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This included his sharing the personal writings of Caroline Ellison, the former chief executive of his Alameda Research hedge fund, with a New York Times reporter. Ellison has pleaded guilty to fraud and is expected to testify against Bankman-Fried, a former romantic partner. Bankman-Fried faces seven charges of fraud and conspiracy stemming from the November 2022 collapse of his now-bankrupt company. Prosecutors countered in court papers that Bankman-Fried sought to use the Times as a "mouthpiece for discrediting a government witness shortly before trial." They also said Bankman-Fried has had no more difficulty preparing for trial than any other detainee.
Persons: Sam Bankman, District Judge Lewis Kaplan, Bankman, Caroline Ellison, Ellison, Fried, jailing, Kaplan, Luc Cohen, Will Dunham Organizations: Manhattan U.S, U.S, Circuit, District, Alameda Research, New York Times, Bankman, Prosecutors, Alameda, Thomson Locations: Brooklyn, Alameda, New York
Last week, the Manhattan U.S. attorney, Damian Williams, called for an outside authority to take control of the jails, saying that “after eight years of trying every tool in the tool kit we cannot wait any longer for substantial progress to materialize.” And the federal judge who appointed the monitor as part of a civil rights case against the jails, Laura Taylor Swain, has recently signaled a deep frustration with the city’s Correction Department. For his part, Mr. Molina and his staff members have touted progress, pointing to department statistics that show a decrease in deaths, as well as in slashings and stabbings. But the creation of the new, tight-lipped investigative group — known as the special investigations unit — and other moves emanating from the commissioner’s office have called into question whether such statements can be trusted, records and interviews show. While there is nothing inherently wrong with a commissioner changing the structure of the units within the department, former correction officials say, the new unit’s refusal to divulge details of one violent incident has hampered the work of the monitor and other watchdog groups. The unit that is now being criticized was created on the same day in April that the federal monitor, Steve J. Martin, filed a report with the court praising the department’s willingness to take steps toward reform.
Persons: Damian Williams, Laura Taylor Swain, Molina, Steve J, Martin Organizations: Manhattan U.S, city’s, Department Locations: slashings
New York woman sentenced in 'catfish' extortion bid of CEO
  + stars: | 2023-07-20 | by ( Dan Mangan | ) www.cnbc.com   time to read: +5 min
At her sentencing Wednesday, Blackwood was also ordered to serve three years of supervised release for the attempted shakedown, which spanned six months in 2022. A New York woman was sentenced to time already served in jail for cyberstalking in a case where she was accused of " catfishing " a mystery high-profile CEO of a publicly traded corporation. Prosecutors in a court filing said Blackwood tried to extort the victim by threatening to "falsely tell the world" that the man "has sex with a minor." Blackwood also ramped up pressure on the victim in late April 2022 by "using Twitter to tweet veiled threats at the Victim," prosecutors wrote. "For many months, the defendant kept the Victim suffering from the constant fear that his life would be ruined.
Persons: Furman, Blackwood, Jess Furman, Sakoya Blackwood, , Blackwood's, Michael Tremonte, Tremonte, Ms Organizations: US Marshals Service, Manhattan Federal, Manhattan U.S, Bronx, Prosecutors, Harvard, CNBC Locations: Manhattan, United States, Jamaica, New York, Brooklyn, cyberstalking
The plaintiffs' lawyer who filed that case, Kerry Miller of Fishman Haygood, told me on Wednesday that he plans to monitor the Bankman-Fried criminal case for any Fenwick & West documents that might boost the class allegations. Companies are typically reluctant to waive privilege for fear that their lawyers’ documents might be used in other cases. That assertion seems to hint that Bankman-Fried will claim that he can personally waive privilege over some Fenwick & West communications. The strongest defense case, Sandick said, would probably feature testimony from a Fenwick & West witness to bolster testimony from Bankman-Fried about his reliance on advice from FTX lawyers. But contradictory testimony from a law firm witness could undermine Bankman-Fried’s advice-of-counsel defense.
Persons: Sam Bankman, Gresser, Fenwick, Fried, West, FTX, , , Bankman, District Judge Lewis Kaplan, Kaplan, Kerry Miller, Fishman Haygood, Cohen, Sullivan, Cromwell, Harry Sandick, Patterson Belknap Webb, Tyler, ” Sandick, Sandick, , ’ ”, Alison Frankel Organizations: Cohen, Fenwick & West, Alameda Research, Silvergate Bank, West, U.S, Prosecutors, Alameda, District, District Judge Lewis Kaplan of, Fenwick &, Manhattan U.S, Companies, Defense, Thomson, Reuters Locations: Fenwick, FTX, Alameda, Manhattan, California, District Judge Lewis Kaplan of Manhattan
Crypto imploded in 2022, as investors lost faith in digital assets and the industry was plagued with crisis. But unlike other collapses, it has largely avoided rippling into other markets. Illustration: Mallory BranganA former Coinbase employee was sentenced to two years in prison for his role in what federal prosecutors called the first-ever insider-trading case involving cryptocurrency. Ishan Wahi , 32 years old, previously pleaded guilty in a New York federal court to two counts of conspiracy to commit wire fraud for tipping off his brother and a friend to confidential information that he gained at his job at the crypto exchange. The tip recipients, co-defendants in the case, used the information to trade on digital tokens, making nearly $1.5 million in profits, according to federal prosecutors from the Manhattan U.S. attorney’s office.
