Speaker 1: Pushkin. Welcome to Judging Sam the trial of Sam Bankman Freed.
Speaker 1: I'm Michael Lewis. We're recording this on Tuesday, November seventh,
Speaker 1: five days after Sam was found guilty on all seven counts.
Speaker 1: I'm here with lawyer and former SDNY prosecutor Rebecca Mermelsty
Speaker 1: now of Omelvini and Myers, and our intrepid reporter Lydia
Speaker 1: Jean Cott.
Speaker 2: Hello, Rebecca, Hey Michael, nice to be back with you.
Speaker 1: Good to see you and l J. Glad we're at
Speaker 1: the end of this. Why don't you take it away
Speaker 1: since you were there for the last day and the verdict.
Speaker 3: Michael, I wanted to start by asking you a question.
Speaker 3: So you know you've spent a year and a half
Speaker 3: writing about Sam Bankman Freed. We spent a month working
Speaker 3: closely together covering this trial. What did you think when
Speaker 3: the verdict came out?
Speaker 1: My mind reeled back to a conversation I had with
Speaker 1: Sam when he was under house arrest, when I asked
Speaker 1: him what he thought the odds were that he could
Speaker 1: come out of this with anything but a conviction, and
Speaker 1: he said he thought it was about ten percent. And
Speaker 1: I remember thinking I wouldn't put it there, I'd put
Speaker 1: it had a three to five is what I thought,
Speaker 1: Roughly the odds that the New York Jets win the
Speaker 1: Super Bowl after Aaron Rodgers is hurt kind of thing.
Speaker 1: And so going in it was an odd event, right,
Speaker 1: because even Rebecca was saying weeks ago, like one hundred
Speaker 1: out of one hundred prosecutors, she knows what'd say, this
Speaker 1: thing is going to end with a conviction. There was
Speaker 1: this should have been a total absence of suspense, like,
Speaker 1: of course, this is what's going to happen. And yet
Speaker 1: even so this still a little suspense. And this suspense
Speaker 1: comes from you never know what people are going to do.
Speaker 1: There are twelve people on this jury. You never know
Speaker 1: what's going through their heads. They've heard a kind of
Speaker 1: weird slice of a story and you don't know how
Speaker 1: they react. So even now it seemed to me a
Speaker 1: certain thing that he was going to be convicted. And
Speaker 1: even though if I'd been on the jury, I'd devoted
Speaker 1: to convict, I felt a little shock when he was convicted.
Speaker 1: It's an odd contradiction. What did you think?
Speaker 3: It felt like that in the courtroom too. We all
Speaker 3: were expecting it, But then when it happened, it felt
Speaker 3: a little shocking. And also I think what stood up
Speaker 3: to us is it felt so grave. And I'm curious, Rebecca,
Speaker 3: as a prosecutor, you must have been in the courtroom
Speaker 3: when convictions like this have happened. What's it feel like
Speaker 3: for the prosecutor that moment.
Speaker 2: Yeah, I think it does feel very grave. And I
Speaker 2: think that even when you have every confidence in the outcome,
Speaker 2: Michael's right, that there's a strange suspense as you watched
Speaker 2: the drama unfold. And I imagine I wasn't in the courtroom,
Speaker 2: litty Gene, but I imagine it unfolded as it always does,
Speaker 2: which is, there's a report that the verdict is in,
Speaker 2: and the jury files in right, and they and they
Speaker 2: pass the envelope to the judge and the judge looks
Speaker 2: at it and everyone's watching the judge's face read it,
Speaker 2: and the judge passes it back and it's kind of dramatic.
Speaker 2: And so I think that is how prosecutors feel too,
Speaker 2: just like everyone else.
Speaker 3: And I'm curious, you know, moving to the sentencing, you
Speaker 3: know it's not scheduled until the end of March, which
Speaker 3: feels very far away. What's happening right now, like what's
Speaker 3: going to happen between now and March.
Speaker 2: Yeah, so it does feel far away, but I think
Speaker 2: not at all unusual. The typical schedule is probably one
Speaker 2: hundred and twenty plus days, and the biggest reason for
Speaker 2: that is that the probation department has to prepare what's
Speaker 2: called a pre sentence report. It's a big document. It's
Speaker 2: kind of have all kinds of information in it for
Speaker 2: the judge to consider it sentencing, and it's going to
Speaker 2: have information about this offense and what happened here, even though,
Speaker 2: of course in this case the judge presided over the
Speaker 2: trial and heard it. But it's also going to have
Speaker 2: all kinds of information about the defendant. The defendant will
Speaker 2: be interviewed, Sam Bankmin Freed, family and friends may be interviewed.
