Judge denies motion to dismiss most charges against Sam Bankman-Fried

Quick Take

  • The federal judge presiding over Sam Bankman-Fried’s case denied a motion from his defense team to dismiss most of the charges filed against the FTX co-founder.

A federal judge denied Sam Bankman-Fried's motion to dismiss or sever most of the criminal charges he faces.

The disgraced FTX co-founder's lawyers asked Judge Lewis Kaplan of the U.S. District Court for the Southern District of New York last month to dismiss most of the charges Bankman-Fried faces, in part arguing that some violated laws against charging a defendant with the same crime twice.

In a response on Tuesday, Kaplan denied the motions, calling them "moot or without merit."

Bankman-Fried faces over 100 years in prison if convicted and given maximum sentence on all counts, including fraud-related charges regarding allegations that he and other FTX executives used billions in customer assets to make their own failed investments. He is currently under house arrest, confined to his parents' home.

The criminal trial is currently scheduled for October, though Bankman-Fried's lawyers have also requested a delay in that proceeding.

Details of denial

Bankman-Fried asked Kaplan to toss fraud charges related to his alleged use of FTX customer assets to backstop his own investments through Alameda Research, which he also owns, on the grounds that customers did not see an "economic loss" from the alleged fraud, and that he planned to pay back customer accounts. 

"The defendant is wrong both factually and as a matter of law," Kaplan wrote in his rejection of Bankman-Fried's request to dismiss those charges. Kaplan cited the multibillion dollar hole that Alameda had on its balance sheet, and the government's argument that Bankman-Fried had no viable way of paying that back to customers, as grounds for economic loss necessary for a fraud charge. Kaplan also noted that it does not matter if Bankman-Fried intended to pay customers back after allegedly lying to and stealing from them, writing that the argument, "is immaterial" under the law.

Bankman-Fried's legal team also requested that additional charges brought since the FTX owner's extradition from The Bahamas be thrown out because they were not among the original charges under which the Bahamian government arrested Bankman-Fried on behalf of the U.S., and that bringing additional charges violates the extradition treaty between the two countries.

Kaplan rejected that argument on the grounds that the Bahamian government, not Bankman-Fried's lawyers, had the grounds to object over possible violation of a treaty made between two countries. Lawyers for the FTX owner argued that the additional charges, including an allegation of illegal campaign contributions, violate the extradition treaty between the U.S. and Bahamian governments.

U.S. officials say they will drop the campaign finance charge if the Bahamian government objects to it, because the charge wasn't listed in the extradition request made to The Bahamas. But they've also asked the Bahamian government for a special waiver to continue to pursue that charge.

Writing in a 41 page decision, Kaplan was also unsympathetic to arguments that the U.S. can't bring a charge related to alleged conspiracy to bribe at least one Chinese official or an allegation that FTX ran an unlicensed money service business in the U.S.

UPDATE: With additional details of Kaplan's denial.

Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.

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