The home page of NFT marketplace OpenSea. Photo: Ariel Zambelich/The Wall Street JournalA former employee of NFT marketplace OpenSea was found guilty Wednesday of what federal prosecutors described as the first insider-trading case involving digital tokens, marking a win for the Justice Department in its push to police the crypto industry. A federal jury in New York convicted Nathaniel Chastain of wire fraud and money laundering for using nonpublic information from his employer to trade on nonfungible tokens in 2021. The Manhattan U.S. attorney’s office charged Mr. Chastain in 2022, accusing him of purchasing the NFTs ahead of OpenSea’s featuring them on its home page. Once the NFTs spiked in value after being featured, Mr. Chastain sold them, pocketing tens of thousands of dollars in profit, prosecutors said.
It is considered the first criminal insider trading case involving such assets. "He abused that position of trust," prosecutors said in an April 4 filing. He added that if prosecutors mention insider trading, "there is a substantial danger of undue prejudice and confusion of the jury." "Is it insider trading of anything?" "If this case sticks, there is precedent that insider trading theory can be applied to any asset class."
Guo Wengui Denied Bail While Awaiting Trial in New York
  + stars: | 2023-04-20 | by ( James Fanelli | ) www.wsj.com   time to read: 1 min
A courtroom sketch shows Guo Wengui at a courthouse in New York. Photo: JANE ROSENBERG/REUTERSA New York federal judge on Thursday ordered wealthy Chinese businessman Guo Wengui jailed while he awaits trial on fraud and money-laundering charges, calling him a flight risk and saying the Justice Department’s evidence against him was strong. Mr. Guo, who garnered attention by accusing Beijing of corruption from his Manhattan penthouse, was arrested and charged last month with a $1 billion fraud scheme. Federal prosecutors in the Manhattan U.S. attorney’s office alleged he took advantage of the hundreds of thousands of followers he amassed online by soliciting investments in a cryptocurrency he developed, a media company and other ventures. He spent some of the proceeds on lavish purchases, including a $26 million home in New Jersey, a yacht and a Ferrari, prosecutors allege.
Reuters could not determine Coley's status in the government investigations or whether she had cooperated. While he was its director of enforcement, the CFTC increasingly worked on investigations in parallel with federal prosecutors. McDonald's representation of Coley comes as the U.S. investigations pile pressure on Binance, which dominates the crypto sector as the world's largest digital currency exchange. The CFTC's complaint said that Binance personnel, including Zhao, have "dictated Binance.US's corporate strategy, launch, and early operations." In a subpoena addressed to Coley that same month, the SEC also requested all records of her activities and meetings.
The Supreme Court refused Monday to consider the appeal of a disbarred lawyer jailed for contempt of court after he won a $9.5 billion judgment against Chevron in an environmental lawsuit in Ecuador . A group of Ecuadorians represented by Donziger filed a class-action suit against Chevron in Manhattan federal court in 1993. The plaintiffs in the lawsuit were awarded $9.5 billion from Chevron by a judge in Ecuador. Chevron then filed a legal action in Manhattan federal court and won an injunction against the enforcement of the judgment in any U.S. court. In the Chevron case, Gorsuch wrote, "However much the district court may have thought Mr. Donziger warranted punishment, the prosecution in this case broke a basic constitutional promise essential to ourliberty."
Citing former President Donald Trump's history of verbally attacking people in the legal system, a federal judge ruled Thursday that a jury will be anonymous at his upcoming civil trial for allegedly defaming a writer after she accused him of raping her. "Mr. Trump repeatedly has attacked courts, judges, various law enforcement officials and other public officials, and even individual jurors in other matters," Manhattan U.S. District Judge Lewis Kaplan wrote in his order. Trump in that probe is being eyed for a hush money payment to porn star Stormy Daniels in 2016. Kaplan said he would keep secret the names, addresses and places of employment of prospective jurors for the rape defamation trial, which is set to begin April 25. Her lawsuit also makes a claim of battery for the purported assault under a new New York law that temporarily lifts the statute of limitations for old rape and molestation claims.