Speaker 2: It often has very personal information about the circumstances of
Speaker 2: someone's life. I'm not sure that's going to be the
Speaker 2: case here, but often people who find themselves in mess
Speaker 2: with the criminal justice system have been victims of all
Speaker 2: kinds of things in life, of circumstance, of family issues,
Speaker 2: of medical issues, and so all that information gets compiled
Speaker 2: and put into this document, and that's just time consuming,
Speaker 2: and that's the biggest reason I think that there's so
Speaker 2: much of a delay. And then, of course the parties
Speaker 2: will submit written submissions to the judge, both the government
Speaker 2: and Sam Bankmin Freed's lawyers. His may be accompanied by
Speaker 2: letters of support from family and friends and people who
Speaker 2: have something positive to say about him that's not about
Speaker 2: this case, right, that no one is all good or
Speaker 2: all bad, and he was a person and he, you know,
Speaker 2: I'm sure has people who care about him and want
Speaker 2: to talk about aspects of him as a person that's
Speaker 2: not just this.
Speaker 1: Rebecca, I'm curious if you would make a guess at
Speaker 1: what his sentence is going to be.
Speaker 2: This is a dangerous game, I think in terms of predicting,
Speaker 2: because I just I don't think it's possible to know.
Speaker 2: I would be very surprised to see something less than
Speaker 2: ten years, and pretty surprised to see something north of thirty.
Speaker 1: I tell you why, I asked, because I've been polling
Speaker 1: his lawyers, people close to the case, and the numbers
Speaker 1: are all over the map. How do you think about it?
Speaker 2: Though, I think it's somewhat of a gut instinct, having
Speaker 2: just been at a lot of sentencing, so it's hard
Speaker 2: to put in towards exactly how we get there. I
Speaker 2: think here, and we've talked about this a little bit before,
Speaker 2: the sentencing guidelines are basically useless because the recommended sentence,
Speaker 2: because the dollar amounts are so high, is going to
Speaker 2: be life and that's just not like a meaningful, helpful
Speaker 2: data point. There's also no mandatory minimum, so in some
Speaker 2: cases you would have a floor, we don't have one.
Speaker 2: I spent years in the securities fraud unit in the
Speaker 2: Southern District of New York that did a lot of
Speaker 2: white collar sentencings, and I think for the average white
Speaker 2: collar defendant, it's really unusual. It's really unusual to get
Speaker 2: over fifteen, just anecdotally, like, not for any particular reason.
Speaker 2: It just you don't see it that much. And I
Speaker 2: think part of the reason you don't see it that
Speaker 2: much is that for the most part, and these are
Speaker 2: broad generalizations, to be clear, but I think judges are
Speaker 2: much less worried about incapacitation in a white collar case
Speaker 2: than they are in a violence case. Right, So I'm
Speaker 2: thinking about the purposes of sentencing, and there's statutory guidance
Speaker 2: on this. It has a number of purposes. Right, it's
Speaker 2: supposed to provide just punishment. It's supposed to deter not
Speaker 2: just the defendant who's being sentenced from committing future crimes,
Speaker 2: but offer something that's called general deterrence. The public should
Speaker 2: know this is serious and they shouldn't do it. And
Speaker 2: sometimes you have someone who's so violent and so dangerous
Speaker 2: that the court feels that the only way to keep
Speaker 2: the public safe from them is to get them off
Speaker 2: the streets, you know, permanently or until they're very old. Right,
Speaker 2: That's mostly not true. In a white collar case. The
Speaker 2: chances that Sam Bankman freed, whatever amount of time he
Speaker 2: serves in prison, will be in a position to commit
Speaker 2: a enormous financial fraud again is almost zero. So that's
Speaker 2: not a concern. And that's generally true, I think. And
Speaker 2: that's why you rarely see sentences super super super super
Speaker 2: high in the white collar space because judges don't think
Speaker 2: it's necessary. Why do I think it's got to be
Speaker 2: more than ten because you see white collar defendants get ten, eleven,
Speaker 2: twelve years big huge frauds, you know, and this is
Speaker 2: a big, huge fraud, right, And so I just think
Speaker 2: anything less than that would seem kind of not enough
Speaker 2: to a judge. And then I think you think about
Speaker 2: general deterrence, and I predict that Judge Caplin's going to
Speaker 2: talk about general deterrence at sentencing because this case had
Speaker 2: a lot of publicity and crypto is still kind of
Speaker 2: an emerging area, and so a lot of judges will
Speaker 2: say they don't believe in the concept of general deterrence.
Speaker 2: They don't really believe that the sentence imposed on one
Speaker 2: person affects the behavior of the public. But here there's
Speaker 2: a strong argument that it really might. So I think
Speaker 2: you're going to see that be a driving force.
Speaker 1: Does he get punished for testifying on his own behalf?
Speaker 3: Yes?
