Sam Bankman-Fried's father, ex-Trump staffer among possible trial
witnesses
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[October 04, 2023]
By Jody Godoy and Luc Cohen
NEW YORK (Reuters) -Sam Bankman-Fried's father and brother, as well as
Donald Trump's former spokesman Anthony Scaramucci, are among possible
witnesses at the cryptocurrency exchange founder's fraud trial,
according to a list read by a prosecutor in court on Tuesday.
Scaramucci, Bankman-Fried's father Joseph Bankman and his brother
Gabriel Bankman-Fried were on a list of potential witnesses prosecutor
Danielle Sassoon read in court during jury selection at the outset of
Bankman-Fried's trial in order to see if any prospective jurors knew
them.
The list included both proposed prosecution and defense witnesses, and
there is no guarantee that those named will testify.
The trial, which is expected to last about six weeks, comes nearly a
year after FTX's collapse shocked markets and tattered Bankan-Fried's
reputation. Selection of the panel of 12 jurors and six alternates is
set to continue on Wednesday, followed by opening statements.
Federal prosecutors say Bankman-Fried embezzled from customers at his
FTX cryptocurrency exchange since its founding in 2019 until its
November 2022 bankruptcy in order to prop up his hedge fund Alameda
Research, buy luxury properties and donate more than $100 million to
U.S. political candidates.
Bankman-Fried has pleaded not guilty to seven counts of fraud and
conspiracy. He has acknowledged inadequate risk management, but denied
stealing funds. His lawyers have signaled in court papers they plan to
argue that FTX's treatment of customer funds was proper, and that others
at FTX and Alameda bore the bulk of the blame for their failure.
The defendant's parents - Bankman and Barbara Fried, both Stanford Law
School professors - were sued last month by FTX's current management,
which accused them of using company funds to enrich themselves. Lawyers
for Bankman and Fried called the accusations "completely false."
Scaramucci served briefly as White House communications director during
Trump's administration. His investment firm, SkyBridge Capital, once
owned a stake in FTX.
U.S. District Judge Lewis Kaplan selected a pool of nearly 50 qualified
jurors on Tuesday, after dismissing several who had personal or
professional obligations or otherwise thought they could not be fair.
That included one man who said he and his brother each lost money
through cryptocurrency investments.
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Sam Bankman-Fried sits beside his defense lawyer Christian Everdell
on the first day of his fraud trial over the collapse of FTX, the
bankrupt cryptocurrency exchange, at Federal Court in New York City,
U.S., October 3, 2023 in this courtroom sketch. REUTERS/Jane
Rosenberg
"It almost financially ruined him," said the man. When Kaplan asked
if the man could nonetheless be fair, he responded, "I really want
to believe that I could, but to be perfectly honest I believe that
it would affect me."
BANKMAN-FRIED NOT OFFERED PLEA DEAL
At the outset of proceedings, Kaplan told Bankman-Fried in open
court that it would ultimately be his decision whether to testify in
his own defense, and asked Bankman-Fried whether he understood.
"Yes," the 31-year-old former billionaire replied. He was dressed in
a suit and striped tie, with his once signature curly, unkempt hair
cut into a neater trim.
Prosecutor Nicolas Roos said the two sides never engaged in talks
about a potential plea deal and no such offer was made to Bankman-Fried.
Three former members of Bankman-Fried's inner circle - Alameda
co-chief Caroline Ellison and former FTX executives Gary Wang and
Nishad Singh - reached plea deals with the U.S. Attorney's office in
Manhattan and are set to testify against him.
The jury may also hear from former FTX lawyers Daniel Friedberg and
Ryne Miller, former FTX chief operating officer Constance Wang,
former Alameda co-chief Sam Trabucco and Ryan Salame, the former
chief of FTX's Bahamian subsidiary, according to the list Sassoon
read in court.
Salame last month pleaded guilty to conspiracy charges but did not
agree to cooperate.
Bankman-Fried has been detained since Aug. 11, after the judge found
he had likely engaged in witness tampering - including by sharing
Ellison's personal writings with a reporter. Ellison and Bankman-Fried
are former romantic partners.
(Reporting by Jody Godoy and Luc Cohen in New YorkEditing by Amy
Stevens, Lincoln Feast, Nick Zieminski and Matthew Lewis)
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