And now, the main event…

Nearly two years to the day since Sam Bankman-Fried was sentenced to a quarter-century in prison for fraud and conspiracy over the collapse of FTX, the former crypto wunderkind is still fighting for his freedom. Sam continues to insist that Lewis A. Kaplan, the federal judge in his 2023 criminal trial, was “one-sided” in his handling of the case—arguing in his appeal that it was clear Kaplan “did not like” Sam, “didn’t like his demeanor,” and was “coaching the prosecution on an argument to make.” The Second Circuit has yet to rule on his lawyers’ demand for a new trial with a different judge presiding.

Judge Kaplan’s supposed bias against Sam came up again last month, when Sam filed a pro se legal brief from his jail cell in Southern California. Sam asked for a new trial in New York and likewise requested that Kaplan be replaced if a new trial were granted. Referring to himself in the third person, Sam wrote that because Kaplan had displayed “many instances of extreme prejudice against Mr. Bankman-Fried,” he should recuse himself from weighing in on the request for a new trial and a new judge.

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Now, the feud has also ensnared Sam’s mother, Barbara Fried, a law professor emerita at Stanford who once clerked for federal judge J. Edward Lumbard. A few weeks ago, I reported that Barbara was “breaking her silence” on the case essentially because she believes that, as Sam’s mother, she should come to his defense—makes sense—and because others seem to have dropped the ball. She has begun writing on Substack about Sam’s various legal gambits, such as trying to get a new trial, a victory in the court of appeals, or even a Trump pardon.

On March 11, the Department of Justice responded to Sam’s request for a do-over with a merciless rejoinder, calling his appeal “insincere” and comparing him to a “bank robber.” Barbara wrote to the judge the very next day.

In her letter to Kaplan, Barbara described herself as “the holder of power of attorney” for Sam and asked for more time to rebut the D.O.J. brief. “In addition to being currently incarcerated,” she wrote, “without access to any word processing capabilities or most of his own files, he is being relocated”—apparently to Lompoc federal prison, about 175 miles northwest of Los Angeles—“from Terminal Island sometime in the next couple of weeks. While in transit, he will be out of contact with the outside world for some period of time that is hard to predict at this point.” She asked Judge Kaplan to give Sam until at least April 1 to respond.

Kaplan wrote back a few days later, clearly peeved that Barbara had inserted herself into the legal proceedings. “Ms. Fried is not a member of the Bar of this Court, has not sought leave to appear pro hac vice, and has not filed an appearance,” he wrote. “A power of attorney granted by the defendant does not authorize her to seek relief from the Court or otherwise to participate in this litigation.” Ouch.

The judge then tried to soften the blow. “The Court of course understands that Ms. Fried is the defendant’s mother, was trained and practiced as a lawyer, and has taught at Stanford Law School,” he wrote. “Nevertheless, with no disrespect, she lacks standing to file papers or seek relief in this case. Indeed, Bankman-Fried is represented in this matter, to this day, by three members of the Bar who have appeared here and who do have standing to act on his behalf.” Kaplan also chided her for not sending a copy of her letter to the U.S. Attorney and for leaving a voicemail message on his chamber’s phone. He voluntarily agreed to give Sam until March 23 to respond to the government’s brief, and to give the prosecutors time to respond to Barbara’s request.

But apparently Barbara was just getting started. She wrote back to Judge Kaplan, describing herself as Sam’s “attorney-in-fact,” and arguing that the judge had “mischaracterized” her involvement in Sam’s legal efforts. Because Sam represented himself in the request for a new trial, she argued, his plea for an extension “could not come through his counsel.” Moreover, she hadn’t written Judge Kaplan “in any legal capacity,” but only because Sam “has very limited means of communicating with the outside world from prison” and because she and Joe Bankman, Sam’s father, have power of attorney “for all personal matters” involving Sam.

Moreover, she argued, “If he had sent a handwritten letter to your chambers requesting an extension (his only means of direct communication with you), it would have taken a minimum of 3 to 6 days to get to you and at least another day for you to rule, by which time the deadline set for his reply would already have passed.”