Speaker 1: How much?
Speaker 2: I think the answer to these things is definitely yes,
Speaker 2: But how much is hard to say. There are systemic
Speaker 2: frameworks that mean that the answer is yes, and then
Speaker 2: there's the practical reality. So, as a systemic framework issue,
Speaker 2: if he had pled guilty to everything, no negotiated benefit
Speaker 2: with the government, just pled what we would call open
Speaker 2: without any particular agreement, necessarily, he would have gotten a
Speaker 2: three point reduction under the guidelines for what's called acceptance
Speaker 2: of responsibility. And so I think we've talked about the
Speaker 2: guidelines before. But it's essentially a big algorithm for sentences,
Speaker 2: and it spits out a recommended sentence. There's pluses and minuses,
Speaker 2: and acceptance of responsibility is a three level reduction, So
Speaker 2: that's going to correspond to some reduction in a recommended
Speaker 2: sentence now here, because the guidelines are so so so high,
Speaker 2: they're actually literally off the charts, it doesn't actually change
Speaker 2: the number it spits out. But holistically, the judge recognizes
Speaker 2: this person made a mistake and then they admitted it,
Speaker 2: and they took responsibility, and they didn't force anyone to
Speaker 2: prove it, and they didn't dispute it, and they saved
Speaker 2: everyone in the time and energy, and that has value.
Speaker 2: So there's that three points. People also, prosecutors and defense
Speaker 2: layers talk about a trial penalty, and there they're not
Speaker 2: talking about a numerical algorithm. They're talking about holistically, not
Speaker 2: just that the judge punishes you for having not accepted responsibility,
Speaker 2: but that the level of detail and understanding the judge
Speaker 2: has about what you did is very, very different. If
Speaker 2: that judge sits for days or weeks listening to the evidence,
Speaker 2: then if they read a submission from the government that
Speaker 2: gives him the details, right, and so some judges kind
Speaker 2: of really that changes the way they view a defendant.
Speaker 2: It's hard to measure, but you have the sense that
Speaker 2: it's changing the sentence. And then I think testifying fits
Speaker 2: into both of those in the same way, which is
Speaker 2: there is in those same guidelines a two point enhancement
Speaker 2: for obstructing justice, which includes testifying in a perjurious way. Lying.
Speaker 1: Yeah.
Speaker 2: Again, here it doesn't actually move the math because the
Speaker 2: math is going to be life. But also the judge
Speaker 2: feels like, you know, what is wrong with you? Why
Speaker 2: did you do this? And my experience as a prosecutor
Speaker 2: is that judges are much much much more offended when
Speaker 2: defendants lie to them or in their courtroom then about
Speaker 2: the defendants lies that preceded it and brought them to
Speaker 2: the court room. So you know, it comes with I
Speaker 2: think it comes with the risk of a heavy consequence.
Speaker 2: Probably we won't know what would it have been and
Speaker 2: what it is. We won't get that kind of clarity
Speaker 2: from the ultimate sentence.
Speaker 1: You read the transcripts of Sam's testimony under cross Yeah,
Speaker 1: what's the first lie that jumped out at you? And
Speaker 1: what was the kind of biggest lie that jumped out you.
Speaker 2: To me, the thing that jumped out the most about
Speaker 2: his testimony was actually not what's what's a lie and
Speaker 2: what's true? It's how different he was on direct than
Speaker 2: he was on Cross. And it's interesting to me because
Speaker 2: prosecutors always talk about in closing and defense lawyers do too,
Speaker 2: what a witness's demeanor was, how you should evaluate if
Speaker 2: they were telling the truth. And one thing that all
Speaker 2: lawyers point to when arguing about whether or not a
Speaker 2: witness should or shouldn't be believed is that difference, right,
Speaker 2: Were they different when asked questions by one side than
Speaker 2: the other. And so you expect and I'm sure this
Speaker 2: did happen that Sam's lawyers talk to him about not
Speaker 2: just what his demeanor would be like when they ask questions,
Speaker 2: but what it should be like with the government and
Speaker 2: hard to know sort of how we got where we are.
Speaker 2: But he really did not take that advice to heart,
Speaker 2: and so he was giving long explanations and kind of
Speaker 2: chatty and engaged on direct and I'm cross he was
Speaker 2: very short. I don't remember, I don't remember. I'm not sure.
Speaker 2: He must know his lawyers must know that these clips
Speaker 2: exist of him saying things to the contrary, and it's
Speaker 2: not a good look.
Speaker 1: Yeah, you know where I shot up in my seat
Speaker 1: in the courtroom. It was such a trivial moment. But
Speaker 1: where I just went, oh my god, why are you
Speaker 1: doing this? Was when they asked him if he had
Speaker 1: taken a private plane to the super Bowl, and he
Speaker 1: didn't remember. I was on that plane with him, and
Speaker 1: it's very easy to remember. Why bother to even do that?
