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(Kitco News) -
Prosecutors from the U.S. Department of Justice (DoJ) asked the judge presiding over FTX founder Sam Bankman-Fried’s criminal trial to revoke his bail and jail him on Wednesday, saying he “crossed a line” by allegedly trying to intimidate a witness.
Prosecutor Danielle Sassoon told U.S. District Judge Lewis Kaplan at a hearing in Manhattan federal court that the former crypto CEO has had over 1,000 phone calls with journalists. But last week, the DoJ filed a complaint against Bankman-Fried accusing him of leaking the private diary of former Alameda CEO Caroline Ellison in an effort to discredit her as a witness.
The court filing submitted by U.S. Attorney Damian Williams on July 20 accused Bankman-Fried of sharing Ellison’s journal and other personal writings with a New York Times reporter for an article published that same day, characterizing the leak as an “attempt to interfere with a fair trial by an impartial jury.”
Ellison became a government witness in December, and she had a tumultuous partnership with SBF spanning several years that was both romantic and professional.
“This latest incident is an escalation of an ongoing campaign with the press that has now crossed a line,” Sassoon said of the Ellison article. “No set of release conditions can ensure the safety of the community.”
She also said she is concerned about what Bankman-Fried may have told Michael Lewis, the author of financial true-crime best-sellers Liar’s Poker and The Big Short, who will be releasing a book about FTX around the time that the fall trial is scheduled to begin.
One of the purposes of the court hearing on Wednesday was to consider what Kaplan called “the adequacy and continuation of the current bail conditions.” Bankman-Fried has been confined to his parents' home in Palo Alto, California since his extradition from the Bahamas in December, apart from legal and health-related appointments.
Bankman-Fried’s lawyer Mark Cohen told Judge Kaplan that his client was merely trying to protect his reputation, and that it "really would be almost impossible" to prepare for the upcoming trial if his client were jailed. Cohen asked that the judge “deny the application and put forth an order, however strict the court determines is required, so we can just put this issue behind us.”
The New York Times article featured excerpts Ellison’s writings where she admits to feeling overwhelmed by her leadership role at Alameda Research, and describes the pain and frustration she felt from her fights and break-ups with Bankman-Fried while continuing to live and work closely with him.
Prosecutors had already asked the judge to bar Bankman-Fried from making public statements that could interfere with the case in the past.
In last week’s filing, Williams described as “particularly pernicious” Bankman-Fried’s decision to use the Times to publicize the information. “Having the story appear in a reputable newspaper with a worldwide readership without identifying the defendant as the source lends a misleading patina of legitimacy to what would otherwise be naked advocacy, compounding the risk of tainting prospective jurors,” he wrote. “In addition to tainting the jury pool, the effect, if not the intent, of the defendant’s conduct is not only to harass Ellison, but also to deter other potential trial witnesses from testifying.”
The complaint asserts that the government “is particularly attuned to these concerns after the defendant’s improper outreach to a potential witness resulted in the modification of his bail conditions,” referring to SBF’s attempts to communicate with Ryne Miller, General Counsel of FTX US, through both email and Signal on Jan. 15.
Bankman-Fried’s trial on the initial set of criminal charges is scheduled to begin on Oct. 2, 2023.