"Jamie Dimon knew in 2008 that his billionaire client was a sex trafficker," attorney Mimi Liu told Manhattan U.S. District Judge Jed Rakoff at a hearing late Thursday, referring to the year Epstein was first criminally charged with sex crimes. "If Staley is a rogue employee, why isn't Jamie Dimon?" The lawyer continued: "Staley knew, Dimon knew, JPMorgan Chase knew" about Epstein's criminal conduct. Simon Dawson | Bloomberg | Getty ImagesA lawyer for JPMorgan disputed those arguments, "in particular the point about Jamie Dimon having any specific knowledge." Wexler also said, "Jamie Dimon has no recollection of reviewing the Epstein accounts."
A courtroom sketch shows Sayfullo Saipov using headphones to listen to the reading of the jury’s verdict on Monday in New York. Convicted Manhattan bicycle-path terrorist Sayfullo Saipov will serve life in prison without the possibility of release after jurors couldn’t agree on whether to sentence him to death, a blow to the Justice Department. Jurors said Monday that they were unable to reach the unanimous verdict needed to sentence Saipov to death, according to a spokesman for the Manhattan U.S. attorney’s office, which prosecuted the case.
Law firms Akin Gump Strauss Hauer & Feld LLP FollowNEW YORK, Feb 28 (Reuters) - The U.S. Commodity Futures Trading Commission (CFTC) has hired a former New York prosecutor with expertise in cryptocurrency and cyber crimes to lead its enforcement unit, the agency said in a statement on Tuesday. CFTC Chairman Rostin Behnam in the statement described McGinley as a "leader in combatting modern financial fraud". "His background as a prosecutor with unique experience in commodities, crypto, and cyber-crimes and frauds makes him an ideal person to lead the CFTC’s enforcement team," Behnam said. McGinley, whose appointment is effective immediately, replaces the CFTC's acting director of enforcement and veteran CFTC official Gretchen Lowe. Reporting by Chris Prentice Editing by Mark PotterOur Standards: The Thomson Reuters Trust Principles.
The office has deployed the 1989 law at the same time the Labor Department presses a workplace safety investigation of Amazon that has already led to several citations. The office also wants video surveillance footage of Amazon facilities and has served subpoenas to take testimony from Amazon employees, including high-level executives, according to Ms. Ahmad. Amazon in court papers in the case in Seattle said the information demands are “unrealistic” and the U.S. Attorney’s Office stretched to assert jurisdiction under Firrea. Any fraud case against Amazon would turn on whether the company had made misrepresentations to lenders and whether those misrepresentations impacted their decision-making, he said. A spokesman for the U.S. Attorney’s Office in Manhattan didn’t respond to a request for information on the identities of the financial institutions whose dealings with Amazon are under scrutiny.
The brother of a former Coinbase Global Inc. employee was sentenced in a New York federal court Tuesday to 10 months in prison for his role in what prosecutors called the first cryptocurrency insider-trading scheme. Nikhil Wahi , 27 years old, pleaded guilty last year to one count of conspiring to commit wire fraud, admitting to profiting from confidential information that federal prosecutors say his brother obtained about assets to be listed on the crypto exchange. Mr. Wahi netted nearly $900,000 in proceeds by using the information to trade on digital tokens, according to prosecutors in the Manhattan U.S. attorney’s office.
Friedberg gave details about FTX in a Nov. 22 meeting with two dozen investigators, the person said. "THROUGH THICK AND THIN"Prior to his work advising FTX, Friedberg advised a mix of banking, fintech, and online gaming companies. At the time, the source said Friedberg advised Bankman-Fried on running Alameda, which he founded that year. In 2020, when Bankman-Fried launched a separate exchange for U.S. customers called FTX.US, Friedberg moved in-house as FTX's chief regulatory officer. In a now-deleted blog post published that year on FTX's website, Bankman-Fried wrote that Friedberg was FTX's legal advisor "from the very beginning," noting he had been "with us through thick and thin."
The government will give documents and evidence to Bankman-Fried’s lawyers in a process known as discovery. Prosecutors said on Tuesday that they have hundreds of thousands of documents with more on the way as they continue gathering evidence. Discovery can take months, particularly if disputes arise over what evidence the defense is entitled to see ahead of trial. Manhattan U.S. Attorney Damian Williams has said his office will continue to make announcements as its probe widens. Criminal defendants can change their plea at any time, and their lawyers often negotiate with prosecutors over a possible plea deal.
Former FTX chief executive Sam Bankman-Fried (C) arrives to enter a plea before US District Judge Lewis Kaplan in the Manhattan federal court, New York, January 3, 2023. The Manhattan U.S. Attorney's Office said Tuesday it had created an FTX Task Force to trace and recover assets of victims of the cryptocurrency exchange firm's collapse and to handle investigations and prosecutions related to the company and other entities. The announcement came as FTX founder and former CEO Sam Bankman-Fried appeared in U.S. District Court in Manhattan to plead not guilty in his criminal case, where he is charged with multiple counts of financial fraud and campaign finance crimes. "The Southern District of New York is working around the clock to respond to the implosion of FTX," Manhattan U.S. Attorney Damian Williams said in a statement. "It is an all-hands-on-deck moment," Williams added.