Speaker 1: It was a bizarre It was a bizarre sort of performance,
Speaker 1: and I didn't understand it. On the last question on
Speaker 1: this because I don't want to lose this. How unusual
Speaker 1: is it? You and I both thought you thought I
Speaker 1: think more strongly than I did. But I still kind
Speaker 1: of agreed with you that he was going to change
Speaker 1: his mind and not testify. I was persuaded it was
Speaker 1: such a bad idea that he just wouldn't do it.
Speaker 1: It was a bad idea, and he did it. How
Speaker 1: often do you see someone who is in his situation
Speaker 1: take the stand.
Speaker 2: There are consequences to testifying and being convicted, and so
Speaker 2: even if you expect that you're going to be convicted,
Speaker 2: you're paying a heavy price for using your hail. Mary pass,
Speaker 2: it's probably not going to work, and so I don't
Speaker 2: know that most people make the decision, which is why
Speaker 2: I did not think that Sam was going to testify.
Speaker 2: For sure, people generally speaking don't testify that much, I think,
Speaker 2: no matter how severe the evidence, you sometimes see it
Speaker 2: from someone who has some kind of message they want
Speaker 2: to share, Right, So it's not really about being acquitted,
Speaker 2: it's about using the platform. You see it sometimes in
Speaker 2: terrorism cases, right, someone who gets on the stand and
Speaker 2: says death to America. It's not helping their cause, but
Speaker 2: that's really not their purpose. And sometimes you see it
Speaker 2: from people who can't accept the consequence and want to
Speaker 2: try to give their explanation. But it's uncommon relatively speaking.
Speaker 1: Right, what other things can they can cap and consider
Speaker 1: when he's deciding on the sense?
Speaker 2: Yeah, so almost anything is the answer. I mean, obviously
Speaker 2: there's some impermissible things, but there are statutory factors like
Speaker 2: the nature and circumstances of the offense, the need for
Speaker 2: just punishment, the need to avoid unwanted sentencing disparities, which
Speaker 2: is lawyers speak for it should be fair relative to
Speaker 2: other people who are similarly situated. Now here who's similarly situated,
Speaker 2: is of course a question what's the right benchmark to
Speaker 2: compare it to. I think a lot of people have
Speaker 2: made the point that the closest analogy is maybe made
Speaker 2: Off in terms of you know, size and loss and
Speaker 2: that kind of thing.
Speaker 1: You know.
Speaker 2: On the other hand, you know, Sam is relatively speaking,
Speaker 2: a younger person and made Off it's spent a essentially
Speaker 2: a lifetime doing it. Here it's a narrower contained time.
Speaker 2: It doesn't seem like the right analogy to me to
Speaker 2: think about how much time Sam Bankman Freed should get. Right,
Speaker 2: if Madeoff had gotten twenty five years, that probably would
Speaker 2: have been a life sentence too, didn't It was kind
Speaker 2: of academic. But I think the judge can consider almost
Speaker 2: anything right. The judge can consider a person's medical conditions.
Speaker 2: The judge can consider childhood trauma. I'm not suggesting that
Speaker 2: exists here. I have no idea, but difficult life circumstances,
Speaker 2: family members. You know, you sometimes see arguments that a
Speaker 2: defendant has a child or a parent who needs care
Speaker 2: and the defendant sort of needs to be there. So
Speaker 2: almost anything.
Speaker 1: The jury wasn't allowed to hear it. But do you
Speaker 1: think it would matter to Kaplan to learn that the
Speaker 1: customers were going to get their money back.
Speaker 2: It's a great question, and I think we'll find out
Speaker 2: right certainly, that will be something that happens at sentencing.
Speaker 2: There's going to be this discussion on balance. I don't
Speaker 2: think so, because I think what kaplain will say is
Speaker 2: that was just dumb luck, right, It wasn't that. For example,
Speaker 2: you did this then of your own volition, you paid
Speaker 2: everybody back before you got caught, and so, yes, you
Speaker 2: still committed the crime, but you've demonstrated that you're sorry
Speaker 2: and you learned your lesson and you wanted to do
Speaker 2: the right thing here. Just by sheer luck of some
Speaker 2: other investment. It looks like there's enough money to pay
Speaker 2: everyone back. It doesn't really change what his culpability is.
Speaker 2: And so maybe on the balance, if you had some
Speaker 2: little old ladies, you know, submitting letters at sentencing talking
Speaker 2: about how they lost their life savings and now they
Speaker 2: couldn't afford you know, milk and eggs, maybe that would
Speaker 2: move the judge. But I don't think it's going to
Speaker 2: matter here.
