FTX Bankman-Fried Order Extended As Judge Questions VPN Use and Laptops of Parents
SDNY COURTHOUSE, Feb 16 – Sam Bankman-Fried of FTX was indicted in the U.S. District Court for the Southern District of New York, leading to his arrest in the Bahamas on December 12, and extradition to the US on December 21. He was released on $250 million bond - and reappeared on January 3, see below - with the requirement of co-signers.
But he wanted them secret: "LETTER MOTION addressed to Judge Lewis A. Kaplan from Mark S. Cohen dated January 3, 2023 re: Request to Redact Names and Identifying Information for Certain Bail Sureties . Document filed by Samuel Bankman-Fried. (Cohen, Mark)." Six page letter on Patreon here -
Inner City Press nearly immediately opposed, here.
Unsealed below: Larry Kramer and
On February 16, Judge Kaplan held a proceeding on the bond conditions and Inner City Press live tweeted it here:
OK - Sam Bankman-Fried is in Judge Kaplan's courtroom, 8 minutes early, rubbing the outside of his nose. Now the prosecutors have walked in. One nodded to Bankman-Fried's lawyer; none acknowledged Bankman-Fried.
Now, after a whispered discussion with the prosecutors, Bankman-Fried's lawyer comes and whispers into his ear.
Judge Kaplan: Mr. Roos, are you going to do the honors of starting this afternoon?
AUSA: Yes. With the discovery of the defendant's use of a VPN, we propose to broaden the conditions. The case involves a business that was reliant on the Internet
AUSA Roos: Defendant was using auto-delete on Signal, and de-emphasizing e-mail. There are still wallets out there. In this case, in at least 2 instance, funds have moved that belonged to the estate or debtor. In January, several Alameda wallets were accessed
AUSA: There was been witness tampering and obstruction of justice. Now there's use of a VPN. We have to move beyond the wackamole approach. We need a clear rule about defendant's use of devices and the Internet. Judge Kaplan: You're putting a lot of trust in him
AUSA Roos: We are mindful of defendant's First Amendment rights -- Judge Kaplan: Are you claiming there is a Constitutional right, once charged, to access the Internet? AUSA Roos: We are proposing restrictions. Judge Kaplan: There are pre-trial defendants detained
Judge Kaplan: Detained defendant still prepare their defense without the Internet. What is unique about this defendant? AUSA Roos: OK, what about access to discovery?
Judge Kaplan: Let's get into that. Where is the database?
AUSA: In the Cloud. It's read-only
[Note: Detained defendants see their discovery info on air-gapped laptops in the jail.] Judge Kaplan: You could show him the database on a device without the ability of communication. AUSA Roos: I haven't had that conversation. It would be a suitcase sized server
AUSA Roos: The FTX debtor is concerned about turning over a database like this -- Judge Kaplan: A duplicate could be created. Let's get on. AUSA Roos: We proposed pen registers and computer monitoring that Pre-Trial Services has, for laptops and cell phones
Judge Kaplan: Would it be fair to assume that the parents have devices? AUSA Roos: We are not sure -- Judge Kaplan: They are Stanford Law professors. AUSA Roos: There's no solution. Judge Kaplan: Oh but there is one...
Judge Kaplan: We have a person who alleged committed a Federal felony while on pre-trial release - witness tampering. AUSA Roos: We think that living with his parent keeps him from being unsupervised. Judge Kaplan: Anything else?
SBF's lawyer Cohen: Our client couldn't use Google Docs, or Microsoft Word or computational programs, could not Zoom with witnesses [Note: Avi Eisenberg, detained at demand of this same US Attorney's Office, can't do any of those things. No talk of First Amendment
Judge Kaplan: Your client is at liberty on extraordinary conditions, I mean not Draconian, but liberal conditions. Moreover, the onus is on you to establish to my satisfaction that any conditions I impose would be complied with, so the community would be protected
SBF's Cohen: Watching the Super Bowl wasn't an attempt to get around the Court's conditions -- Judge Kaplan: Let's talk about that. There is one person in this room who knew it violated: your client. Cohen: People in his generation... We are proposing conditions
SBF's lawyer Everdell: The order spoke of ephemeral or encrypted apps --
Judge Kaplan: I am aware. That's why I qualified it. Why was he watching the Super Bowl on a VPN when it's on free TV for everyone? He was making it appear he was outside of the US.
SBF's Cohen: Last time, your Honor, you had a great line about Mary Queen of Scots -- Judge Kaplan: What about the defense bearing the cost of a consultant to advise me on technology? Cohen: We will look right into it. Judge Kaplan: What about the other devices?
Cohen: He is living with his parents so he can be watched. We can come back to the court on the issue of a consultant for the court. We can come back with a letter --
sultant by early next week, Tuesday, & I'll extend the order Judge Kaplan: I'll extend the order and await your letters, end of next week. It's always a pleasure to deal with professionals on both sides. Adjourned.
On January 30, Judge Kaplan granted the motion to unseal - but stayed the order until February 7 to allow for an appeal. Inner City Press (Matthew Russell Lee, intervenor pro se) unloaded the order to DocumentCloud here
At 2 pm on February 7, Bankman-Fried's lawyers filed notice of their appeal to the Second Circuit, to (try to) keep the names secret.
But on February 15, Judge Kramer ordered unsealing: "ORDER as to Samuel Bankman-Fried, Zixiao (Gary) Wang, Caroline Ellison. On January 30, 2023, the Court issued an order granting the motions of several news organizations to unseal the names of defendant's non-parental bail sureties. (Dkt 57) Given the novelty of the question presented and the likelihood of appeal, the Court stayed the order "until 5 p.m. on February 7, 2023 and, if a notice of appeal from th[at] order [was] filed by then, until February 14, 2023 at 5 p.m. in order to permit an application for a further stay to be made to the Court of Appeals should any adversely affected party wish to file one." (Dkt 57, at 12.) On February 7, 2023, Defendant timely filed a notice of appeal from the January 30, 2023 Order. As of today, however, no application for a further stay has been made to the Court of Appeals. Accordingly, the Clerk shall file on the unrestricted public record complete copies of the redacted bonds previously docketed as Dkt 55 and 56. SO ORDERED. (Signed by Judge Lewis A. Kaplan on 2/15/2023)."
Inner City Press published that - and then the two names: Larry Kramer, former dean of Stanford Law, and Andreas Paepcke of Stanford InfoLab, photos here and here. More below…
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