The arrest of Sam Bankman-Fried yesterday was sudden and surprising in mild of Bankman-Fried’s plan to testify earlier than Congress. As a prison protection lawyer, my response to the arrest final evening stays unchanged: that is the primary time that I can recall the place prosecutors moved aggressively to cease a defendant from making self-incriminating statements. His testimony would have been completely admissible and certain devastating at trial.
I beforehand wrote how Bankman-Fried was doing hurt to his case by talking within the media and to Congress. So why would the Justice Department transfer to cease the self-inflicted harm? You’ve a significant goal who was about to voluntarily testify for hours.
That’s ordinarily a dream for prosecutors, however the Justice Department moved shortly to forestall that from occurring. At that stage, Bankman-Fried was not charged or in custody. He was not protected by Miranda or different constitutional guidelines from self-incriminating statements.
Certainly, a few of us had already warned that he was inflicting himself appreciable harm in making such statements. This was a defendant with a big authorized staff dealing with potential prison prices who appeared keen to talk about his actions and motivations. Most prosecutors would sit again, make popcorn, and watch this unfold.
The curious transfer led many to query whether or not the Biden Administration was keen to forestall questions on Bankman-Fried’s political contributions and associations. He was the second highest donor to Democratic causes within the final election cycle. His mom, a legislation professor at Stanford additionally heads a significant Democratic marketing campaign fund.
It is usually potential that the Justice Department merely needed to indicate the general public that it was transferring aggressively regardless of his shut Democratic ties. It could have secured adequate proof (together with potential cooperating witnesses) to fulfill the idea for prices and an extradition request. Furthermore, the costs are more likely to make some Democratic figures uncomfortable as this matter enters the prison course of.
But, that also doesn’t clarify why the Justice Department wouldn’t need to hear a full account from Bankman-Fried earlier than successfully shutting him down as a prison defendant. That is the primary time that I can recall the place the prosecutors, moderately than protection counsel, moved successfully to muzzle a defendant.
Regardless of the motivation, the timing of the costs successfully stopped the windfall of data coming from Bankman-Fried.
Bankman-Fried is accused of diverting buyer funds from the beginning of his cryptocurrency change to assist his hedge fund, Alameda Analysis. He’s additionally accused of utilizing his fraudulent practices to fund a lavish life-style, purchase actual property, make enterprise investments, and fund Democratic causes. The vary of prices consists of wire fraud, wire fraud conspiracy, securities fraud, securities fraud conspiracy, and cash laundering.
Notably, the eight counts embrace violating marketing campaign finance legal guidelines, a cost that might show embarrassing for some highly effective political pursuits.
The prices are on high of prices introduced earlier Tuesday by the Securities and Alternate Fee, which alleged Bankman-Fried defrauded buyers and used proceeds from buyers to purchase actual property on behalf of himself and household.
The particulars of these transactions might need been voluntarily disclosed below intense cross examination if the Administration allowed him to seem as a witness. Furthermore, Bankman-Fried was already inflicting himself appreciable hurt in media interviews.
Bankman-Fried’s dad and mom have left Stanford and are reportedly within the Bahamas with their son. They may themselves face questions. His father, Joseph Bankman, is a tax professor and was a paid worker of his son’s firm. His mom reportedly labored with him on a few of these huge donations to Democrats.
The dad and mom are reportedly now involved that the authorized prices within the case may “wipe them out.”
Bankman-Fried has admitted that just a few hours of efforts a day might need prevented these losses. It feels like a “my dangerous” protection. That won’t fly in courtroom and constructing on that protection might need sealed his destiny.
The query is why the Justice Department moved to cease Bankman-Fried as he labored so exhausting to make the prison case in opposition to himself. He comes throughout badly in these previous interviews like a trophy-laden millennial who believes that he simply must play to win. It isn’t fairly that straightforward in a prison case.
If he testified, Bankman-Fried couldn’t solely have made any prison protection harder however he may have probably tripped the wire for allegedly false or deceptive statements below oath. It was a target-rich atmosphere for Congress — and a possible bonanza for prosecutors.
Bankman-Fried was in a harmful free fall. Regardless of his authorized staff, Bankman-Fried gave the impression to be praying for somebody to “cease me earlier than I converse once more.” Somebody simply did.
The Biden Administration’s transfer appeared to convey a extra constructive that means to Ronald Reagan’s “high 9 most terrifying phrases within the English Language”: “I’m from the federal government, and I’m right here to assist.”