Speaker 3: So I have a question. There's this other trial I
Speaker 3: write that scheduled early in March, where there's a whole
Speaker 3: set of other charges that are being brought against Sam Macmonfreed.
Speaker 3: What are the chances you think that that trial is
Speaker 3: going to happen.
Speaker 2: I don't know. On balance, I don't think it should happen.
Speaker 2: But it's a little complicated because some of the charges
Speaker 2: that are in round two are essentially the same charges
Speaker 2: has actually existed in round one. The first trial involved
Speaker 2: the substantive count, but it didn't include the conspiracy or
Speaker 2: vice versa, and so it's all the same conduct. It's
Speaker 2: all the same core wrongdoing. There are a few things
Speaker 2: like the FCPA charge, the foreign bribery the Foreign Corrupt
Speaker 2: Practices Act, which prohibits bribery of foreign officials. So there
Speaker 2: was an allegation that SBF paid a bribe to free
Speaker 2: up money right in a foreign country, and that was
Speaker 2: not made a part of this trial. In terms of
Speaker 2: the criminal conduct, you know, arguing against there being another
Speaker 2: trial he's facing. You know, if he got the maximum sentence,
Speaker 2: it's functionally a life sentence probably right, he's thirty years old.
Speaker 2: I don't think the ultimate sentence is going to be
Speaker 2: changed by this Judge Kaplan can consider the conduct at
Speaker 2: the first sentencing, So just Kapain could say, I am
Speaker 2: making a finding as a judge by a preponderance of
Speaker 2: an evidence that you did do these other things, and
Speaker 2: I'm considering that when I sentence you. So in that sense,
Speaker 2: there's really no reason to have another trial. I think
Speaker 2: the problem for the Ustorney's office is they brought those charges.
Speaker 2: They said it was important to bring those charges. They
Speaker 2: didn't drop them. They said they weren't going to have
Speaker 2: a second trial. It's a little hard for them to
Speaker 2: drop them now and just say never mind. And he's
Speaker 2: not gonna But there's only two ways to resolve them.
Speaker 2: Three there's a trial, he pleads guilty, or they say
Speaker 2: forget it. And he's not gonna plead guilty because he
Speaker 2: wants to appeal presumably this conviction. There's not much point
Speaker 2: in appealing it if you're going to jail for something
Speaker 2: else anyway. So I think they're a little bit stuck
Speaker 2: in terms of how to move forward. I'm optimistic they'll
Speaker 2: find a way to resolve it in some way and
Speaker 2: not to waste the time and effort, But I it
Speaker 2: could go either way.
Speaker 3: So after all of these proceedings are over, Sam makemanfreed
Speaker 3: will go to prison. How is it determined what prison
Speaker 3: he goes to.
Speaker 2: So I am definitely not an expert on this, I
Speaker 2: should say it's not something for the most part prosecutors
Speaker 2: are involved in. There is a designation process that's run
Speaker 2: by the Bureau of Prisons and one of the things
Speaker 2: that feeds into that is that PSRI I was talking about.
Speaker 2: So information from that will affect the designation. There's an assessment.
Speaker 2: Some of that, you know, is going to be stuff
Speaker 2: that's probably not applicable. Here are you in a gang,
Speaker 2: do you have a violent criminal history? Have you had
Speaker 2: infractions while waiting to be designated? You know, did you
Speaker 2: do they find a weapon in your cell? And that
Speaker 2: kind of thing. Some has to do with what your
Speaker 2: needs are. So for example, you know, if you had
Speaker 2: a very serious medical issue and you were going to
Speaker 2: need chemotherapy in prison, that would limit where you could go.
Speaker 2: There's not that many facilities that provide that. If you
Speaker 2: need drug treatment, right, that's going to factor in. So
Speaker 2: there are all these kind of components to it. And
Speaker 2: then there's geography. So you'll see at sentencing almost always
Speaker 2: that defense counsel will say at the end of the
Speaker 2: judge you know, will you recommend to the Bureau of
Speaker 2: Prisons that he'd be designated close to this city or
Speaker 2: to this particular facility, and the judge cannot. It's up
Speaker 2: to the Bureau of Prisons at the end of the day,
Speaker 2: but BOP considers that recommendation, and judges by and large
Speaker 2: make the recommendation, and then the Buer of Prisons will decide.
Speaker 2: And then because he's already in custody, he will then
Speaker 2: be transferred from where he's being held now at MDC
Speaker 2: in Brooklyn to that more permanent facility.
Speaker 1: Judging Sam will be right back. Welcome back to Judging Sam.
Speaker 1: The trial of Sam Bankman Freed.
