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Campaign finance charge dropped in case against Sam Bankman-Fried
NEW YORK (AP) — The founder of FTX Sam Bankman-Fried He will no longer face campaign finance charges at a criminal trial in October, federal prosecutors said, citing a decision by Bahamian authorities to dismiss a count in the indictment that was not included in the arrest warrant against him when he was tried. extradited to the United States in December.
Prosecutors told U.S. District Judge Lewis A. Kaplan in a letter that the Bahamian government informed him Wednesday that authorities there did not consider the charge to be included in Bankman-Fried’s extradition. Therefore, prosecutors wrote, they would not resubmit it at trial, consistent with the United States’ treaty obligations to the Bahamas.
Bankman-Fried, 31, has been confined to his parents’ home in Palo Alto, California, under a $250 million bail that prosecutors posted Wednesday. asked a judge to revokeProsecutors say his frequent contacts with the media demonstrate a desire to influence the composition of the jury. His lawyers deny that. The judge imposed a gag order while he decides the matter.
The man once considered a cryptocurrency guru has pleaded not guilty to charges that he defrauded investors and plundered FTX customer deposits to fund the lavish lifestyles of some of those who helped fuel his meteoric rise in the cryptocurrency world. FTX went bankrupt in November when the global exchange ran out of money after the equivalent of a bank run.
In early May, Bankman-Fried’s lawyers asked to drop a charge of conspiracy to defraud the United States and violate campaign finance laws, the eighth count in the original indictment against him, saying it was not included in an “extradition warrant” that outlined the seven other charges he would face in the United States.
They said allowing the charge to go forward would set a “worrying precedent that would allow prosecutors to engage in a red herring” in which they would obtain a defendant’s extradition by including charges they know the extraditing state would approve, only to add charges at a later date that would likely be disapproved.
The charge, which carries up to five years in prison upon conviction, centers on the government’s claim that Bankman-Fried allowed more than $100 million to be diverted from Alameda Research to fund more than 300 political contributions that were illegal because they were made in the names of ghost donors or came from corporate funds.
In an indictment, prosecutors said Bankman-Fried helped enhance his personal standing in Washington, D.C., raise FTX’s profile and “ingratiate himself with candidates” who could help pass legislation favorable to FTX, including legislation regarding regulatory oversight of FTX and its industry.
The indictment says Bankman-Fried became one of the largest publicly reported political donors in the 2022 midterm elections, arranging for substantial contributions to Democratic and Republican candidates, and across the political spectrum.
“Bankman-Fried, however, did not want to be known as a left-winger or have his name publicly associated with Republican candidates,” prosecutors wrote.
Michael Zweiback, a Los Angeles criminal lawyer and former federal prosecutor who headed the cybercrime and intellectual property crimes section in the Central District of California, said the prosecution’s withdrawal of the campaign finance charge would not prevent it from presenting facts related to it at trial.
“This evidence is not excluded simply because the charges were dropped,” he said. “Evidence of systematic campaign donations is integral to the description of the nature of the fraudulent scheme and would therefore be admissible.”
Zweiback said the dropping of the charge in the October trial and a related charge in a superseding indictment that could be tried next year “will not impact the case” — or the more serious charges that have led U.S. Attorney Damian Williams in New York to call it one of the largest financial crimes in history.
He said the campaign finance evidence will likely be used to show the jury how Bankman-Fried planned to “maintain his grip on the industry.” Zweiback added that they will want to show jurors that his plans included soliciting “favors and influence from politicians.”