Sam Bankman-Fried Found Guilty of All Seven Fraud Counts: What Happens Next?

The state of crypto is presented by Tron connecting the world to the power of Cryptocurrency. All right, more legal analysis. Now, for the SPF trial, we're joined by lawyer Kevin o'brien from the firm Ford o'brien. Landy. Welcome to the show, Kevin. Thank you. Now, your former assistant us attorney specialize in white collar criminal defense. Of course, we know that Beman Fried was found guilty on seven counts of wire fraud, securities fraud and money laundering last night. Were you surprised that we got the decision so quickly? I was, I didn't realize Kaplan had given them till eight o'clock and offered them that your, uh, your other commentator, I think wisely pointed out that may have made the difference here. If they'd been let go at the ordinary time, we'd probably still be waiting for a, for a verdict. Well, I guess that when we heard that last night, that was my initial reaction is the judge maybe pressing for a decision. Now, especially since if they didn't have a decision, we would have had Friday off. Is this the usual thing for a judge to do? Uh, judges like to move things along, especially as you know, if you, if you've ever witnessed him in the courtroom, he's very brisk and he doesn't like having his time wasted. Um, but in this case, it's highly likely we would have had a verdict by Friday anyway. So it's only a matter of a day. It's not like they were, there was a chance, uh, that the jury would need the weekend to reach its decision. I think that's very unlikely. So, uh, because it was so quick and, and uh that on all seven counts, um what are the odds of an appeal? Uh obviously they're going to appeal? But what are the odds that it would uh go anywhere uh on the surface? It, it doesn't appear very likely that Mr Cohen is a very able lawyer and he's got a lot of experience, he's got a very good firm behind him and they will come up with some issues. But on the face of it, there doesn't seem to be much for them to work with. Here. Trial was very well tried by the government. I have to concede that reluctantly. And um there were some issues, there were some rulings made by the court that can be questioned uh such as Kaplan's decision to keep out all that expert testimony. Um Some of the, some of that can be justified. However, and in any case, expert testimony isn't usually uh that important in the larger scheme of things in a criminal case. In fact, you rarely see defendants call experts. Um So that issue is going to be raised. I'm not sure it's a material one though that would sway an appeals court. And, and so how long would that take though, for him to go through with an appeal in this situation? Well, it depends, I think, I think at least six months, um, the record has to be assembled, the, the, the briefs have to be written and then there's a delay because the second circuit has a backlog like many appellate courts and they take their time uh reading the full record and reading all the briefs. So I, I wouldn't, I wouldn't imagine there would be a decision at least until after six months, six months out. This is an important case and it's a complex case. So that's gonna, it's gonna take some time. Kevin, what's going to happen with sentencing? A tentative sentencing date is set for March 28th, 2024. We of course, know that beg and fried could face 115 years in prison. What's going to be taken into consideration by the judge when the sentencing is handed down? I should just point out that 115 years. That's just the statutory maximum for all the counts added together. That's nowhere near uh you know, the plausible sentence he would get, I think under the guidelines, these numbers are so huge. You have to keep in mind and under our federal guidelines, the sentence is really pegged to the dollar amount of the loss. The dollar amount here, the government will argue is literally off the charts. It's, it's higher than the maximum number uh in the guidelines charts which is pretty astonishing. So it's possible that he could get 30 years in prison. But honestly, I don't think that's going to happen. Um, uh my, my thinking would be if you want me to elaborate on that, let me know. But my thinking would be, go ahead. I'm sorry. Well, it would, it be served concurrently and, uh, what are the minimums that he would, he would be facing here? I'm not sure there are minimums for these statutes. It's a good question. I don't think the sentence is gonna be consecutive. They don't usually do that. Um, they're gonna be concurrent sentences. Um, if they need to add them together, they will to get to the appropriate sentence. Uh, but I, I would think 15 years, something in the neighborhood of 15 years or maybe even 20 years on the reasoning that he's a relatively young man. His whole life is in front of him. I don't think the judge is gonna gonna wanna destroy his, uh, uh, chances of having a, a full and productive adult life if he