Speaker 3: Michael, I'm wondering if you've spoken to any family members
Speaker 3: of Sam Bankman freed, or maybe employees at FTX. You know,
Speaker 3: it's been a couple of days since the verdict came out,
Speaker 3: and I'm curious what people close to him and around him,
Speaker 3: how they are feeling about it.
Speaker 1: So very oddly, apart from Caroline, Nishad and Gary, I
Speaker 1: stayed in touch with all of these people, all the
Speaker 1: people who might have been witnesses, some of the people
Speaker 1: who were witnesses, and I've heard from a bunch of them,
Speaker 1: the FTX people. And it's interesting because in the list
Speaker 1: of victims, these people are at the top because they
Speaker 1: lost not only all their money, but they know their
Speaker 1: reputations went with it, and they thought they were part
Speaker 1: of one enterprise and it turned out to be something
Speaker 1: entirely different. Of all the people on the planet who
Speaker 1: deserve who might be angry at Sam Vangrafey, you would
Speaker 1: think they would be it, and that isn't there the
Speaker 1: general feeling. The general feeling is kind of sadness. Natalie Pim,
Speaker 1: his scheduler and the head of public relations, who sat
Speaker 1: through most of this trial, was weeping when it was over.
Speaker 1: She just thought. I think she had the feeling that
Speaker 1: she didn't see the Sam she knew in the courtroom.
Speaker 1: I think his parents have been living with both dread
Speaker 1: and grief for the last year, and the dread is
Speaker 1: now gone. It's happened, and they've just got the grief,
Speaker 1: and that's an easier emotion to cope with. I think
Speaker 1: that it's like, Okay, this has happened, and now we
Speaker 1: move on. So you know, the image if you asked me,
Speaker 1: like what I would remember from this trial, like top
Speaker 1: five images apart from the quality of the cafeteria. Number
Speaker 1: one would be his mother in profile, with her jaw
Speaker 1: trembling the whole time. She manifested the shock of what
Speaker 1: she was going through. I mean, it was just all
Speaker 1: there on her face. And I hope the world doesn't
Speaker 1: go after them. They deserve to be kind of left.
Speaker 3: And I'm wondering about you know, speaking of Sam Bankman
Speaker 3: Fritz close associates, Rebecca, what do you think is going
Speaker 3: to happen to the cooperating witnesses? To Caroline Allison, Gary
Speaker 3: long Nishad saying, I'm.
Speaker 1: Very curious about this too. What do you think in.
Speaker 2: Any other case, with any other judge, I would have said,
Speaker 2: with almost one hundred percent confidence probation, the default sdn
Speaker 2: Y sentence for a first time offending white collar defendant
Speaker 2: who's a cooperator is not to go to jail. And
Speaker 2: typically where you saw cooperators do jail time despite the
Speaker 2: fact that they were cooperating, was in cases where there's really
Speaker 2: serious violence. You know, someone who participates in a murder
Speaker 2: and is going to get a big reduction, but they're
Speaker 2: not going to get off scott free. I think that
Speaker 2: probably is still true here. These guys are are also
Speaker 2: like SBF, they're relatively young. There's no indication that they
Speaker 2: have any other wrongdoing in their past. And I think
Speaker 2: that is still probably right that the judge will say, look,
Speaker 2: on the one hand, this was very serious and you
Speaker 2: participated anew And on the other hand, these guys, these
Speaker 2: guys started cooperating really fast. They clearly owned up to
Speaker 2: it immediately. They didn't wait to see which way the
Speaker 2: wind was blowing. They really came in. And I think
Speaker 2: that's probably where it lands. And Kaplan's a hard, harsh sentencer,
Speaker 2: and is there a world where he says this was
Speaker 2: too serious and too big and you have to go
Speaker 2: to jail. I think it could happen. I still think
Speaker 2: it's unlikely. And if that happened, I would strongly suspect
Speaker 2: sentences of a year and a day, which is a
Speaker 2: weird sentence. But in the federal system, they abolished parole
Speaker 2: in the eighties and after that they have a system
Speaker 2: of fifteen percent for good time get credit for time off.
Speaker 2: You can only get fifteen percent time credit for sentences
Speaker 2: that are longer than a year. So a person who
Speaker 2: gets a year serves a full year. A person who
Speaker 2: that's a year and a day serves, you know, ten
Speaker 2: and a half months, and so you almost never see
Speaker 2: its ends of exactly here.
Speaker 1: It's funny, you know, when the right after the verdict,
Speaker 1: I found myself engaged in my own little undoing project.
Speaker 1: When something bad happens, your imagination sort of like tries
Speaker 1: to undo it, like how would this have been prevented?
Speaker 1: And let me do a question for you, LJA, listening
Speaker 1: to the whole thing, I put that question to you,
Speaker 1: how does this get? How is this? This whole thing
Speaker 1: most likely prevented? What pops to mind.
