SBF's Trial Defense, Part IV: How Sam Bankman-Fried Gets Acquitted
Despite facing incredibly small odds at trial, SBF's defense still has a shot, according to Bernie Madoff's former prosecutor
By: Zack Guzman
September 7, 2023
FTX founder Sam Bankman-Fried is a lot of things — but he’s not Bernie Madoff.
It's an important distinction, and one that will have to land with the jury at trial if SBF's legal team is going to have a chance at defending against the seven charges he's facing.
The good news: Even Bernie Madoff's former prosecutor, Marc Litt, knows this case isn't a repeat of the multibillion-dollar fraud perpetrated by America's most infamous fraudster.
The bad news: Fraud is still fraud.
"It's not clear to me that this is exactly a Ponzi scheme, but securities fraud is securities fraud," Litt tells Coinage in Part IV of our investigative series above. "The government is alleging, among other things, that promises were made to investors and promises were broken and the promises were material."
More specifically, Bankman-Fried is facing seven charges at his first trial:
Wire Fraud On The Customers Of FTX
Conspiracy To Commit Wire Fraud On The Customers Of FTX
Wire Fraud On Lenders To Alameda Research
Conspiracy To Commit Wire Fraud On The Lenders of Alameda
Conspiracy To Commit Securities Fraud On Investors In FTX
Conspiracy To Commit Commodities Fraud On Customers Of FTX In Connection With Purchases And Sales Of Cryptocurrency And Swaps
Conspiracy To Commit Money Laundering
Drawing on his decades-long experience as both a federal prosecutor and defense attorney, Litt predicts both sides will try to simplify their sides of the story as much as possible.
"The case isn't about cryptocurrency — it's about, again, representations made and not kept. It's about taking money from one pocket and using it for purposes of another company in another pocket without the investor knowing that, and with taking efforts to conceal that. That's not hard for a jury to understand," Litt said. "The biggest mistake I think prosecutors can make — and I don't think these prosecutors will — is to make the case more complicated than it is."
As for SBF's defense strategy — which Coinage was first to exclusively preview — the plan likely calls for introducing some level of additional complexity for the jury to consider. Who knew what and when? Did SBF have complete insight into the business at all time?
"The defense will take the opposite approach and try to confuse the issues — draw all the complexity they can out of it and try to persuade at least one juror that that complexity casts doubt on his intent and his lack of criminal mindset," Litt says. The only problem is that the facts as SBF is prepared to present them are likely to clash with testimony from his three top deputies.
Litt, for his part, declined to weigh in on exactly what odds he would give SBF at trial. (Madoff, after all, pleaded guilty before there was even a plea deal to be had.) However, it's worth noting that the realistic goal here may not even be a full acquittal.
"You'd love to get an acquittal, but to get an acquittal, you've got to persuade 12 jurors that the government got it all wrong and all three of these witnesses lied and ... these nice young lawyers wearing the blue suits for Team USA have got it all wrong," Litt said. "It's a high hurdle to overcome. An easier hurdle to overcome is to persuade one [juror] to hang and then you make the government try the case all over again."
For full analysis of SBF's upcoming trial, watch our video above, and check out Coinage's exclusive preview of his defense to come:
Disclosure: Alameda Ventures is one investor among many in Trustless Media, the production company behind Coinage.