A three-judge panel hailing from the United States (US) Court of Appeals for the Second Circuit has delivered a significant blow to former FTX CEO Sam Bankman-Fried (SBF), by denying his motion for early release.
This decision, issued on 21 September, was reached by Circuit Judges John Walker Jr, Denny Chin, and William Nardini.
The crux of SBF’s appeal rested largely on First Amendment considerations, but the panel’s ruling firmly upheld the stance taken by Lewis Kaplan, the presiding judge overseeing SBF’s criminal case.
Judge Lewis’ determination that SBF’s actions constituted witness tampering was, according to the appellate judges, “correctly determined.”
The order stated that:
“We reject [Bankman-Fried’s] contention that the district court failed to consider a less restrictive alternative to detention. The record shows that the district court thoroughly considered all of the relevant factors, including [Bankman-Fried’s] course of conduct over time that had required the district court to repeatedly tighten the conditions of release. It also shows that the district court contemplated a less restrictive alternative offered by [SBF] — an order limiting his communications with the press — but reasonably concluded this was not ‘a workable solution longer term.'”
The judges added:
“[T]he district court did not err in concluding that [SBF] had failed to rebut the presumption in favour of detention. We have reviewed [the defense team’s] additional arguments and find them unpersuasive.”
This judicial decision carries profound implications, as it signifies one of the final opportunities for SBF to secure his freedom before his impending first criminal trial, scheduled to commence on 3 October.
A second trial looms on the horizon, slated for March 2024.
SBF stands accused of multiple charges related to fraud and conspiracy, intricately linked to the operation and eventual collapse of his cryptocurrency exchange.
Importantly, he has consistently entered a plea of not guilty to all seven charges lodged against him.
In a recent court order issued on Tuesday, the presiding judge has established specific conditions regarding the defense’s proposed witnesses in the case.
While the defense will have the opportunity to call four of the previously proposed witnesses, they must navigate certain legal requirements, including providing adequate disclosures at least three days before the potential witness testimony.
Additionally, the judge has declined to grant SBF’s motion to prevent a proposed government witness from testifying, thus affirming the witness’s admissibility.
The defense’s original roster of prospective witnesses consisted of seven individuals: Lawrence Akka, a British barrister; Thomas Bishop and Joseph Pimbley, affiliated with different consulting firms; Brian Kim, a data analytics and forensics expert; Bradley Smith, a law professor at Capital University Law School; Andrew Di Wu, an assistant professor at the University of Michigan, and Dr Peter Vinella.
The DOJ raised objections to these selections, citing various reasons, including the need for greater clarity regarding the intended scope of their testimony and their suitability for participation in a US criminal trial.
In response, Judge Lewis granted all of the DOJ’s objections.
However, he did permit the defense to consider summoning either Thomas or Brian to counter DOJ witnesses, notably an FBI agent or Peter Easton, whom the prosecution intends to call upon for testimony regarding customer deposits, as analysed from FTX data.
It is important to note that Thomas or Andrew would be required to comply with a specific condition: they must have filed a comprehensive Rule 16 disclosure at least three days before the scheduled date of their respective testimony.
Furthermore, the DOJ retains the right to lodge objections.
Similar conditions were applied to Joseph and Andrew.
Conversely, Lawrence, Peter Vinella, and Bradley have been entirely excluded from the list of witnesses.
In a notable footnote, Judge Lewis expressed reservations about Dr Peter Vinella’s qualifications as an expert in the pertinent subject matter, although he clarified that this was not the sole reason for the exclusion.
In a separate decision, the judge has ruled against SBF’s motion to exclude Peter Easton’s testimony, deeming it appropriate for inclusion in the proceedings.
Although the defense team retains the option to resubmit these witnesses for consideration, the path forward is laden with procedural complexities, and the US DOJ maintains the prerogative to raise objections.