Speaker 3: If that wonder who had to catch a plane had
Speaker 3: been replaced by a different er instead of trying to
Speaker 3: move everything along to finish the trial before that j're
Speaker 3: got on that plane. You can't help but wonder if
Speaker 3: things would have gone differently? Right, It's hard to imagine,
Speaker 3: but that just seems one simple, like sliding doors moment
Speaker 3: that happened. What do you think is the one moment
Speaker 3: that would have made everything different?
Speaker 1: I mean, there are an infinite number of ways it
Speaker 1: might not have happened, but I bet Nishad and Caroline
Speaker 1: and maybe even Gary, Gary, unless sure of when it
Speaker 1: all fell apart. Their minds reeled back to early twenty
Speaker 1: eighteen when Alimeter Research was in free fall. Half the
Speaker 1: firm thought Sam was a criminal or just criminally negligent
Speaker 1: and left, and they, with some reluctant stayed and then
Speaker 1: it all recovered and it got better, and they had
Speaker 1: this firm in which Sam was now sort of unquestionable.
Speaker 1: He'd been questioned and proven right, and they were both
Speaker 1: Nashad and Caroline at that moment were all kind of
Speaker 1: on the fence whether to stay with them or whether
Speaker 1: to go. I think that's the moment where like if
Speaker 1: they had just left, none of this would have happened.
Speaker 1: Then it had just the whole place had just ended.
Speaker 3: You don't think Sam Bnkman Freed would have found other people, No, if.
Speaker 1: You had nobody now, I think that they had the
Speaker 1: power to just end his career as a as a
Speaker 1: crypto trader there. But there are a million of ways
Speaker 1: this money. But you replay his life. If you had
Speaker 1: met Sam Bankmin Freed when he was twenty years old,
Speaker 1: you would never imagine this is where he would end up.
Speaker 1: Kind of thing. I know. I met a lot of
Speaker 1: people on Wall Street when they were twenty two years old,
Speaker 1: and some of them went on to commit financial fraud.
Speaker 1: And it was pretty predictable, you know, Yeah, it doesn't
Speaker 1: surprise me that guy did that. This is a strange case.
Speaker 3: In the end, Caroline gary Nishad, they all turned on Sam,
Speaker 3: and a lot of people who are close to Sam
Speaker 3: turned on him. But I guess what I'm curious about
Speaker 3: is what drew them to him. Why did Caroline Ellison
Speaker 3: and others, you know, you were there for this. Why
Speaker 3: did they love Sam?
Speaker 1: Why was she in love? Why was she in love
Speaker 1: with him? Why was it Sam that broke up with
Speaker 1: her in May of last year? Why wasn't she fleeing
Speaker 1: in the other direction? So I think this, why did
Speaker 1: everybody like him? You know, it's a multi part answer.
Speaker 1: But in their little world, their rationalist, effective, altruist world,
Speaker 1: he seemed mesmerizingly smart to me, like they just thought
Speaker 1: they were intimidated by his intellect. They just thought he
Speaker 1: was the smartest person in the room. He made being
Speaker 1: a nerd a little feel strong. He gave him all
Speaker 1: kind of courage. And I think it was also true
Speaker 1: that with a lot of the people, and several people
Speaker 1: in the book say this who were drawn to him.
Speaker 1: He had this ability to make people feel like they
Speaker 1: had a purpose and when it all fell apart, that
Speaker 1: was one of the things. Many of these people's voice
Speaker 1: was what am I going to do now? Without a purpose?
Speaker 1: He was able to create that feeling, So that was
Speaker 1: part of it. For the wider society that sort of
Speaker 1: embraced him. Oddly, I think a lot of his appeal
Speaker 1: was his seeming artlessness and openness. That he seemed like
Speaker 1: he had nothing to hide. He was just all out there.
Speaker 1: And in fact, there was a very funny way that
Speaker 1: I didn't write and this didn't make its way into
Speaker 1: my store. But April of last year, at Sam's Crypto
Speaker 1: Bahama's conference, I bumped into someone who would help me
Speaker 1: with The Big Short. He could have been a character
Speaker 1: in The Big Short. He was one of the people
Speaker 1: who made that trade and was, you know, really smart,
Speaker 1: unbelievably cynical Wall Street person who saw through the veneer
Speaker 1: of Wall Street to see that these firms were doing
Speaker 1: all this bad stuff. And he just adored Sam. And
Speaker 1: I remember asking, you know why you like this guy
Speaker 1: so much? And he said, this is a loose quote.
