Extracts from computer code. Over six million pages of emails, Slack messages, and other digital records. and a small black notebook filled with handwritten notes.
For months, federal prosecutors have been building the criminal case against cryptocurrency executive Sam Bankman-Fried by collecting an unusually wide and diverse array of evidence. The documents include records of encrypted transactions and encrypted group conversations from Mr Bankman-Fried’s collapsed exchange, FTX, as well as eye-catching personal reflections recorded by a key witness in the case.
The mountain of evidence ranks among the largest ever collected in a white-collar securities fraud case filed by federal authorities in Manhattan, according to data provided by a person familiar with the matter. In the 2004 securities fraud trial of Martha Stewart, for example, prosecutors presented 525,000 pages of evidence to the defense team, but the numbers have increased dramatically in recent years.
The variety and growing volume of material in the FTX case underscores the legal challenges facing Mr. Bankman-Fried, 31, who is charged with 13 criminal counts, including charges of misappropriating billions of dollars in client funds, defrauding investors and campaign finance violations. Laws. He has pleaded not guilty.
With a trial date set for October, prosecutors have collected evidence ranging from phones and laptops to the contents of Mr Bankman-Fried’s Google accounts, which amounted to just 2.5 million pages. At a hearing in March, Nicholas Ross, a federal prosecutor investigating FTX, said the government obtained a laptop computer filled with so much information that FBI technicians struggle to decrypt it all.
“It’s an enormous amount to sift through, and sometimes you can find incredibly useful information,” said Moira Pinza, a former federal prosecutor who is now in private practice. “It’s a real challenge.”
Usually, evidence in a criminal case is kept largely secret until just before trial. But in the case of Mr. Bankman-Fried, interviews and a review of recent court filings provided an early glimpse into the remarkable set of records FTX prosecutors have amassed.
The investigation began in November, after the FTX crash sent the cryptocurrency market into turmoil. Almost as soon as the exchange folded, prosecutors began collecting documents, sending subpoenas to FTX employees, and searching for records from political campaigns funded by Mr. Bankman-Fred.
The requests were often broad. Prosecutors wanted every document related to FTX and sent a group of data experts who took days to extract the information from a batch of devices, said one of the people who obtained the subpoena.
While much of what the plaintiffs have collected is typical corporate work fare, other materials point to the unusual personal dynamics at FTX.
Described as a diary, three people familiar with the matter said that it belonged to Mr. Bankman-Fried’s on-and-off girlfriend, Caroline Ellison, a former first lieutenant in his business empire.
Ms. Ellison, who was CEO of FTX’s sister company, hedge fund Alameda Research, also recorded remarks about Mr. Bankman-Fried in a series of electronic documents circulated among lawyers in the case, three people familiar with the matter. He said. At times, said a couple of people, Mrs. Ellison expressed personal and professional displeasure with Mr. Bankman-Fried.
Lawyers and representatives for Mr. Bankman-Fried and Ms. Ellison declined to comment or did not respond to requests for comment on evidence in the case. A spokesman for federal prosecutors in Manhattan declined to comment on the discovery process.
Ms. Ellison is expected to be a crucial witness. She has pleaded guilty to fraud charges with two senior executives, Gary Wang and Nishad Singh, and has agreed to cooperate with prosecutors hunting Mr. Bankman-Fried. In the days after FTX’s collapse, she admitted to Alameda employees that she, Mr. Bankman Fried, Mr. Wang, and Mr. Singh had used FTX clients’ funds to fill holes in Alameda’s accounts. She also dated Mr. Bankman Fried and lived with him in a penthouse in the Bahamas, where the stock exchange was located.
Ms. Pinza said that any personal writings she or other witnesses provide could be useful to defense counsel during cross-examination.
“The biggest risk with a cooperator is that the defense will be able to say here that she is cooperating to save herself from a long prison term,” she said. “But modern jurors are unlikely to take at face value testifying over a vendetta or failed romance.”
Many of FTX’s records, including emails, Slack messages and transaction records, were held by Sullivan & Cromwell, the law firm that took control of the exchange after declaring bankruptcy.
In a recent lawsuit, lawyers for Mr. Bankman-Fried argued that prosecutors relied on Sullivan and Cromwell to be their de facto agents in obtaining documents from the company. The lawyers alleged that by “outsourcing” this process to the firm, prosecutors were evading their legal responsibility to turn over potentially useful evidence to Mr Bankman-Fried’s defense team.
The detective work of Sullivan and Cromwell – which has submitted bills totaling $55 million to the bankruptcy court – has already proven useful for prosecutors. In a January lawsuit, Sullivan and Cromwell showed a snippet of FTX’s core codebase, showing a feature that allowed Alameda to borrow nearly unlimited amounts of money from the exchange.
In an email to Sullivan and Cromwell’s attorneys that month, Mr. Ross requested FTX transaction records for accounts owned by Mr. Bankman Fried, Ms. Ellison, Mr. Wang, Mr. Singh and two other people whose names have been redacted, according to court records. He also sought records of a group conversation on encrypted messaging app Signal, titled “Donation Processing,” in which FTX executives discussed campaign finance issues.
Prosecutors also seized evidence directly from executives in Bankman-Fried’s orbit. Last month, the FBI executed a search warrant on the $4 million Maryland home of Ryan Salame, a high-ranking FTX executive who donated tens of millions of dollars to Republican candidates, including George Santos, a congressman who was recently indicted for Long Island, New York.
Two people familiar with the matter said the agents took Mr. Salameh’s mobile phone as well as one belonging to his girlfriend, Michelle Bond, a crypto lobbyist. Bond unsuccessfully ran for Congress last year as a Republican in another Long Island district.
Throughout the year, prosecutors turned over their evidence to Mr. Bankman-Fried’s attorneys, a process known as discovery.
At the March hearing, Mr. Ross gave a detailed update on the process, explaining to the judge overseeing the case, Louis A. Kaplan, that the plaintiffs had obtained four laptops, including one so large it was difficult to analyze. Two people familiar with the matter said that this laptop belonged to Mr. Wang.
Lawyers for Mr. Wang, Mr. Salama and Ms. Bond did not respond to requests for comment.
Mr Ross also said the government had handed over to the defense team nearly a million documents obtained from witnesses and other third parties in the case.
“We’ve produced 927,000,” he said. “So that leaves, quick math, maybe 110,000.”
Judge Kaplan replied, “Reading before bed.”
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