Sam Bankman-Fried, founder and former CEO of the crypto-trading platform FTX, has sent mixed messages about his legal moves. It is not uncommon for newly minted defendants, who are calling the shots, to waiver on what they will do next because they are in new territory. Bankman-Fried, by all accounts a quick study, is waffling between trying to do the right thing and preserving his rights.
Bankman-Fried currently has two lawyers with outstanding experience; Mark S. Cohen and Christian Everdell, both at the law firm of Cohen & Gresser. Everdell served for nearly a decade as an Assistant U.S. Attorney for the Southern District of New York (SDNY), where he was a member of the Complex Frauds and Cybercrime Unit and the Terrorism and International Narcotics Unit. Both attorneys know their way around the SDNY.
When Bankman-Fried was first indicted, a Bahamian court held him at Fox Hill Prison in the Bahamas, a notoriously terrible prison. It was initially expected that Bankman-Fried would fight extradition, allowing him time to prepare for a defense pending his eventual return to the U.S. These extraditions can last many months or years. However, when it looked like Bahamas was going to continue to hold Bankman-Fried, extradition to the U.S. had some appeal if he could make bail, something good attorneys would have negotiated in advance.
The importance of bail is important in criminal cases goes beyond freedom for the defendant because it also allows attorneys access to the defendant to prepare the case. Legal visits in prison are difficult and uncomfortable. It would also allow access for prosecutors to speak with Bankman-Fried for proffer sessions in advance of a plea agreement. Had Bankman-Fried been held at MDC Brooklyn, a likely designation for pretrial detainees like him, it would be difficult to arrange legal meetings just because of the security of the facility. Attorneys prefer the nice leather chairs in a conference room over the metal chairs of a prison visitation room.
That Bankman-Fried got bail was unusual. First, he is potentially looking at a life sentence if convicted, so there is the ultimate incentive to flee. Second, with the level of cooperation of two executives, one from FTX (Gary Wang) and the other from Alameda (Caroline Ellison), there is a considerable amount of information that the government already has. However, the complexities of the transactions will necessitate the government having a number of cooperating witnesses to piece this fraud together and, more importantly, recover the maximum amount of assets. A free Bankman-Fried for the moment makes sense for both the government and the defense team.
No sooner had Bankman-Fried been given a record $250 million bail and he headed to live at his parent’s house in Palo Alto, CA, there were rumors of his guilty plea. This made absolutely little sense because it would most certainly lead to his being put in prison, MDC Brooklyn. Bernie Madoff remained free on bail until he pled guilty and was then remanded into custody to MCC New York. If a person admits guilt and has a considerable amount of prison time pending, like Life in prison, judges have few options but to lock them up.
In the end, the decisions made in a criminal case lie on the shoulders of the defendant. The defendant makes all the calls, no matter how much their attorneys may scream at them to do something otherwise. Based on the comments Bankman-Fried has made in the recent past about not “knowingly commingling funds,” he may have had an urge to plead guilty to show some level of cooperation. However, that would not serve him, nor the victims of FTX, well. Right now, information is king and Bankman-Fried is best situated to provide information, at some point, as someone who is presumed innocent rather than as a guilty felon. Those conversations will occur, just not now.
A free Bankman-Fried also has value to prosecutors who are still getting information from those who are cooperating or who will soon cooperate. Seasoned lawyers like those Bankman-Fried has would not allow their client to plead guilty if they had not already negotiated a deal with prosecutors on what a deal would look like. U.S. Attorney Damian Williams has no incentive to offer Bankman-Fried a plea deal that is worth taking when nobody is even sure of the dollar amount or number of victims in the case. No lawyer would take a plea for Life in prison … may as well go to trial.
Rumors of a Bankman-Fried guilty plea are premature and both prosecutors and defense attorneys are likely in agreement that now is not the time.