Speaker 1: He said, how often do you meet someone with twenty
Speaker 1: billion dollars who's not a douchebag, who has nothing to hide,
Speaker 1: and that's how he felt the people. He felt like
Speaker 1: he had nothing to hide, and so it's incredible that
Speaker 1: his defining trade is what he hid. So anyway, it
Speaker 1: was you won't believe this, LJ, because you see Sam
Speaker 1: and you see the know it all at the lunch
Speaker 1: table who won't shut up. It is that ass to him.
Speaker 1: But I promise you that if you had met Sam
Speaker 1: Bankminfreed a year and a half ago, you'd have thought
Speaker 1: it was odd, but you would you would have liked him,
Speaker 1: And right now you'd be punishing yourself for liking judging.
Speaker 1: Sam will be right back. We're back with one last thing, LJ.
Speaker 1: What do you got for me?
Speaker 3: So, Michael, throughout this trial you've talked about how you've
Speaker 3: also been learning about how the legal system works.
Speaker 2: You look so skeptical.
Speaker 1: No, no, no, it's it's true. I mean Rebecca is
Speaker 1: the one who should look skeptical. I mean, yes, it's
Speaker 1: the first time I've really paid that close attention to
Speaker 1: a criminal trial.
Speaker 3: And what do you feel like you learned?
Speaker 1: It's frightening, it's frightening your toast. If the federal government
Speaker 1: charges you with a crime, you're just done. And in
Speaker 1: this case, I don't think the outcome was unjust, but
Speaker 1: it feels like the system has a capacity for credible injustice.
Speaker 1: It made me think, if there's this whole rawlsy and
Speaker 1: thing about the veil of interest, that if you I
Speaker 1: allow you, I allow you to design the system, but
Speaker 1: I don't allow you to choose what your role in
Speaker 1: the system will be. And if I said to you,
Speaker 1: you get to design the system of justice, but you
Speaker 1: might end up a defendant. You might not end up
Speaker 1: a prosecutor or a defense lawyer, or a judge or
Speaker 1: a member of the jury. You're going to be in
Speaker 1: there somewhere. You might be a defendant. I don't think
Speaker 1: anybody would design the system the design a system that
Speaker 1: was that was fairer and showed a little more mercy
Speaker 1: towards the defendant.
Speaker 2: I think, Rebecca, it's funny. I was thinking of something
Speaker 2: much more practical and less philosophical. Which is my last
Speaker 2: day of criminal law, my first year of law school.
Speaker 2: At the professor said, at the end of the day, look,
Speaker 2: most of you will never need the substance of this
Speaker 2: in your professional lives. Most of you will not be
Speaker 2: lawyers involved in the criminal justice system. Indeed, more of
Speaker 2: you are likely to be arrested than to need this professionally.
Speaker 2: And if you remember one thing from this class, it's
Speaker 2: don't talk to the police. And he was I think
Speaker 2: mostly being tongue in cheek about the chances that a
Speaker 2: bunch of IVY leaders were going to get arrested. But
Speaker 2: I do think that that is important life advice. Actually,
Speaker 2: if you get at the knock at your door and
Speaker 2: it's the FBI or a police officer offers you the
Speaker 2: opportunity to explain something, you should call a lawyer. It
Speaker 2: is not a good idea to try to navigate the
Speaker 2: system without professional advice, and you should make calling a
Speaker 2: lawyer the first thing you do. So it's not about roles,
Speaker 2: but a pitch for a practical approach to finding yourself
Speaker 2: the defendant.
Speaker 1: That was, as usual, Rebecca, much more useful than what
Speaker 1: I had to say.
Speaker 3: Michael Lewis and Rebecca Mermelstein, thank you so much. This
Speaker 3: was really great.
Speaker 1: By bye bye. This episode of Judging Sam was hosted
Speaker 1: by Lydia jen Kott. Judging Sam is a production of
Speaker 1: Pushkin Industries and hosted by me Michael Lewis, with special
Speaker 1: assists this season from Jacob Weisberg and Jacob Goldstein. Our
Speaker 1: associate producer is Nisha Venken. Our executive producer is Catherine Gerdeaux.
Speaker 1: Our reporter is Lydia jen Kott. Our editor is Sophie Crane.
Speaker 1: Our music is by stell Wagon Simpinet at Pushkin Thanks
Speaker 1: also to Greta Cone, Sarah Nix, Eric Sandler, Jason Gambrel,
Speaker 1: Nicole opten Bosch, Bryan stre Brenneck, Christina Sullivan, and Malcolm Gladwell.
Speaker 1: To find more Pushkin podcasts, listen on the iHeartRadio app,
Speaker 1: Apple Podcasts, or wherever you listen to your podcasts. If
Speaker 1: you'd like to access bonus episodes and listen ad free,
Speaker 1: don't forget to sign up for a Pushkin Plus subscript
Speaker 1: at pushkin dot Fm, slash Plus, or on our Apple
Speaker 1: show page.