Hacker News Reader

Comment by panda-giddiness | Hacker News Reader

Not a lawyer, but I'll piggyback to say that the inevitable indictment will likely require proving criminal intent, specifically that SBF knowingly and willingly engaged in fraud. The Justice Department won't indict SFB until they have ironclad evidence demonstrating as much.

Consider a rushed indictment: SBF can always invoke his right for a speedy trial (i.e., the prosecutors must be ready for trial within 6 months of indictment). The prosecution would thus be in the ineviable position of simultaneously gathering evidence and building the case. Alternatively, they could wait to indict until after they've gathered evidence, which will give them ample time to meticulously build a case against him.

Since the harm of losing the case is greater than the harm of letting him roam free for a couple years, a delayed indictment seems like the clearly better option.

View on HN

Yes, and as former federal prosecutor and current white-collar defense attorney Ken White explains on Twitter, moving too fast also prevents them from using their best tools: flipping witnesses for lying and the Grand Jury.

His really good thread starts here: https://twitter.com/Popehat/status/1600877380683280384

https://threadreaderapp.com/thread/1600877380683280384.html

> a speedy trial (i.e., the prosecutors must be ready for trial within 6 months of indictment).

It's 71 days for federal trials, not six months. I know, it's a nit.

Thanks for the correction!

71 days vs 6 months is a pretty big difference though, less of a nit than you think!

I was summoned for a grand jury recently (not selected) and the entire process takes up to 18 months just for the potential indictment process.

The grand jury part of the process has nothing to do with the speedy trial clause because a) the grand jury part of the process is non-adversarial (so the potential defendant doesn't even know about it), b) it precedes indictment.

It does have to do with speedy trial, if the accused is arrested prior to indictment, since speedy trial rights attach at the first of any of a number of places, including arrest. (In the federal system, there is a 30 day clock for indictment or information from arrest.)

I wonder if this counts for the people in DC jail for Jan 6, or is that some quasi-federal thing since DC is a district by itself? But then I’d think it was at least somewhat a federal matter, and a speedy trial, one would hope, should apply at any level.

In principle the right to speedy trial applies to all federal defendants, and DC is under federal jurisdiction. But a speedy trial, while a good right to have, is a difficult one to exercise. IIUC, and IANAl, you have to exercise it in early proceedings, but in early proceedings the defendant is at a disadvantage because prosecutors have had ample time to prepare and they knew they were going to indict while the defendant did not, so the defendant has 71 days to prepare a defense while the prosecutors had no time limit in preparing their case. I suspect few defendants ever demand a speedy trial.

The right to a speedy trial may well have been incorporated against the States, but I don't know. In any case, a speedy trial mostly seems to mean that there must be a statutory limit to how much time can pass between indictment and the start of the trial, and between the start of a trial and closing arguments. Different States have different limits, and the variation in those limits surely must be constitutionally allowed, provided that in general they are a) statutory, b) not very long. I suspect a State could get away with 90 days from indictment.

EDIT: Defendants don't actually get to waive the right to a speedy trial, but if they don't assert that right, then they don't get to ask for dismissal of charges due to violations of the right to a speedy trial.

> The right to a speedy trial may well have been incorporated against the States,

The right to a speedy trial is incorporated against the states, yes. Klopfer v. North Carolina, 386 U.S. 213 (1967).

> a speedy trial mostly seems to mean that there must be a statutory limit to how much time can pass between indictment and the start of the trial

No, it doesn’t, nor does it provide such fixed limits on its own, instead being applied lookong at reasonableness case by case. The Speedy Trial Act of 1974 providing federal limits was largely a reaction to this, rather than required by it.

I was referring to the Sixth Amendment right to a speedy trial, since the amendment itself does not set such limits, the question is: what does "a speedy trial" mean? I've not looked at case law, but ISTM that having statutory limits and remedies must be a big component of what the right actually means.

What does "incorporated against" mean?

Federal courts (including in DC) issued emergency orders tolling Speedy Trial Act timelines during the pandemic (this impacts the statutory timelines, the Constitutional guarantee, which is enforced with a multifactor balancing test, is unimpacted.)

Wow! Opinion zone but this shouldn’t be allowed at all, public health is a necessary evil, it shouldn’t trample on individual rights.

The Supreme Court has made it quite clear ‘the constitution is not a suicide pact’. [https://en.m.wikipedia.org/wiki/The_Constitution_is_not_a_su...]

Public health is one of the clearest legitimate reasons to infringe on individual rights in an emergency.