I don’t know, but I suspect Judge Kaplan won’t respond to Barbara’s rebuttal, and Sam will have only until Monday to reply to the government’s argument that he should not get a new trial. He’ll presumably have to do this while en route to Lompoc, with a possible rest stop at the high-security Victorville prison, some 100 miles northeast of Terminal Island.

In any case, it seems like it will be hard for Sam to refute U.S. Attorney Sean Buckley’s argument in the D.O.J. brief for why Kaplan should deny his request for a new trial. “A jury convicted Samuel Bankman-Fried on all counts following a four-week trial,” Buckley wrote. “The trial featured the testimony of three of his coconspirators with direct, first-hand knowledge of his massive fraud; expert analysis of FTX’s insolvency and the defendant’s use of funds; thousands of contemporaneous documents, including spreadsheets, Signal messages, balance sheets, and code repositories; and perjurious testimony from the defendant himself. The jury deliberated for fewer than five hours before returning a unanimous verdict.”

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All true, of course. And then the sledgehammer: Sam’s argument for a new trial, Buckley wrote, was “a transparent attempt to relitigate questions the jury decided, reassert factual claims the record refutes, and advance a political narrative the defendant committed to writing before his arrest.”

He also made the cogent argument that Sam’s “most aggressive claim”—that FTX was, in fact, solvent, and that customers have since been made whole through the bankruptcy process—is “factually wrong, legally irrelevant, and deeply misleading,” and therefore not a basis for a new trial. He noted that Sam’s solvency argument “rests on dubious accounting methodologies that have been rejected by experts, restructuring professionals, and most notably the jury. FTX did not have the Bitcoin, Ethereum, and other cryptocurrency that customers had deposited.”

He added that Sam’s claim of solvency for FTX would be akin to claiming Lehman Brothers had been “not insolvent, just illiquid” in 2008, because the value of the mortgage-backed securities that had larded up Lehman’s balance sheet later recovered in value. “[C]riminal fraud is complete at the moment of misappropriation,” Buckley wrote. “The defendant directed Alameda Research to take customer funds, had his engineers code undisclosed privileges enabling that extraction, and used financial documents designed to mislead Alameda’s largest lenders. All of this occurred before the bankruptcy filing. What successor management recovered afterward, through years of litigation, asset monetization, and a rising crypto market, does not reach back and render the defendant’s misappropriation lawful. A bank robber is not acquitted because the stolen funds were eventually recovered.”

Meanwhile, Sam’s transparent efforts to get Trump to pardon him—heaping praise on the president to his 1 million followers on X, giving a jailhouse interview to Tucker Carlson, etcetera—seem to have pissed off members of Congress, specifically those anxious to legitimize cryptocurrency through new legislation untarnished by the FTX scandal. Trump has certainly pardoned plenty of people who might have seemed unpardonable. But it’s a longshot—mostly, I would think, because Sam’s appeal with the Second Circuit rests largely on him slagging Sullivan & Cromwell, one of Trump’s favorite law firms.

The walls seemed to close in again on Monday, when Politico asked a handful of Republicans about the prospect of Sam being pardoned. “The guy’s a piece of shit,” Sen. Bernie Moreno responded. “The guy shouldn’t be pardoned. The guy should go to jail for a long, long time.” Sen. Cynthia Lummis, one of the most outspoken crypto advocates in Congress, said that she hopes Trump “doesn’t fall” for a pardon for Sam. “He hurt a lot of people,” she said. “He should have to spend some time contemplating that.” Rep. Mike Flood was on the same wavelength. “He crashed the car, man,” the Republican said. “He engaged in massive fraud. Wall Street’s not needing him back to fix any problems. He helped us identify a problem by committing a massive amount of fraud—and we rewarded him with a long stay in a federal prison.”

Seems to me that, with razor-thin majorities in Congress—and in the House in particular—Trump can hardly afford to piss off Republican legislators by granting Sam a pardon. Nor does Judge Kaplan seem inclined to grant him a new trial. And the odds of victory on appeal in the Second Circuit are always long, as Barbara herself admitted in a new blog post. “Only 5 percent of federal criminal convictions are reversed on appeal,” she wrote this week. “Those are dismal odds if you have been sentenced to 25 years in prison for a crime you didn’t commit.” This is turning into quite the soap opera.

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