CNN
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Federal prosecutors in Manhattan filed an additional indictment from FTX co-founder Sam Bankman-Fried Monday, dropping an additional count towards him.
Prosecutors had formerly indicated their strategies to drop the 1 count of conspiracy to make illegal marketing campaign contributions against Bankman-Fried previous month in a letter to the court docket.
“The Federal government has been educated that The Bahamas notified the United States before nowadays that The Bahamas did not intend to extradite the defendant on the campaign contributions count. Accordingly, in retaining with its treaty obligations to The Bahamas, the Governing administration does not intend to proceed to trial on the campaign contributions rely,” prosecutors wrote in the July letter.
This is the 2nd time prosecutors are culling prices that Bankman-Fried will deal with at his demo -— established for October — due to diplomacy issues with the Bahamas, exactly where he was arrested previous calendar year.
Prosecutors opted in June to sever five other charges against Bankman-Fried that had been not bundled in his extradition from the Bahamas.
Bankman-Fried nevertheless faces 7 counts, like fraud fees and cash laundering, connected to the alleged yearslong scheme to defraud FTX and Alameda Investigation loan providers and traders.
Prosecutors keep that Bankman-Fried done an unlawful campaign finance plan in connection to the fees that are transferring forward to demo.
“The defendant’s use of buyer deposits to conduct a political affect marketing campaign was aspect of the wire fraud plan billed in the initial indictment. And as portion of the at first charged funds laundering plan, the defendant also concealed the resource of his fraudulent proceeds through political straw donations,” the submitting, docketed past week, claimed.
Prosecutors requested the judge to established a day to arraign Bankman-Fried on the latest indictment — which would be his initial courtroom visual appeal considering that the judge revoked his bail and remanded him to a New York federal jail on Friday.
In a new submitting, prosecutors drop light-weight on how they are creating their situation from Bankman-Fried, noting that they will rely on eyewitness testimony from co-conspirators, ledgers monitoring revenue flows, a recording and personalized notes and textual content messages from prime firm executives.
In addition to the three previous major executives of FTX and sister hedge fund Alameda Exploration, who have pleaded guilty to their function in the alleged fraud, prosecutors wrote that “the Govt expects to connect with, amid other witnesses, various previous employees of Alameda and FTX, a number of of the defendant’s customer, loan company, and investor victims, and an specialist witness whose monetary assessment will clearly show the mother nature and extent of the fraud. The Governing administration also intends to introduce documentary evidence of the defendant’s crimes, like, between other factors, monetary data, Google paperwork and excel spreadsheets, and personal communications.”
Particularly, prosecutors cited ledgers that Bankman-Fried and some others employed allegedly to retain keep track of of illicit dollars transfers concerning the two entities.
In addition, they reported they had a recording and notes from Caroline Ellison, the previous top rated government at Alameda who has pleaded guilty and agreed to testify at demo.
“Ellison’s personalized notes and to-do lists involve entries these kinds of as a checklist titled ‘Things Sam is Freaking Out About,’ which delineates Ellison’s knowing, from conversations with the defendant, of what remained the defendant’s top small business issues, this sort of as Alameda’s trading hedges, negative press about the partnership in between Alameda and FTX, and fundraising,” prosecutors wrote.
In the recording to team at an all-fingers meeting two days just before FTX filed for bankruptcy, Ellison said, “Then with crypto currently being down, the crash, the – like, credit score crunch this 12 months, most of Alameda’s loans acquired called. And in buy to, like, meet these bank loan recalls, we ended up borrowing a bunch of money on FTX which led to FTX possessing a shortfall in user funds,” according to prosecutors.
Prosecutors also mentioned they want to exhibit the jury a personal concept another major FTX government, Ryan Salame, sent to a family member in November 2021, detailing that he was a straw donor that Bankman-Fried applied to make political donations.
“Salame is unavailable as a witness,” prosecutors advised the judge, informing him that Salame’s attorney “has represented that if subpoenaed, Salame would invoke his Fifth Modification proper versus self-incrimination.”
Prosecutors also never want Bankman-Fried’s lawyers to issue any of the witnesses about their recreational drug use. Bankman-Fried’s attorneys said they reserve the appropriate to obstacle proof prosecutors might look for to use. Exclusively, they questioned the decide to block the government from employing any evidence it turned in excess of after July 1. In addition, they reported they would oppose prosecutors applying evidence about FTX’s bankruptcy, its capability to make shoppers whole, and proof of Mr. Bankman-Fried’s resignation from FTX.
