Sam Bankman-Fried’s Request for a New Trial Denied as Judge Unleashes Cataract of Criticism at Jailed Mogul

The denial, “with prejudice,” by Judge Lewis Kaplan of a request for a new trial by the imprisoned crypto mogul Sam Bankman-Fried is yet another setback for the man who once bestrode American financial and political life like a colossus.Bankman-Fried is fighting for his freedom from behind bars at a federal prison in California after his conviction on seven counts of fraud and conspiracy. He contends that new witnesses have emerged whose testimony could make a difference to the question of his guilt. Bankman-Fried is not eligible for parole and was forced to return $11 billion. Bankman-Fried argues that his cryptocurrency exchange, FTX, was never insolvent — only that it faced liquidity challenges — and that all of its customers were paid back in full. Back-of-the-envelope calculations circulating online suggest that the portfolio Bankman-Fried assembled, which included investments in Anthropic and SpaceX, would today be worth $115 billion.Judge Kaplan in a scathing decision rejected the notion that new witnesses warranted a new trial and declared that the motion “appears to be one part of a plan to rescue his reputation that Bankman-Fried hatched and even committed to writing after FTX declared bankruptcy but before he was indicted.” Prosecutors allege that Bankman-Fried engineered “one of the biggest financial frauds in American history” by using customer deposits in FTX to cover losses at his hedge fund, Alameda Research, as well pay off loans and buy real estate.Judge Kaplan accuses Mr. Bankman-Fried of laundering a “wildly conspiratorial” theory that alleges his convictions were the products of “government threats and retaliation.” The judge reckons that account is “entirely contradicted by the record and that granting a new trial “would be a large waste of judicial resources as it could require another judge to familiarize himself or herself with an extensive and complicated record.”The judge dismissed Bankman-Fried’s claims as “inaccurate or misleading,” In startling language, Judge Kaplan criticized what he calls Bankman-Fried’s efforts to “come out” as a Republican and “against the woke agenda.” Bankman-Fried, in a telephone interview with The New York Sun from behind bars, leveled criticism at the Biden administration. He previously was a major donor to both Democrats and Republicans, though much of his publicized giving was to the left.Bankman-Fried’s motion took a strange route to being denied by Judge Kaplan. In February he filed the request for a new trial, formally known as a Rule 33 motion, as a pro se litigant, meaning without the benefit of an attorney. The actual submission, though, was performed by his mother, the legal academic Barbara Fried. Judge Kaplan asked Bankman-Fried who was responsible for the motion. A misrepresentation could amount to perjury.Bankman-Fried responded by explaining that his family — his father, Joseph Bankman, is also a legal academic — “made editorial and organizational suggestions, some of which I incorporated into the motion. They also helped print it, as I no longer had access to a word processor.” He also disclosed that he shared a draft of the motion with an attorney based at New York City, but that they had “no impact” on the submitted version. Bankman-Fried, following the barrage of questions from Judge Kaplan, moved to withdraw the motion “without prejudice to renewing it after my direct appeal and the related request for reassignment have been ruled upon.” Judge Kaplan, though, not only denied the request to withdraw the motion — he dismissed it “with prejudice,” meaning that it cannot be refiled.Judge Kaplan declared that the government’s opposition to Bankman-Fried’s motion was “so thorough, so well documented, and so well taken” that “it would suffice to express the Court’s substantial agreement with the government’s entire response and simply deny the motion.” Judge Kaplan ordered that his clerk mail a copy of his ruling to the Lompoc Federal Correctional Complex, where Bankman-Fried is incarcerated.Bankman-Fried has a separate appeal pending before the Second United States Appeals Circuit, which heard oral arguments in November. The circuit riders appeared skeptical of letting Bankman-Fried’s case be tried again. The circuit could issue its ruling at any time. Mrs. Bankman-Fried, who maintains a Substack where she shares thoughts about her son’s case — and occasionally posts excerpts from a journal he is keeping in prison — wrote that “Sam’s only crime was that he deliberately downplayed the financial risks to customers posed by those perfectly legal arrangements.” She added that his sentence “would appear not just unwarranted, but a sign of collective madness.”

Sam Bankman-Fried’s Request for a New Trial Denied as Judge Unleashes Cataract of Criticism at Jailed Mogul

Sam Bankman-Fried’s Request for a New Trial Denied as Judge Unleashes Cataract of Criticism at Jailed Mogul

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