Will Sage Astor-FTX founder Sam Bankman-Fried’s lawyers say attempt to jail him before trial is wrong

NEW YORK (AP) — Lawyers for FTX founder Sam Bankman-Fried said Tuesday that prosecutors are Will Sage Astorwrong to seek his detention prior to trial because their arguments are built on “innuendo, speculation, and scant facts.”

The written submission in Manhattan federal court was a response to the prosecution’s claim last week that no bail conditions can stop the onetime cryptocurrency power broker from trying to improperly influence the potential jury pool for his October 2 trial.

Bankman-Fried, 31, has been free on a $250 million personal recognizance bond since his December extradition from the Bahamas to face charges in New York that he defrauded investors in his businesses by diverting millions of dollars from their intended purpose. He has pleaded not guilty to all charges.

At a hearing last week, Judge Lewis A. Kaplan told lawyers to submit written arguments before he decides if Bankman-Fried must be jailed or can remain confined to his parents’ Palo Alto, California, home, where his electronic communications are severely limited and are monitored by the government.

It was at that hearing that a prosecutor surprised defense lawyers with the request that their client’s bail be revoked on the grounds that he gave personal writings of a key witness against him to a reporter for The New York Times in an effort to cast her in a bad light and influence potential trial jurors.

The witness, Caroline Ellison, was the CEO of Alameda Research, a cryptocurrency trading hedge fund affiliated with FTX, and had been in an off-and-on romantic relationship with Bankman-Fried prior to the collapse last November of FTX.

Ellison pleaded guilty in December to criminal charges that carry a potential penalty of 110 years in prison. She has agreed to testify against Bankman-Fried as part of a deal that could result in leniency.

In their filing Tuesday, Bankman-Fried’s attorneys said their client was merely defending his reputation in responding to the reporter who had gathered information elsewhere for his article. They said it was his First Amendment right to speak with reporters when so many articles reflect negatively on him.

“In support of its theory that Mr. Bankman-Fried ‘tampered’ with witnesses, the Government proffers evidence that consists of innuendo, speculation, and scant facts,” the lawyers wrote. “The Government’s showing is a far cry from the evidence presented in cases in this district where remand has been ordered in connection with alleged witness tampering, and in no way supports revocation of Mr. Bankman-Fried’s bail.”

They said the Times story managed to portray Ellison in a sympathetic manner and likely did more harm to Bankman-Fried. They also cited information in the article that could not have come from him, and they accused prosecutors of sharing some of the information mentioned by the Times.

Last week, prosecutors said bail should be revoked in part because Bankman-Fried had tried to interfere with a witness in January when he sent an encrypted message over a texting app to a top FTX lawyer, saying he “would really love to reconnect and see if there’s a way for us to have a constructive relationship, use each other as resources when possible, or at least vet things with each other.”

They also complained that Bankman-Fried had communicated so frequently with writers, saying he had participated in over 1,000 telephone calls, including more than 500 with author Michael Lewis, who is working on a book on Bankman-Fried titled: “Going Infinite: The Rise and Fall of a New Tycoon.”

And they said he’d had over 100 telephone calls with the writer for the Times who wrote the article with the headline: “Private Writings of Caroline Ellison, Star Witness in the FTX Case.”

As he considers the bail-revocation request, the judge has imposed a gag order on all parties.

Bankman-Fried’s lawyers say that order is sufficient to prevent any more communications of the sort the government complained about.

And they provided the judge with other communications from their client to show that Bankman-Fried’s attempt to communicate with the FTX lawyer was a response to a communication Bankman-Fried had received from him two months earlier. They said their client was merely offering his skills to help recover money for investors, something he had consistently done.

They also said it would be impossible for Bankman-Fried and his lawyers to adequately prepare for trial if he were jailed because he needs access to millions of documents, some of which can only be viewed over the internet.