. Get somewhere and hop a jet before international arrest warrants are out.
His defense is that he messed up and that’s not illegal in and of itself. Businesses can fail.
Problem is that the house of cards came crashing down.
Bets made failed.
The DOJ and FBI HAD to shut this guy up and they did.. Too man CRIMINALS in Washington were into Bankman-Fried. No doubt both 0bam and the Clinton’s are involved in this and their covers were about to be blown! Is ARKANCIDE next for Bankman-Fried?
Both good points. However, the political contributions will likely come out when the bankruptcy proceeding attempts to claw them back. Apparently there is a lack of records that might make it difficult. Maybe they can easily be tracked on Quickbooks, but not if they weren’t entered properly. The audit trail may extend to thank-you notes and emails. Those donations rightfully belong to the FTX clients whose funds disappeared. So the information should come out eventually, albeit not in an open hearing where the donees are present and publicly named.
There is some charming video of Maxine Waters hugging him if you haven’t already seen it, so apparently he was pretty tight with some of our legislators. I guess that $400 million buys you that. It will be interesting to see who and how much.
Some really good news. Right now there is bi-partisan support to create a fully independent (non-political) U.S. Department of Justice. Congress could make it happen today.
We have an opportunity to fully rid the DOJ of J. Edgar Hoover’s unconstitutional policies and de-politicize the DOJ. Both Republicans and Democrats would support these vitally needed reforms.
I see an Epstein coming……
Ya think?
(BTW: SEC Gary Gensler is a CROOK / RICO… Not a question. Not a surprise.) — C’Mon… “BANKMAN FRIED”? What an odd coincidence don’t you think? At least he isn’t dead like the other recent Crypto King cluster of fatalities…yet. — In 2006… post Enron / WorldCom / Global Crossing loophole ridden Sarbanes Oxley I contacted Sr. congress / DOJ-FBI / SEC OIG… media about what I knew of the existence of a “HOTLINE” to the SEC (Selective Enforcement Commission) to Stop or Stall Investigations. This was especially true when the callers / VIP’s to STOP or STALL SEC “investigations” were powerful politically connected / USG “Strategic Partners”. — THEY all did nothing….. Then we had back-to-back MASSIVE PONZI SCHEMES Tom Petters and Bernie Madoff…. After MADOFF exposed / caught by whistleblower Harry Markopolos (“As a group the SEC couldn’t find 2nd base at Fenway Park.”) Ma. Congressman (D) Stephen Lynch later confirmed my warnings in a pr stunt House Finance Committee “investigation” of just how the SEC / FBI “missed” Bernie Madoff. So after 2008 many saw coming… (including the FBI) they replaced the holes in SOX with Dodd Frank (FROD) – Now some goofy gamer clown yahoo who assumed he was untouchable flew under the USG / SEC / DOJ-FBI Radar making HUGE political contributions when Helen Keller could have seen this coming (and she’s dead!) — You can’t expect the people / system that create / profit from corruption to fix corruption. Peace. Mark J. Novitsky 2002 Nat Sec WB / Military Industrial Surveillance Complex