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The campaign finance charge was dropped from the case against Sam Bankman-Fried

NEW YORK (AP) – Founder of FTX Sam Bankman-Fried He will no longer face a campaign finance charge in an October criminal trial, federal prosecutors say, citing a decision by Bahamian authorities to dismiss a count of the charge that was not included in the warrant against him when was extradited to the United States in december

Prosecutors told U.S. District Judge Lewis A. Kaplan in a letter the Bahamas government notified him Wednesday that authorities there did not consider the charge to be included in Bankman-Fried’s extradition . So, prosecutors wrote, they would not pursue it at trial, in accordance with US treaty obligations with the Bahamas.

Bankman-Fried, 31, has been confined to her parents’ home in Palo Alto, Calif., as part of a $250 million bail package that prosecutors received Wednesday. asked a judge to overturn it. Prosecutors say his extensive media contact demonstrates an effort to sway the jury pool. His lawyers deny it. The judge has imposed a gag rule while he decides the issue.

The man once seen as a crypto guru has pleaded not guilty to charges that he defrauded investors and looted FTX customers’ deposits to fund lavish lifestyles for some of those who helped his spectacular rise to the top of cryptocurrency. FTX went bankrupt in November when the global stock market ran out of money after the equivalent of a bank run.

In early May, Bankman-Fried’s lawyers asked to dismiss one count of conspiracy to defraud the United States and violate campaign finance laws, the eighth count in the original indictment against him, saying he did not he was included in a “Surrender Order” outlining the other seven charges he would face in the US

They said allowing the indictment to proceed against him would set a “relevant precedent that would allow prosecutors to engage in a bait-and-switch” in which they get a defendant extradited by including charges they know the state extradition would approve, only to add charges at a late date that would likely be dismissed.

The charge, which carries a potential of up to five years in prison upon conviction, relates to the government’s claim that Bankman-Fried allowed more than $100 million to be diverted from Alameda Research to fund more than 300 political contributions that were illegal because they were made in the name of straw donors or came from corporate funds.

In an indictment, prosecutors said Bankman-Fried made the contributions to improve her personal standing in Washington, D.C., to raise FTX’s profile and to “gain favor with candidates” who could help pass favorable legislation. to FTX, including legislation relating to regulatory oversight of FTX. and its industry.

The indictment said Bankman-Fried became one of the largest publicly reported political donors in the 2022 midterm elections, causing substantial contributions to be made in support of Democratic and Republican candidates and across the spectrum politician.

“Bankman-Fried, however, did not want to be known as a leftist supporter, or to have her name publicly attached to Republican candidates,” prosecutors wrote.

Michael Zweiback, a Los Angeles criminal defense attorney and former federal prosecutor who led the Cybercrime and Intellectual Property Section in the Central District of California, said the prosecution’s withdrawal of the charge of campaign finance will not prevent them from presenting facts relating to the trial. .

“That evidence is not excluded just because the charges have been dismissed,” he said. “Evidence of systematic campaign donations is part of the description of the nature of the fraudulent scheme and would therefore be admissible.”

Zweiback said the withdrawal of the charge from the October trial and a related charge in a superseding indictment that could go to trial next year “will not affect the case,” or the more serious charges brought by prosecutors American Damian Williams in New York to call. it is one of the biggest financial crimes in history.

He said campaign finance evidence will likely be used to show the jury how Bankman-Fried planned to “continue control of the industry.” Zweiback added that they will want to show jurors that their plans included soliciting “favor and influence with politicians.”


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