U.S. District Judge Lewis Kaplan has granted prosecutors at the U.S. Department of Justice (DOJ) permission to bring up evidence of former FTX CEO Sam Bankman-Fried’s alleged campaign finance scheme.
In a pretrial order on Tuesday, Judge Kaplan said the court would entertain the evidence if requested, despite the prosecutors dropping the campaign finance charge against Bankman-Fried earlier this year.
“Such evidence is intertwined inextricably with the evidence regarding the charged wire fraud scheme on customers of FTX and necessary to complete the story of the charged crimes on trial,” said Kaplan in the ruling.
Proof that Bankman-Fried used customer funds on these donations is direct evidence of the wire fraud scheme, because it is relevant to establishing motive, he stated, while routing them through straw donors goes to the element of concealment as alleged in the money laundering charge.
The judge also granted the government permission to introduce evidence related to Alameda Research’s secret acquisition of substantial FTT and other tokens, and then CEO Caroline Ellison’s attempt to manipulate their price under Bankman-Fried’s direction.
“The alleged manipulation of the cryptocurrency tokens, which resulted in an alleged manipulation of Alameda’s balance sheet, was an act ‘done in furtherance of the alleged conspiracy’ and therefore is considered ‘part of the very act charged,” stated Kaplan.
However, Kaplan denied the DOJ’s motion to cross-examine witnesses on documents that were protected by attorney client privileges and denied a motion that would preclude Bankman-Fried’s lawyers from cross-examining witnesses about their recreational drug use.
