Based on a court document issued by the Southern District of New York, the Department of Justice (DOJ) dismissed a campaign financing charge against notorious former crypto mogul Sam Bankman-Fried (SBF) on Wednesday night.
According to The New York Times, authorities claim that SBF, the co-founder of the now-bankrupt cryptocurrency exchange FTX, and its affiliates used consumer deposits to donate $90 million to about 300 candidates or political action organizations. According to the DOJ’s letter to the New York court, the Bahamas had no intention of extraditing SBF to the United States on the basis of the charge, therefore the DOJ decided not to pursue it.
The letter reads, “The Bahamas informed the United States earlier today that The Bahamas did not intend to extradite the defendant on the basis of campaign contributions.” As a result, the government “Accordingly, in keeping with its treaty obligations to The Bahamas, the Government does not intend to proceed to trial on the campaign contributions count.”
The Washington Post’s review of Federal Election Commission data revealed that SBF gave about $39 million to Democrat-aligned causes, making it the second-highest individual donor to those organizations throughout the 2022 midterm election period.
When FTX failed in December, the Bahamas swiftly deported SBF to the United States, according to the NYT. According to NPR, he is now imprisoned at his parents’ California home under a $250 million bond.
On Wednesday, prosecutors asked a federal judge to remand him in custody until his October trial, reported NPR. As reported by CNN Business, the judge issued a gag order on SBF for allegedly tampering with witnesses by disclosing the diary entries of Caroline Ellison, his ex-girlfriend and business partner at FTX.
On Thursday, the Associated Press reported:
“In an indictment, prosecutors said Bankman-Fried made the contributions to improve his personal standing in Washington, D.C., to increase FTX’s profile and to “curry favor with candidates” who might help pass legislation favorable to FTX, including legislation concerning regulatory oversight over FTX and its industry.”
The indictment said Bankman-Fried became one of the largest publicly reported political donors to the 2022 midterm elections as he caused substantial contributions to be made in support of candidates to Democrats and Republicans, and across the political spectrum.
“Bankman-Fried, however, did not want to be known as a left-leaning partisan, or to have his name publicly attached to Republican candidates,” prosecutors wrote.
Michael Zweiback, a Los Angeles criminal defense attorney and a former federal prosecutor who once headed the Cyber & Intellectual Property Crimes Section in California’s Central District, said the prosecution’s withdrawal of the campaign finance charge will not stop them from introducing facts pertaining to it at trial.
“That evidence is not excluded just because the charges have been dismissed,” he said. “The evidence of the systematic campaign donations are all part and parcel of describing the nature of the fraudulent scheme and therefore would be admissible.”
Zweiback said the dropping of the charge from the October trial and a related charge in a superseding indictment that could go to trial next year “will not impact the case” — or the more serious charges that led U.S. Attorney Damian Williams in New York to call it one of the largest financial crimes in history.
He said campaign finance evidence will likely be used to show the jury how Bankman-Fried planned to “continue his grip on the industry.” Zweiback added that they’ll want to show jurors that his plans included soliciting “favor and influence with politicians.”
In February we reported that “News media sources who want to expose the mysterious people who bailed FTX CEO Sam Bankman-Fried out of jail are one step closer to getting their big story after a US judge ruled in their favor to get information that someone is trying to keep hidden.”
News of the ruling comes at the same time there is an elevated understanding of the corrupt nature of Bankman-Fried’s work with his failed cryptocurrency agency, according to Independent Media:
“A FILING IN FTX’s bankruptcy proceedings is shedding light on the true extent of the crypto-trading powerhouse’s influence-peddling operation. Last week, FTX filed its creditor matrix, a document that lists former vendors and investors to the company,” the Intercept reported, adding:
“The list includes nearly a dozen public relations experts — specialists who generate positive spin in the media on behalf of clients — as well as political consultants, think tanks, and trade groups.
Sometimes, the money went directly to political operations; Majority Forward, a dark-money group designed to elect Senate Democrats, received cash. In some cases, the hired guns, such as PR firms, were paid directly for their services. In others, the groups that received donations maintain that they are independent, but had interests aligned with FTX.
The filing, for instance, listed a donation to the Center for a New American Security, a prominent national security-focused think tank in Washington, D.C., that has worked to shape crypto regulations.”
The move by the judge to grant the news media request to find out who bailed the FTX kid out of prison, comes after previously keeping the names redacted.
SBF’s attorney tried to keep the names anonymous after the donors signed a $500,000 and $200,000 bond to spring him from jail.
SBF’s parents also co-signed a $250 million bond for their indicted son.
The judge ruled the names should be released by February 7th, acknowledging that his ruling is likely to be appealed.
Breitbart.com reported with more details:
A U.S. judge said on Monday that the names of the two people who bailed disgraced FTX CEO and Democrat super donor Sam Bankman-Fried out of jail should be made public. The move comes after Bankman-Fried’s lawyers tried to keep the names of those who paid his bail anonymous.
While U.S. District Judge Lewis Kaplan has ruled in favor of disclosing the names, he has put his ruling on hold pending an expected appeal, according to a report by Reuters.
The judge said that the public’s “weak” right to know who bailed the disgraced cryptocurrency exchange founder out of jail outweighed Bankman-Fried’s arguments for confidentiality, as well as the claim that the safety of his guarantors would be in jeopardy.