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Speaker 1: This is Bloomberg Law with June Brusso from Bloomberg Radio.

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Speaker 2: Manhattan District Attorney Alvin Bragg is opposing efforts to dismiss

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Speaker 2: President elect Donald Trump's hush money conviction, but he has

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Speaker 2: expressed openness to delaying sentencing until after Trump's second term.

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Speaker 2: In a court filing today, the DA said Trump's forthcoming

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Speaker 2: presidency isn't grounds for dropping a case that was already tried,

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Speaker 2: but quote, given the need to balance competing constitutional interests,

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Speaker 2: consideration must be given to potentially freezing the case until

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Speaker 2: after he's out of office. Trump's lawyers are hoping to

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Speaker 2: toss out the case completely, telling the judge in a

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Speaker 2: letter that there are strong arguments for dismissal, including the

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Speaker 2: Supreme Court's July decision on presidential immunity in criminal cases.

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Speaker 2: But Bragg said Trump's argument that he can't be prosecuted

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Speaker 2: as president elect has no bearing on the state's case

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Speaker 2: after a Manhattan jury unanimously found him guilty at a

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Speaker 2: time when he was not immune from criminal prosecution. The

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Speaker 2: President elect was convicted in May of falsifying business records

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Speaker 2: to cover up a scheme to influence the twenty sixteen election.

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Speaker 2: Joining me is Bloomberg Legal reporter Eric Larson, who's been

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Speaker 2: covering all these cases. Eric tell us about Alvin Bragg's

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Speaker 2: letter to the judge.

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Speaker 3: So the judge overseeing the hush money case had asked

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Speaker 3: the prosecutor to let him know his recommendation for what

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Speaker 3: should happen next in the case given Trump's election victory.

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Speaker 3: So the letter had a bit of a concession in

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Speaker 3: it by the district attorney, who said that given the

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Speaker 3: election outcome and the powers and responsibilities of the US presidency,

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Speaker 3: the DA would be open to discussing delaying the case

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Speaker 3: during Trump's term in office. But the prosecutor also signaled

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Speaker 3: further fighting here by saying that the DA would fight

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Speaker 3: any attempt by Trump to outright dismiss the case. And

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Speaker 3: Trump's side said in a letter earlier that they do

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Speaker 3: intend to seek a dismissal of the case, even though,

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Speaker 3: of course, the jury has already delivered its verdict and

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Speaker 3: he's been found guilty on thirty four felony counts. Trump

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Speaker 3: is going to argue that, in light of his election victory,

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Speaker 3: the whole case and verdict should be passed out. So

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Speaker 3: the prosecutor is signaling sure, you can make that act,

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Speaker 3: but we're going to fight it, and in the meantime

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Speaker 3: the case will be delayed. So there's still quite a

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Speaker 3: bit of arguments going ahead here.

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Speaker 2: Trump's lawyers wrote that the case had to be scrapped

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Speaker 2: to facilitate the orderly transition of executive power and in

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Speaker 2: the interests of justice. I mean, if he's not going

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Speaker 2: to be sentenced, it doesn't interfere with the transition of power.

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Speaker 2: And the jury rendered its verdict in the justice.

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Speaker 3: System, well, it has been decided. But this, of course

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Speaker 3: is so unprecedented. There's really never been a case like

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Speaker 3: this before. I mean, it's strange enough or unusual enough

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Speaker 3: to have a former president found guilty of crime. But

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Speaker 3: the fact that he was convicted before the election, but

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Speaker 3: then was not sentenced before the election, it leaves open

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Speaker 3: this question. So the government clearly is saying, it said

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Speaker 3: in this letter that look, the jury has spoken, and

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Speaker 3: we have to respect the findings of this jury. But

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Speaker 3: let's talk about how this proceeds. So we can expect

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Speaker 3: to see some very novel arguments laid out in Trump's

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Speaker 3: filing whenever that does come. Beking dismissal of this verdict

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Speaker 3: but of course they're going to point to the powers

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Speaker 3: of the presidency and point to clashes between states and

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Speaker 3: the federal government and who should prevail. So again, nothing

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Speaker 3: has ever happened like this before, So we'll have to

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Speaker 3: wait and see what Trump's filing says. But the prosecutor

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Speaker 3: is definitely signaling a fight here.