> It's 71 days for federal trials

70 days from indictment or arraignment to trial, 30 days from arrest to information or indictment, under the Speedy Trial Act of 1974. But those timelines can be paused for many reasons. (Enforcement of the Constitutional rule does not use a hard timeline, but looks holistically at the length, reason, ans effect of delay and whether and how the defendant has asserted his right.)

Thanks for the correction!

> specifically that SBF knowingly and willingly engaged in fraud

He very well may go to prison for something other than defrauding FTX customers. See Al Capone for tax evasion and Elizabeth Holmes for defrauding investors (not patients).

For instance some of the money may really be gone but if he has tries to hide any of it he can get busted for that act. I don’t think it is safe for him to travel to the US or many other jurisdictions right now.

Also Billy Mitchell of Fyre Festival... wire fraud instead of bilking his concert attendees.

> Billy Mitchell of Fyre Festival

You mean Billy McFarland. Billy Mitchell appears entirely innocent of this ;-)

What would you say is different about this case, or what about the environment has changed, as compared to Madoff in 2008?

Madoff admitted to his crimes so it was easy to arrest him right away.

Ken Lay, who did not admit to crimes, took 3 years to be indicted and then was convicted.

And IIRC then died before penalties could be assessed so his widow got all of his ill-gotten gains scot-free.

So $2.5 million isn't nothing (not by a long shot), but 'scot-free' is probably not a fair characterization, especially considering she has a conservator monitoring all her purchases now (to make sure she's not hiding cash).[1]

Plus her sons, who actually turned their dad in: one killed himself over this, and the other died of lymphoma (won't comment on psychological stress, but you have to imagine the fallout from the scandal didn't help).

[1]https://www.npr.org/sections/thetwo-way/2009/06/ruth_madoff_...

I was talking about Ken Lay, not Madoff. Sorry if that was unclear.

No he wasn't. He died before the appeal was finished so the conviction was vacated.

What I love about Hacker News is that a person can be convicted of a crime, die while still convicted of that crime, but then have the conviction thrown out after they have left this mortal plane and someone will still be like "Ummm actually he was never convicted of any crimes"

I guess I'm glad that Alan Turing was never convicted of 'Gross Indecency' then! Makes the UK look a lot more progressive!

For those curious how that works see [1]. How common is this? I don’t recall ever hearing about it, even though I went to law school. I don’t know if I just forgot about or it just never came up.

https://en.wikipedia.org/wiki/Abatement_ab_initio

Madoff confessed.

Madoff was arrested fast because his sons went to prosecutors and admitted to the fraud. That's very strong evidence + direct witnesses vs. here where they have to prove fraud and gather evidence.

> What would you say is different about this case, or what about the environment has changed, as compared to Madoff in 2008?

Madoff confessed to his sons and said he was imminently going to surrender to authorities, his sons called the FBI, the FBI interviewed him at home (no arrest, no warrant, no indictment), and he confessed to the scheme being a large scale fraud to the FBI.

And Madoff was physically within US jurisdiction.

And Madoff had much clearer records and much less complicated an organization that the FTX network of companies, which seems to have been highly optimized to conceal specific evidence of fraud and theft by, between, and by insiders against the companies in the network.

Madoff was also involved in a highly regulated industry. That's one thing that confuses me about all of this. A main selling point - probably _the_ main selling point - for crypto has been that it allows users to avoid the current legal framework. And that was also the main reason FTX gave for moving to the Bahamas - there was much less regulations.

It's strange to see people actively seeking a space outside of the government's legal jurisdiction, and then getting incensed that the government isn't entering that jurisdiction more quickly to protect them when things inevitably go sideways.

You’re confusing things. Centralized exchanges like FTX are acting as asset custodians in the same way as a bank, or a stock broker. FTX is not a cryptocurrency.

Crypto users that espouse freedom from government are usually talking about being able to use crypto, on chain, without government interference. They don’t want to be taxed for using bitcoin as a currency, be able to use decentralized services without complex regulations and tax laws, etc. etc

I’ve never heard the case made that asset custodians should be able to steal assets from their customers regardless of the underlying asset.

It is so convenient that Madoff was the single mastermind behind everything and his children knew absolutely nothing.

When the scam fell apart he even confessed to them so they could immediatelly report him to the FBI.

After all they didnt know anything!

He definitely did everything on his own and definitely didnt make this move to save his children.

The fact that Madoff is the only one in prison while his innocent children and innocent employees are free shows that the justice system works!

The story of what happened to Bernie's family after he confessed is pretty tragic. Definitely appears as if they were just as surprised as everyone else, and struggled to cope with the dishonesty and destruction caused by a close family member.