did 30 years, uh, he would be in his mid ff before he got out of prison. I don't, I don't think the judge is gonna do that. I think he's gonna give him a, a chance to redeem himself so to speak. Hey, somebody in their fifties is a young man. I know, by the way, I know that. All too well, believe me. Well, let's chill out here. Huh? Kevin FFTX made some investments before it imploded. That are, seem to be doing pretty well. Now, the bankruptcy estate is also doing a decent job at clawing back some of those funds for customers. If customers are made whole or close to whole or 70% whole, will that weigh on the sentencing? Will the judge take that into consideration? It's a very good point. I mean, I, I'm frankly surprised the percentage is that high, 70% is a huge accomplishment in a bankruptcy, especially a bankruptcy like this, that imploded. That's based on something that imploded so quickly. Um But if they can reach something like that amount, something like that amount, yes, that's gonna, that's gonna, could make a difference in the calculations of the guidelines. Yeah, and that's the difference between that and Elizabeth Holmes where the money just disappeared and the valuation disappeared. But in this case, there were assets involved that that could be clawed back and she got 11 years, right? The fact that you said, look, the judge is going to look at this as uh he's got his future ahead of him in the same way, Elizabeth Holmes is a mom yet. We, we do know that there are the people who committed far less crimes than this, who end up with far longer sentences. Um, is there, is there a possibility that he might look at this and say, you know what, this was a high profile case? I don't want to be accused of favoring, uh, some rich kid from, from Stanford versus what happens to somebody who's born, uh, with less privilege? I might have to, you know, go the max. Is, is that possible? Is that something that you could see Kaplan? That's a very good point. And some judges um lean that way. Um I think judge Kaplan could very well think those very thoughts at some point. He does not like white collar defendants. He's a little more tolerant of other kinds of defendants. As many judges in the southern district are. Um and he can go through the record and find a longer sentences. You're right, John Regis, uh in the Adelphia case, which I was involved with was a 70 plus year old man. And nevertheless, Judge Sand, a liberal judge um sentenced him to 25 years in prison. Um And he was a mastermind of a, of a complex fraud that brought down the house and the judge had no difficulty sentencing him to a very lengthy prison term. That that could happen again. You're right. And now quickly before we go, we know that some of Sam Bateman Fried's ex colleagues and collaborators testified against him, Caroline Ellison Nishad Singh. What kind of sentences do you think that these former colleagues, these former FTX executives are going to get as collaborators with the state? Well, the key to the kingdom here is to get what's called a five K letter from the government sent to the judge which says this witness, your honor as you might remember was an exemplary witness who told the truth, withstood cross examination and contributed greatly to the conviction of the defendant. And that and, and on and on and on in that vein. And these facts should be taken into account in sentencing the defendant in the federal system. You don't negotiate a specific prison term, but you do negotiate the ability to get this letter, which is a license to the court to really apply any sentence it wants, uh, even down to no prison term. And, um, I think it's at least a possibility that some of these folks, um, may get zero, jail time including MS Ellison, who of course was a key player in the case. And the theory would be, we want to encourage this case would not have been possible. And I think that's largely true, would not have been possible without these inside witnesses who operated at the highest levels of the companies involved. They weren't minor witnesses, uh, uh, and their, and their testimony, uh, led the way to the conviction. We want to reward people like that and incentivize them to come forward in future cases. And therefore we're gonna, we're gonna hand out a very attractive sentence under all the circumstances. Sammy, the bull Gravano can walk the streets, I guess. And he, he admitted to killing people, right? And it's more than one. It was like, I think was it like 20? It was some crazy number. Sorry. But he was ii I remember he was the only witness, a real witness against the um um John Gotti. But still your point holds if, if, if the testimony is considered valuable enough, no jail is a definite possibility and certainly their lawyers are going to push for that. All right, Kevin, we're gonna have to leave it there. Thanks so much for joining and providing that insight. Thanks for having me. That was Ford o'brien Landy partner Kevin o'brien.