Dec 30 (Reuters) - Federal prosecutors are looking into a series of crypto transactions that online analysts have tied to digital wallets associated with Sam Bankman-Fried, Bloomberg News reported on Friday, citing a person familiar with the matter. A spokesperson for the Manhattan U.S. attorney's office and an attorney for Bankman-Fried did not respond immediately to Reuters requests for comment. Bankman-Fried, the former chief executive officer of bankrupt crypto exchange FTX, tweeted that he was not behind the transactions. "I'm not and couldn't be moving any of those funds; I don't have access to them anymore," he said. Reporting by Niket Nishant in Bengaluru; Editing by Shailesh KuberOur Standards: The Thomson Reuters Trust Principles.
Dec 27 (Reuters) - Federal prosecutors are investigating an alleged cybercrime that drained more than $370 million from crypto exchange FTX hours after it filed for bankruptcy, Bloomberg News reported on Tuesday citing a person familiar with the case. The criminal probe into the stolen assets, launched by the Department of Justice is separate from fraud case against FTX co-founder Sam Bankman-Fried, the report added. FTX filed for U.S. bankruptcy last month and Bankman-Fried stepped down as chief executive, after traders pulled billions from the platform in three days and rival exchange Binance abandoned a rescue deal. The U.S. Department of Justice accused Bankman-Fried of causing billions of dollars of losses related to FTX, which a U.S. prosecutor called a "fraud of epic proportions." The FTX collapse has fanned fears about the future of the crypto industry after the beleaguered exchange outlined a "severe liquidity crisis".
Federal prosecutors endorsed plans to allow two former Sam Bankman-Fried lieutenants, Gary Wang and Caroline Ellison, to post bail after both pleaded guilty to supporting a multibillion-dollar fraud allegedly perpetrated by former FTX CEO Bankman-Fried, court documents show. Wang and Ellison would be required to post $250,000 in bail each, surrender their passports and restrict their travel to the continental United States. In addition to admitting their complicity in the collapse of FTX, Wang and Ellison signed consent orders with the Commodity Futures Trading Commission, a civil concession that Bankman-Fried has yet to make. Wang, 29, and Ellison, 28, both pleaded guilty to fraud charges stemming from their leadership positions at FTX and Alameda, respectively. In a prerecorded statement Wednesday night, U.S. Attorney Damian Williams said the indicted former FTX CEO had been taken into FBI custody after a chaotic Bahamas extradition process.
Factbox: Major cryptocurrency cases probed by U.S. authorities
  + stars: | 2022-12-14 | by ( ) www.reuters.com   time to read: +5 min
BITMEX EMPLOYEESEmployees of BitMEX, including the cryptocurrency exchange's founders, pleaded guilty this year to willfully failing to establish, implement and maintain programs to prevent money laundering. The firm's cofounders pleaded guilty in federal court in New York and each agreed to pay a $10 million criminal fine. Another of the firm's employees also pleaded guilty, and agreed to a $150,000 fine. ONECOIN LTDIn 2019, U.S. authorities charged the alleged leaders of a multibillion-dolar pyramid scheme involving a fraudulent cryptocurrency called OneCoin. After a six-month court battle, Telegram agreed to pay an $18.5 million civil penalty and return $1.2 billion to investors.
The prosecutors are looking into whether Bankman-Fried controlled the prices of two interlinked currencies, TerraUsd and Luna, to benefit the entities he controlled including FTX and Alameda Research, the report said. Regulators around the globe, including in the Bahamas where FTX is based and in the United States, are investigating the role of FTX's top executives including Bankman-Fried in the firm's stunning collapse, Reuters has previously reported. In recent weeks, U.S. authorities have sought information from investors and potential investors in FTX, according to two sources with knowledge of the requests. Federal prosecutors in New York are asking for details on any communications such firms have had with the crypto firm and its executives, including Bankman-Fried, the sources said. FTX and Alameda research did not respond to Reuters request for comments.
[1/2] The logo of FTX is seen at the entrance of the FTX Arena in Miami, Florida, U.S., November 12, 2022. Ellison, who ran trading firm Alameda Research, has hired Washington-based law firm Wilmer Cutler Pickering Hale and Dorr to represent her, a source familiar with the matter told Reuters. Semafor previously reported Mills' advisory work for Bankman-Fried. FTX secretly transferred customer funds to its affiliate Alameda Research to fill a shortfall at the crypto trading firm, Reuters has previously reported. The Wall Street Journal has previously reported that Ellison and senior FTX officials knew the crypto exchange had dipped into its customer funds to help Alameda meet liabilities.
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