FTX's Sam Bankman-Fried Going to Jail Puts His Trial at 'Huge Disadvantage': Bernie Madoff's Former Attorney

Friday, Sam Bank and freed got his bail revoked and was shown to a jail cell. We are joined now by a special guest to help us unpack the latest development and its significance. Joining us is Ira Lee Sorkin. He's the former attorney for Bernie Madoff and a current partner at Mince and Gold. Ira. How are you today? Good. Thank you. So, first of all, top, I just want a high level informed perspective on this SPF thing. You've seen some major cases play out in your day. Is there anything that is especially striking or notable about the SPF case here? And now what are your high level thoughts? High level thoughts, the media interest? Next question. All right, let's do it. All right. Next up, next up, media interest. All right. So he's in jail now. He's waiting for his October uh court date behind bars. You gave a similarly concise uh comment to Coindesk back in December saying that Sam Bank man should quote, just shut up already. Maybe sorry that I paraphrased it, but basically it was shut up. Those were the two word of advice that you provide to Sam Bank MF I don't think he took that because the judge said he was really pushing the envelope uh with his communications with various witnesses. Is that still the piece of advice that you would share to Sam Sam Baman free if you were his counsel now? Absolutely. I mean, there's no need, there's no need for him once he was uh made bail for him to discuss the case to share his thoughts about the case with any party other than his counsel. Uh And quite frankly, uh the amount of documents. Uh and I say this with the understanding that uh can go, that does not represent anyone in this case. We certainly don't represent Mr Frank and free. We don't represent any witnesses. We are not involved in the case but the standard uh conduct uh that uh every defendant who makes bail is told, do not discuss the case, don't discuss it with any potential witnesses, don't discuss it. Certainly with the press. Uh The only person you should talk to is your counsel and there are ways to deal with other witnesses in the case such as through counsel and a process called a joint defense agreement where the lawyers can talk to one another pursuant to an agreement. Um And it protects the attorney client privilege and it gives the opportunity for all counsel in the case, whether they are defendants or unindicted co conspirators or conspirators, uh to be able to share information amongst the lawyers uh without their clients being present. So those are the general rules, there's nothing unusual about this particular case, but when uh Sam Blanken Fried made uh bail, he was specifically instructed not to discuss it with anyone, discuss the case with anyone, don't discuss it with any potential witnesses, don't share what you uh uh are given in the way of the mandatory discovery that the government's required to give to all defendants. Um And of course, we have another situation going on uh in uh Washington DC and in uh uh the southern district or the middle district of Florida, I think it's the southern district of Florida where a rather prominent individual was even the same instruction uh by the judge, it's standard and that's the way it's done if you violate the bail conditions which uh Mr Blanken freed uh uh violated according to the judge. Um then he faces the consequences and the consequences of jail. Uh My understanding is that he's going to appeal it. Uh He's got a very good lawyer representing him. Uh and they're gonna appeal it but uh the chances of him um getting out pending the trial, I think are very slim. These are decisions made by the district court judge who happens to be a judge of many years, very well respected, very smart. And uh the Court of appeals is not going to question, I believe uh his decision because he knows the record and he knows what the bail conditions are? Thanks again for joining us this morning. I want to ask about the significance of being able to prepare for what's coming in October while in jail. How difficult is it? How difficult is to talk with your lawyer or with your client during that period? Is this a huge disadvantage now going into October? It is a huge disadvantage uh because there are from what I've read and heard, there are innumerable, do many, many, many, many, perhaps millions of documents uh that the government is required to turn over uh to Mr uh uh Blackens Council and having had clients who are uh in and not being able to make bail, it is very difficult in a paper case such as this uh to uh prepare for trial, the facilities at the metropolitan uh NBC Brooklyn uh center where he's being held um very, very difficult uh to, to prepare. Uh But this is something that uh I have no doubt his lawyers spoke to him about and I'm just speculating uh and said, if you stay out, it'll be much easier to prepare for trial. If