Snippets of pc code. Greater than six million pages of emails, Slack messages and different digital information. And a small black pocket book, crammed with handwritten observations.
For months, federal prosecutors constructing the felony case towards the fallen cryptocurrency government Sam Bankman-Fried have assembled an unlimited and unusually different array of proof. The paperwork embody 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, based on knowledge offered by an individual with information of the matter. Within the 2004 securities fraud prosecution of Martha Stewart, for instance, prosecutors produced 525,000 pages of proof to the protection crew, however the numbers have elevated considerably lately.
The variety and rising quantity of supplies within the FTX case underscore the authorized challenges dealing with Mr. Bankman-Fried, 31, who’s charged with 13 felony counts, together with accusations that he misappropriated billions of {dollars} in buyer cash, defrauded traders 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, stated the federal government had obtained a laptop computer filled with a lot info that the F.B.I.’s technicians have been struggling to decipher all of it.
“It’s a huge quantity to sift via, and generally you will discover extremely helpful info,” stated Moira Penza, a former federal prosecutor who’s now in personal observe. “It’s a actual problem.”
Sometimes, the proof in a felony case stays largely secret till proper earlier than trial. However in Mr. Bankman-Fried’s case, interviews and a evaluation of latest courtroom filings have provided an early glimpse of the idiosyncratic array of information that the FTX prosecutors have collected.
The investigation started in November, after FTX’s collapse despatched the crypto market into turmoil. Virtually as quickly because the change folded, prosecutors began gathering paperwork, sending subpoenas to FTX staff and searching for information from the political campaigns that Mr. Bankman-Fried financed.
The requests have been usually broad. One one that bought a subpoena stated prosecutors had needed each doc associated to FTX and dispatched a gaggle of information consultants who took days to extract the data from a set of gadgets.
Whereas 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 conversant in the matter stated.
Ms. Ellison, who was chief government of FTX’s sister firm, the hedge fund Alameda Analysis, additionally recorded observations about Mr. Bankman-Fried in a collection of digital paperwork which have circulated amongst attorneys within the case, three folks with information of the matter stated. At instances, two of the folks stated, Ms. Ellison expressed private {and professional} resentment towards Mr. Bankman-Fried.
Attorneys 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 spokesman for federal prosecutors in Manhattan declined to touch upon the invention course of.
Ms. Ellison is predicted to be an important 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. Within the days 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 could be helpful to protection attorneys throughout cross-examination, Ms. Penza stated.
“The most important danger with a cooperator is the protection will have the ability to say right here she is cooperating to avoid wasting herself from a protracted jail time period,” she stated. “However trendy juries should not prone to take at face worth they’re testifying due to a vendetta or a failed romance.”
Lots of FTX’s company information, together with emails, Slack messages and transaction logs, have been held by Sullivan & Cromwell, the regulation agency that took management of the change after it declared chapter.
In a latest courtroom 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 potential useful proof to Mr. Bankman-Fried’s protection crew.
The detective work by Sullivan & Cromwell — which has submitted payments totaling $55 million to the chapter courtroom — is already proving helpful to prosecutors. In a January courtroom submitting, Sullivan & Cromwell displayed an excerpt from FTX’s underlying code base, exhibiting a function 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, based on courtroom information. He additionally sought information of a gaggle chat on the encrypted messaging app Sign, 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. Final month, the F.B.I. executed a search warrant on the $4 million Maryland residence 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 not too long ago indicted congressman from Lengthy Island, N.Y.
The brokers took Mr. Salame’s cell phone in addition to a telephone belonging to his girlfriend, Michelle Bond, a crypto lobbyist, two folks with information of the matter stated. Ms. Bond ran unsuccessfully for Congress final yr as a Republican in one other district on Lengthy Island.
All year long, prosecutors have been turning over their proof to Mr. Bankman-Fried’s attorneys, a course of often called discovery.
On the listening to in March, Mr. Roos gave an in depth replace on the method, explaining to the decide overseeing the case, Lewis A. Kaplan, that prosecutors had obtained 4 laptops, together with the gadget so giant that it was proving difficult to investigate. That laptop computer belonged to Mr. Wang, two folks with information of the matter stated.
Attorneys for Mr. Wang, Mr. Salame and Ms. Bond didn’t reply to requests for remark.
Mr. Roos additionally stated the federal government had handed over to the protection crew practically a million paperwork obtained from witnesses and different third events within the case.
“Now we have produced 927,000,” he stated. “In order that leaves, fast math, possibly 110,000.”
“Bedtime studying,” Decide Kaplan replied.
