SBF says “dishonesty and unfair dealing” aren’t fraud, seeks to dismiss charges

Late Monday, legally embroiled FTX founder Sam Bankman-Fried moved to dismiss the majority of criminal charges lobbed against him by the United States government after his cryptocurrency exchange went bankrupt in 2022.

In documents filed in a Manhattan federal court, lawyers from the law firm Cohen & Gresser LLP shared Bankman-Fried’s first official legal defense. Lawyers accused the US of a “troubling” and “classic rush to judgment,” claiming that the government didn’t even wait to receive “millions of documents” and “other evidence” against Bankman-Fried before “improperly seeking” to turn “civil and regulatory issues into federal crimes.”

After FTX’s collapse last year, federal prosecutors acted quickly to intervene, within a month alleging that Bankman-Fried was stealing billions in customer funds, defrauding investors, committing bank and wire fraud, providing improper loans, misleading lenders, transmitting money without a license, making illegal campaign contributions, bribing China officials, and other crimes. Through it all, Bankman-Fried has pleaded not guilty. Now, in his motion to dismiss, Bankman-Fried has requested an oral argument to “fight these baseless charges” and “clear his name.” He’s asking the court to dismiss 10 out of 13 charges, arguing that federal prosecutors have failed to substantiate most of their claims.

“The Government’s haste and apparent willingness to proceed without having all the relevant facts and information has produced an indictment that is not only improperly brought but legally flawed and should be dismissed,” Bankman-Fried’s lawyers argued in one of several memos filed yesterday.

Bankman-Fried’s lawyers also allege that—after extraditing Bankman-Fried from his home in the Bahamas—the US has failed to honor terms of an extradition treaty requiring that the Bahamas consent to all charges brought against Bankman-Fried.

“Bankman-Fried now faces charges on four counts that were not encompassed by the counts listed in the Bahamas’s Warrant of Surrender and to which the Bahamas has not consented,” his lawyers alleged in court filings.

Should the court decide not to dismiss the charges, Bankman-Fried has asked the court to try the charges of illegal campaign contributions and foreign bribery separately from the charges of fraud and conspiracy. His lawyers argue this would help “avoid undue prejudice,” because a jury “may use the evidence of one of the crimes charged” to find “his guilt of the other crime or crimes charged.”

In short, combining the charges could “tempt the jury” to “infer a criminal disposition” on “the part of Bankman-Fried,” Bankman-Fried’s lawyers wrote in a memo.

Additionally, Bankman-Fried’s lawyers want a chance to further develop Bankman-Fried’s defense. To that end, they’ve asked the court to compel federal prosecutors to share any withheld “communications or other documents” relating to Bankman-Fried’s extradition from the Bahamas, as well as additional discovery from FTX that goes beyond the incriminating evidence gathered so far by federal prosecutors.

“The Government has failed to provide the required discovery and particulars needed to defend the case,” Bankman-Fried’s lawyers argued in a memo.

Bankman-Fried could not immediately be reached for comment.

https://arstechnica.com/?p=1937826