you're incarcerated. It's very difficult. Uh The facilities are bad. The uh um uh there is privacy uh but uh to load in all the documents and all the information that the government is required to turn over to his lawyers is gonna make it very difficult for him to prepare, but it's done. There are number of people who don't make bail, but it's done. It just makes it a lot more difficult to prepare. I want to talk about these diary entries. They feel like the straw that broke the camel's back here. Uh Sam Bank M Fried's attorneys say that he wasn't um, trying to tamper with witnesses that he, they confirmed he did leak a few pages of the diary to the New York Times. Could this come, come back? Could it be brought up again? Once this does go to trail in October? And how might it affect this case? It won't affect it at all? The fact that he disclosed information to the Times or to any uh uh media. Let's make it general media, it's not going to affect the trial at all. Um It affected his veil obviously, but it's not gonna affect the trial. Uh, what he turned over. We don't know, I don't know whether the time is public Times has published it or intends to publish it. Uh, but there are um, first amendment and freedom of press issues uh, involved in that. And, um, I'm old enough to remember, um, the, uh Pentagon papers case and uh Daniel Eber. And, uh, that didn't stop um, the disclosure of information that came to the press, but it didn't affect the trial and it won't affect the trial here either. I have a question for you, uh, myself and a lot of other people are speculating that Sam will be given special treatment because he comes from a family with a lot of influence and money. Do you think that that is something that we will see play out that he will be segregated away from the other inmates and he will receive special treatment while incarcerated. The short answer is no. Um he may be segregated uh often um uh defendants who are have some notoriety are separated but the short answer is no, um I don't believe he's going to get any special treatment in jail. Jail is not a very nice place, particularly the uh metropolitan Correctional Center in Manhattan, which is closed. And the Brook Correctional Correctional Center uh which is uh uh open and um he, he will not be given any special privileges and certainly the uh facilities do not consider uh the success or wealth of the family or those who put up bail question for you. So you worked clearly with the, the Bernie Madoff case and that was the, you know, the last major alleged fraud to have captured headlines of this magnitude based on your understanding of the sandbag and free the FTX Alam case. Do you think that this is also a Ponzi scheme or do you, do you see key differences? I, I don't really know, I mean, I don't know the case. I only know what I've read in the press. Um uh It appears that uh um from what the press said and what the indictment says that money was taken out and used for purposes other than what was told to the investors. Uh But that's not unusual in Ponzi schemes. It's not unusual in stock fraud schemes. It's not unusual uh in um uh mail fraud and the like uh the crimes uh for which he's been charged uh conspiracy as well. Um Are when you boil it all down, it's uh pretty run of the mill in terms of what it's alleged that he engaged in uh the magnitude in terms of the dollars, of course, and the amount of money alleged uh makes it a bigger case and of course, because it's crypto uh that's uh of greater interest to the public, but certainly, um the uh uh the, the statutes for which he was indicted, um uh they are standard stuff in most white collar crimes. I want to go back to the money which you just referred to there. Uh This has been a very expensive case, not only looking at like the chapter 11 restructuring with the FTX state right now, but also from the SPF side of things, when you're looking at the past cases you've worked on or you've looked at the information you've seen in the press so far to date. How do you much? Do you think this cost like the cost is for SPF and his team? And what do you expect this to run going into the future? Uh it's, it's a very, very expensive defense. Um, the amount of discovery, uh, the bankruptcy issue, of course, throws another, um, uh, issue into the case. Um, and, uh, uh, in terms of legal fees and experts, uh, and, uh, the, like, it's gonna be a very, very expensive, uh, defense. You got a ballpark, uh, back of the, uh, back of the envelope, uh, estimation if you had to guess if I had to guess, I certainly think that it'll run into several millions of dollars. Fair, safe bet, safe bet. All right. Well, thank you so much for joining us today. We really appreciate your insights on again what uh a lot of people are watching in the SPF case. So, thank you so much. That was, thank you, appreciate your time. That was I really Lee Sorkin, currently a partner at law firm Mince and Gold.