Bankman-Fried heads to Brooklyn jail notorious for poor conditions

[August 14, 2023]  By Luc Cohen

NEW YORK (Reuters) - Sam Bankman-Fried will prepare for his fraud trial from a Brooklyn jail where inmates ranging from convicted sex trafficker Ghislaine Maxwell to Honduras' former president have complained of subpar conditions.

U.S. District Judge Lewis Kaplan in Manhattan ruled on Friday that Bankman-Fried, the founder of bankrupt cryptocurrency exchange FTX, must be jailed for tampering with witnesses while free on $250 million bond at his parents' home in Palo Alto, California.

Bankman-Fried, who has pleaded not guilty to fraud charges over FTX's collapse, will now be housed before his Oct. 2 trial in Brooklyn's Metropolitan Detention Center, a far cry from the luxurious Bahamas resort where he lived until his December 2022 arrest and extradition to the United States.

In recent years, MDC has been plagued by persistent staffing shortages, power outages and maggots in inmates' food. Earlier this year, a guard pleaded guilty to accepting bribes to smuggle in drugs. Public defenders have called conditions "inhumane."

In the winter of 2019, an electrical fire cut off the jail's lighting and heat for days as temperatures fell to near zero Fahrenheit (minus 18 Celsius).

Lawyers for Maxwell, who was convicted of recruiting and grooming teenage girls for abuse by the late financier and sex offender Jeffrey Epstein, said raw sewage seeped into her MDC cell. Her attorneys compared the "reprehensible and utterly inappropriate" conditions there to Hannibal Lecter's incarceration in the 1991 movie "The Silence of the Lambs", "despite the absence of the cage and plastic face guard."

They also cited "hyper-surveillance" by overbearing guards, a bad diet, and sleep deprivation.

Maxwell was sentenced last year to 20 years and is being held at a prison in Florida.

The U.S. Bureau of Prisons, which runs MDC, did not respond to a request for comment. The agency previously has said it is committed to the safety of inmates and staff, and that humane treatment of inmates is a top priority.

Former FTX Chief Executive Sam Bankman-Fried, who faces fraud charges over the collapse of the bankrupt cryptocurrency exchange, looks on outside the Manhattan federal court in New York City, U.S. March 30, 2023. REUTERS/David Dee Delgado/File Photo

Founded in 1994, MDC currently hosts 1,608 inmates. It is now the jail housing detainees awaiting federal trials in New York City, after the Manhattan Correctional Center closed in 2021 for improvements. Epstein killed himself in his MCC cell while awaiting trial on sex trafficking charges.

Bankman-Fried's lawyers had urged Kaplan not to jail the 31-year-old former billionaire, in part because a "staffing crisis" at MDC meant there would be too few guards to escort him to a room where he could access computers to review prosecutors' evidence against him.

Kaplan said during the hearing that while MDC "is not on anybody's list of five star facilities," he was not sure whether housing Bankman-Fried at a minimum security jail in Putnam County, about 50 miles (80 km) north of New York City, as prosecutors had requested, was "doable."

It is not Bankman-Fried's first time behind bars. In the Bahamas, he was held for nearly a week at the Fox Hill Prison, which a 2021 U.S. State Department report said was plagued by rodents and a lack of toilets. Local authorities said in December conditions had improved.

Other high-profile inmates currently being held at MDC include Juan Orlando Hernandez, the former president of Honduras who has pleaded not guilty to drug trafficking charges, and Guo Wengui, an exiled Chinese businessman who has pleaded not guilty to fraud charges.

Hernandez' lawyers have likened his confinement conditions to those of a "prisoner of war." Guo's lawyers in March called MDC "an extraordinarily dangerous environment," citing a recent lockdown in response to an increase in contraband including weapons.

(Reporting by Luc Cohen in New York; Editing by Noeleen Walder and Daniel Wallis)

[© 2023 Thomson Reuters. All rights reserved.]This material may not be published, broadcast, rewritten or redistributed.  Thompson Reuters is solely responsible for this content.