A snippet of computer code. Over 6 million pages of emails, Slack messages and other digital records. And a small black notebook with handwritten observations.
For months, federal prosecutors investigating the criminal case against ousted cryptocurrency executive Sam Bankman-Fried have amassed an enormous and unusually diverse body of evidence. The documents include cryptocurrency trading logs and encrypted group chats from Bankman-Fried’s failed exchange FTX, as well as stunning personal reflections recorded by key witnesses in the case. .
The mound of evidence ranks among the largest ever collected in a white-collar securities fraud case prosecuted by federal officials in Manhattan, according to data provided by a person familiar with the matter. For example, in Martha Stewart’s securities fraud prosecution in 2004, prosecutors gave defense teams 525,000 pages of evidence, a number that has increased significantly in recent years.
The increasing variety and volume of material in the FTX case has led Bankers, who have been charged with 13 criminal charges, including charges of misappropriating billions of dollars in client funds, defrauding investors, and compromising campaign funds.・It highlights the legal challenges that Fried, 31, faces. law. he pleaded not guilty.
A trial is scheduled for October, and prosecutors have collected 2.5 million pages of evidence alone, ranging from mobile phones and laptops to the contents of Bankman-Fried’s Google account. At a hearing in March, federal prosecutor Nicholas Roos, who is investigating FTX, said the government-obtained laptop was packed with so much information that FBI technicians had to decrypt it all. said he was having a hard time doing it.
“There’s a huge amount of information to sift through, and in some cases, we find very useful information,” said Moira Penza, a former federal prosecutor and now private practice. “It’s really a challenge.”
Evidence in a criminal case usually remains largely secret until just before the trial. In the Bankman-Fried case, however, interviews and review of recent court filings provided an early glimpse into a unique set of records collected by FTX prosecutors.
The investigation began in November after the FTX bankruptcy threw the cryptocurrency market into turmoil. Almost as soon as the deal closed, prosecutors began collecting documents, sending subpoenas to FTX employees and asking them to document the political campaign financed by Bankman-Fried.
Requests were often wide-ranging. A person who received the subpoena said it took several days for prosecutors to ask for all the documents related to FTX and send a group of data experts to extract the information from the array of devices.
While much of the content prosecutors have collected is typical corporate content, other materials show unusual personal dynamics at FTX.
The black notebook, allegedly a diary, belonged to Caroline Ellison, Bankman-Fried’s on-and-off girlfriend and former top executive in his business empire, three people familiar with the matter said. .
Ellison, formerly chief executive of FTX sister firm hedge fund Alameda Research, also recorded his observations about Bankman-Fried in a series of electronic documents circulated among lawyers in the case. There are three people who are familiar with this matter. Said. Two of the people said Ellison expressed personal and professional resentment against Bankman-Fried at times.
Lawyers and representatives for Bankman-Fried and Ellison declined to comment or did not respond to requests for comment on evidence in the case. A spokesman for the federal prosecutor in Manhattan declined to comment on the discovery process.
Ms. Ellison is expected to be a key witness. She, along with two other executives, Gary Wang and Nishad Singh, have pleaded guilty to fraud charges and agreed to cooperate with prosecutors pursuing Bankman-Fried. Days after FTX’s bankruptcy, she told Alameda employees that she, Bankman Freed, Wang and Singh used FTX customer money to fill holes in Alameda accounts. bottom. She also dated Mr. Bankman Freed and lived together in a penthouse in the Bahamas, which was the base of their exchange.
Penza said personal notes from her and other witnesses could be helpful to defense attorneys during cross-examination.
“The biggest risk with collaborators is that the defense can say here that she’s cooperating to get her out of a long prison sentence,” she said. “But modern juries are less likely to take testimony at face value for reasons of revenge or failed love affairs.”
Many of FTX’s corporate records, including emails, Slack messages, and transaction logs, were kept by law firm Sullivan & Cromwell, which took over the exchange’s operations after it declared bankruptcy.
In recent court filings, Bankman-Fried’s attorneys argued that prosecutors relied on Sullivan & Cromwell as a de facto agent in obtaining documents from the company. Lawyers argued that by “outsourcing” the process to the firm, prosecutors avoided legal liability to turn over potentially useful evidence to Bankman-Fried’s legal team.
Sullivan & Cromwell’s detective work, which has filed bills totaling $55 million in bankruptcy court, has already proven profitable for prosecutors. In court filings in January, Sullivan & Cromwell showed excerpts from FTX’s underlying codebase, showing a feature that would allow Alameda to borrow virtually unlimited amounts of money from the exchange.
In an email earlier that month to Sullivan & Cromwell attorneys, Ruth requested FTX trading logs for accounts owned by Bankman-Fried, Ellison, Wang, Singh and two others, named said to have been edited. in court records. He also asked for transcripts of a group chat titled “Donation Processing” on the encrypted messaging app Signal where FTX executives discussed campaign finance issues.
Prosecutors also seized direct evidence from people associated with Bankman-Fried. Last month, the FBI raided the $4 million Maryland home of FTX executive Ryan Salameh, who donated tens of millions of dollars to Republican candidates, including recently indicted Rep. George Santos of Long Island, New York. executed the warrant.
Investigators stole Salameh’s mobile phone as well as that of his girlfriend, cryptocurrency lobbyist Michelle Bond, according to two people familiar with the matter. Mr. Bond ran for Congress as a Republican in a different Long Island constituency last year, but was unsuccessful.
Throughout the year, prosecutors turned over evidence to Bankman-Fried’s attorneys, a process known as discovery.
At a hearing in March, Ruth told Judge Louis A. Kaplan, who is overseeing the case, that the prosecution had obtained four laptops, some of which were large enough to complicate analysis. and provided a detailed update on the process. The laptop belonged to Wang, according to two people familiar with the matter.
Lawyers for Wang, Salameh and Bond did not respond to requests for comment.
Roos also said the government has handed over to his legal team about one million documents obtained from witnesses and other third parties in the case.
“We have produced 927,000 units,” he said. “So, if you do the rough math, he’s probably 110,000.”
“Reading before bed,” replied Judge Kaplan.
