Monday, September 18, 2023
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Sam Bankman-Fried’s cushy house arrest revoked over witness intimidation

The disgraced cryptocurrency executive's messages to trial witnesses and leaking of his ex-girlfriend's personal diaries cost him a comfortable pretrial house arrest at his parents' California home.

MANHATTAN (CN) — A New York federal judge on Friday ordered FTX founder Sam Bankman-Fried to be jailed ahead of his October trial, revoking the 31-year-old’s home detention and remanding him to detention over alleged witness tampering, including his leaking of a star witness’s diaries to The New York Times.

Following a 90-minute bail hearing Bankman-Fried traded his suit jacket, tie, shoes and watch for handcuffs, before being escorted by U.S. Marshals into pretrial custody.

Prosecutors in the Southern District of New York alleged that Bankman-Fried’s handing over the diaries of his on-again, off-again girlfriend Caroline Ellison, a former Alameda Research co-CEO, were an attempt to interfere with a fair trial by an impartial jury.

The private documents from a Google Drive account were published without naming Bankman-Fried as the source last month in an article titled “Inside the Private Writings of Caroline Ellison, Star Witness in the FTX Case.”

Bankman-Fried’s defense argued in a letter last week that detention was unwarranted and insisted the prosecution’s detention memo relied “heavily on assumptions, unsupported inferences, and innuendo.”

Senior U.S. District Judge Lewis Kaplan refused to cut Bankman-Fried a break for what he found to be witness tampering and intimidation.

“Bail is revoked and defendant is remanded,” the Clinton-appointed judge said 80 minutes into the bail hearing on Friday afternoon.

The defense argued that detaining Bankman-Fried based on his communications with a reporter raised "serious First Amendment concerns," but Judge Kaplan found that such protections were not enforceable for speech with criminal intent.

"There isn’t any question that having frequent contact with the press, on its own and for no malign purpose, does not constitute obstruction or witness tampering or anything else criminal," he said.

Judge Kaplan denied an immediate motion from Bankman-Fried’s defense attorney Mark Cohen to stay the remand pending an appeal to the Second Circuit Court of Appeals.

Since his extradition from the Bahamas and arrest last year, Bankman-Fried has been free on $250 million bond. He was required to remain at his parents’ home near Stanford University in Palo Alto, California, and his electronic communications have been severely limited.

At Friday’s bail hearing prosecutors raised the possibility of pretrial detention at the Putnam County Correctional Facility in Carmel, New York, which they said would allow Bankman-Fried sufficient access to an evidence database for defense preparation.

Bankman-Fried's parents, Stanford University law professors Joseph Bankman and Barbara Fried, attended Friday's bail hearing, but did not comment to reporters following the remand of their son, whose $250 million personal recognizance bond they co-signed.

The New York Times has defended the paper's reporting practices.

"Newsmakers are allowed to call reporters and reporters are allowed to call newsmakers," a Times spokesperson told Courthouse News last month. "Any attempt to cast such calls in a negative light appears intended to intimidate people from exercising their First Amendment rights."

Bankman-Fried is set to stand trial in October on the slate of criminal counts of his initial indictment and return for a second trial in March 2024 on five additional counts.

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Categories / Criminal, Media, National, Securities

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