One of his sons, Mark, committed suicide on the 2 year anniversary of Bernie's arrest. It was his second attempt. The suicide note he left (his first attempt) read in part: "Now you know how you have destroyed the lives of your sons by your life of deceit. F*ck you"

Let's be careful before rushing to judgment.

I agree with you, HOWEVER, we have yet to see or hear rumors of any type of search warrant(s) being executed in the Bahamas or the US.

As we saw with the Fyre Festival guy and other similar fraud cases, the government wants to move quickly to secure physical hard drives. In the case of that dude, Fyre happened on Thursday and they executed a search warrant at his apartment on Monday morning.

It’s possible that grand jury subpoenas have already been issued and served, but that doesn’t typically generate the criminal intent evidence they will need for this case.

We also know from former employees that routine business was typically discussed on Signal. That’s probably not a great sign for the government as they will need physical access to the devices used OR they will need to snag an iCloud (or other) device backup and grab the contents from there.

Your points about a speedy trial and losing a case are generally valid BUT the DOJ can always opt to file a superseding indictment once he is in custody. I don’t know the full deal with Extradition from the Bahamas but it’s likely it will take some time (several months). Despite this being a white collar case the government will absolutely seek to keep him incarcerated given his flight risk and resources unaccounted for. Anything he’s embezzled from FTX in the span shortly before bankruptcy will be used by the DOJ as proof he has hidden resources.

Remember, in pretrial arguments, they can come up with pretty far fetched or ridiculous arguments that have no merit or bearing later on. For example, in the case of Marcus Hutchins (the WannaCry kid), prosecutors argued he was potentially violent because he visited a shooting range several days prior. He was, in fact, in Las Vegas for DEFCON and went to one of many shooting ranges advertised on the Strip.

For Elizabeth Holmes, the original articles which brought her down came out in 2015. She was indicted 2018. She was sentenced 2022. These things take time and the Fed is very thorough. I'm fairly confident SBF is going to get jail time. How much, IDK. It is fascinating to see someone craft their lying in real-time, though.

For the sake of conversation; what happens if it can’t be proven that SBF engaged in fraud? Can criminal charges for negligence be brought forth? I’d imagine there’s a ton of civili liability in this whole mess.

Also, there is considerable career risk involved for the prosecutor. This is a high-profile case and the prosecutors can say goodbye to whatever ambitions they have if they botch this.

Double jeopardy also means no one gets to try again if it's fucked up.

Please. Some partner in A16Z is already working on the term sheet of SBF's next startup.

Is there anything to prevent him from moving to a country without a US extradition treaty in the meantime? That seems like a pretty big risk of waiting too long.

Make a list of the countries that don't have an extradition treaty.

Then cross off the countries that have people you screwed or governments that might find it politically advantageous to prosecute you. And then cross off the countries that might send you back even without an extradition treaty.

And then cross off countries that have worse internet than prison.

What's left?

>likely require proving criminal intent

Yes, and there's plenty of that, have you read his Twitter timeline? Have you seen his interviews, etc? The guy's indicting himself, lol.

> the inevitable indictment will likely require proving criminal intent, specifically that SBF knowingly and willingly engaged in fraud. The Justice Department won't indict SFB until they have ironclad evidence demonstrating as much.

IANAL but I'm not sure that's true. I believe they can charge him with fraud or negligence. The latter carries lesser penalties, and everything SBF is doing now is trying to steer the inevitable indictment in that direction.

Which exact federal crime do you mean by ‘negligence’ exactly?

The various fraud statutes require intent.

Relevant cite for what counts as intent to defraud for US federal stuff anyway.

‘Reckless indifference for truth or falsity’ and "The requisite intent under the federal mail and wire fraud statutes may be inferred from the totality of the circumstances and need not be proven by direct evidence."

It’s not a super high bar to clear in this case.

[https://www.justice.gov/archives/jm/criminal-resource-manual...]

He just has to skip up and lie to the feds once. Then he can and will be prosecuted for lying to federal agents.

Or, more likely, he just won’t talk to them.

does lack of intent waive responsibility for criminal negligence?

Depending on how connected you are.

Elizabeth Holmes was pretty well connected. She heads off to jail in April.

Also, contrary to popular claims made here and everwhere else, the prison she's going to does in fact seem to have fences. With razorwire even.

there are different charges for intentional vs non-intentional crime, with usually more lenient sentencing for non-intentional crime, so the distinction does matter

The legal definition of fraud requires intent

If you take the feds at their word, they seem to consider 'reckless disregard for the truth' as a stand-in for intent.

-This did not age well :)

Ha! I guess I should've predicted a "couple days" instead of a "couple years". Still, I hope people now realize that "failure" to indict immediately is not the same as failure to indict.

Reply on news.ycombinator.com