Snippets of laptop code. More than six million pages of emails, Slack messages and different digital data. And a small black pocket book, crammed with handwritten observations.
For months, federal prosecutors constructing the prison case towards the fallen cryptocurrency government Sam Bankman-Fried have assembled a huge and unusually diverse array of proof. The paperwork embrace crypto transaction logs and encrypted group chats from Mr. Bankman-Fried’s collapsed change, FTX, in addition to strikingly private reflections recorded by a key witness within the case.
The mountain of proof ranks among the many largest ever collected in a white-collar securities fraud case prosecuted by the federal authorities in Manhattan, in line with knowledge offered by a particular person with information of the matter. In the 2004 securities fraud prosecution of Martha Stewart, for instance, prosecutors produced 525,000 pages of proof to the protection staff, however the numbers have elevated considerably in recent times.
The variety and rising quantity of supplies within the FTX case underscore the authorized challenges going through Mr. Bankman-Fried, 31, who’s charged with 13 prison counts, together with accusations that he misappropriated billions of {dollars} in buyer cash, defrauded buyers and violated marketing campaign finance legal guidelines. He has pleaded not responsible.
With the trial set for October, prosecutors have gathered proof starting from telephones and laptops to the contents of Mr. Bankman-Fried’s Google accounts, which amounted to 2.5 million pages alone. At a listening to in March, Nicolas Roos, a federal prosecutor investigating FTX, mentioned the federal government had obtained a laptop computer filled with a lot info that the FBI’s technicians have been struggling to decipher all of it.
“It is a huge quantity to sift via, and generally you could find extremely helpful info,” mentioned Moira Penza, a former federal prosecutor who’s now in non-public observe. “It is a actual problem.”
Typically, the proof in a prison case stays largely secret till proper earlier than trial. But in Mr. Bankman-Fried’s case, interviews and a overview of current court docket filings have supplied an early glimpse of the idiosyncratic array of data that the FTX prosecutors have collected.
The investigation started in November, after FTX’s collapse despatched the crypto market into turmoil. Almost as quickly because the change folded, prosecutors began gathering paperwork, sending subpoenas to FTX staff and searching for data from the political campaigns that Mr. Bankman-Fried financed.
The requests have been usually broad. One one who received a subpoena mentioned prosecutors wished each doc associated to FTX and dispatched a group of knowledge consultants who took days to extract the knowledge from a set of units.
While a lot of what prosecutors have gathered is typical company fare, different materials factors to the weird private dynamics at FTX.
The black pocket book, described as a diary, belonged to Mr. Bankman-Fried’s on-and-off girlfriend, Caroline Ellison, a former high lieutenant in his enterprise empire, three folks acquainted with the matter mentioned.
Ms. Ellison, who was chief government of FTX’s sister firm, the hedge fund Alameda Research, additionally recorded observations about Mr. Bankman-Fried in a sequence of digital paperwork which have circulated amongst attorneys within the case, three folks with information of the matter mentioned. At occasions, two of the folks mentioned, Ms. Ellison expressed private and skilled resentment in direction of Mr. Bankman-Fried.
Lawyers and representatives for Mr. Bankman-Fried and Ms. Ellison both declined to remark or didn’t reply to requests for touch upon the proof within the case. A spokesperson for federal prosecutors in Manhattan declined to touch upon the invention course of.
Ms. Ellison is predicted to be a essential witness. She has pleaded responsible to fraud expenses together with two different high executives, Gary Wang and Nishad Singh, and agreed to cooperate with the prosecutors pursuing Mr. Bankman-Fried. In the times after FTX collapsed, she confessed to Alameda staff that she, Mr. Bankman-Fried, Mr. Wang and Mr. Singh had used FTX buyer funds to fill holes in Alameda’s accounts. She additionally dated Mr. Bankman-Fried and lived with him in a penthouse within the Bahamas, the place the change was primarily based.
Any private writings from her or different witnesses is perhaps helpful to protection attorneys throughout cross-examination, Ms. Penza mentioned.
“The greatest threat with a cooperator is that the protection will have the ability to say right here she is cooperating to save lots of herself from a lengthy jail time period,” she mentioned. “But trendy juries should not prone to take at face worth they’re testifying as a result of of a vendetta or a failed romance.”
Many of FTX’s company data, together with emails, Slack messages and transaction logs, have been held by Sullivan & Cromwell, the legislation agency that took management of the change after it declared chapter.
In a current court docket submitting, Mr. Bankman-Fried’s attorneys argued that the prosecutors had relied on Sullivan & Cromwell to function their de facto agent in acquiring paperwork from the corporate. The attorneys claimed that by “outsourcing” this course of to the agency, prosecutors have been avoiding their obligation to show over probably useful proof to Mr. Bankman-Fried’s protection staff.
The detective work by Sullivan & Cromwell — which has submitted payments totaling $55 million to the chapter court docket — is already proving helpful to prosecutors. In a January court docket submitting, Sullivan & Cromwell displayed an excerpt from FTX’s underlying code base, displaying a characteristic that allowed Alameda to borrow nearly limitless quantities of cash from the change.
In an electronic mail to Sullivan & Cromwell attorneys that month, Mr. Roos requested FTX transaction logs for accounts owned by Mr. Bankman-Fried, Ms. Ellison, Mr. Wang, Mr. Singh and two different folks, whose names have been redacted, in line with court docket data. He additionally sought data of a group chat on the encrypted messaging app Signal, titled “Donation Processing,” the place FTX executives mentioned marketing campaign finance issues.
Prosecutors have additionally seized proof straight from executives in Mr. Bankman-Fried’s orbit. Last month, the FBI executed a search warrant on the $4 million Maryland house of Ryan Salame, a high-ranking FTX government who donated tens of hundreds of thousands of {dollars} to Republican candidates, together with George Santos, the lately indicted congressman from Long Island, NY.
The brokers took Mr. Salame’s cell phone in addition to a cellphone belonging to his girlfriend, Michelle Bond, a crypto lobbyist, two folks with information of the matter mentioned. Ms. Bond ran unsuccessfully for Congress final 12 months as a Republican in one other district on Long Island.
Throughout the 12 months, prosecutors have been turning over their proof to Mr. Bankman-Fried’s attorneys, a course of generally known as discovery.
At the listening to in March, Mr. Roos gave a detailed replace on the method, explaining to the choose overseeing the case, Lewis A. Kaplan, that prosecutors had obtained 4 laptops, together with the machine so giant that it was proving difficult to research. That laptop computer belonged to Mr. Wang, two folks with information of the matter mentioned.
Lawyers for Mr. Wang, Mr. Salame and Ms. Bond didn’t reply to requests for remark.
Mr. Roos additionally mentioned the federal government had handed over to the protection staff practically a million paperwork obtained from witnesses and different third events within the case.
“We have produced 927,000,” he mentioned. “So that leaves, fast math, possibly 110,000.”
“Bedtime studying,” Judge Kaplan replied.