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Speaker 2: Yeah, I mean, it would be so unusual to just

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Speaker 2: set aside a jury verdict because the defendant has become president.

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Speaker 4: What would be the legal basis for that, right?

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Speaker 3: I think some of the legal experts have actually said

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Speaker 3: that a judge really can't do that in the New

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Speaker 3: York law, that except under certain circumstances, and it's unclear

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Speaker 3: if this be one of those. But you know, other

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Speaker 3: experts have said that if things don't go the way

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Speaker 3: Trump wants in this court, they could also try again

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Speaker 3: to have the whole case transferred to federal court, where

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Speaker 3: it could be more quickly dismissed, potentially under these federal arguments.

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Speaker 3: And Trump of course did try that in this case

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Speaker 3: a couple of times earlier in sales, but that was

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Speaker 3: before the election, so he's got new potential arguments here.

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Speaker 3: This has not happened yet, but it is something experts

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Speaker 3: is that he could try to do in terms of

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Speaker 3: moving into federal court.

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Speaker 2: Is the sentencing date still scheduled?

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Speaker 3: Right, So the court is saying that as of now,

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Speaker 3: technically the November twenty sixth sentencing date, it's still on

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Speaker 3: the calendar, but it seems fairly clear that that's not

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Speaker 3: going to actually happen. The letter itself, but by the

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Speaker 3: district's attorney, proposes that Trump be given a deadline to

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Speaker 3: file his motion to dismiss and that the DA be

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Speaker 3: given a chance to respond. Of course, and the response

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Speaker 3: to date proposed that a DA was December ninth, So

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Speaker 3: the judge is probably going to look pretty strongly at

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Speaker 3: what the DA is proposing. This is the government's case here,

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Speaker 3: and so it doesn't seem like there's any chance of

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Speaker 3: that actually happening on November twenty sixth.

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Speaker 2: And we should note, I mean it's been delayed the

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Speaker 2: sentencing at Trump's request, right.

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Speaker 3: Right, So we're at this moment where the judge is

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Speaker 3: going to have to decide whether or not he can

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Speaker 3: sentence a president elect, which would be unprecedented and you know,

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Speaker 3: maybe not a great look for the United States government

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Speaker 3: going into a new administration. But the reason that we

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Speaker 3: are here at this moment is because Trump was able

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Speaker 3: to delay the sentencing a couple of times before the election,

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Speaker 3: and a lot of the legal experts have predicted that

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Speaker 3: when the sensing, if it goes forward, that he would

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Speaker 3: get a lot less than the maximum four years under

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Speaker 3: the law, just for various reasons like he's a first

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Speaker 3: time offender and the crimes are non violence and that

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Speaker 3: sort of thing. So in theory, Trump could have been

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Speaker 3: sentenced months ago and even served his sentence or even

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Speaker 3: got no time dis probations, and it all could been

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Speaker 3: done before the election, but the judge was worried that

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Speaker 3: any kind of sentence could impact the outcome of the election.

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Speaker 3: That was his reason for delaying it the last time.

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Speaker 2: And Trump has really succeeded with his strategy of delay

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Speaker 2: in all his cases. What's happening with the Justice Department's

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Speaker 2: cases against him? Have those been dropped yet?

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Speaker 3: Right? So? Special Counsel Jack Smith, who brought the two

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Speaker 3: federal cases against Trump, it seems like the writing is

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Speaker 3: on the wall that those cases are going to have

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Speaker 3: to go away. The US Justice Department officials said that

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Speaker 3: they had asked and received a court order delaying all

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Speaker 3: deadlines in the election interference case while they consider exactly

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Speaker 3: what to do next. And of course there is a

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Speaker 3: longstanding DOJ policy against prosecuting or indicting sitting presidents, so

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Speaker 3: the expectation is that those cases are going to go away.

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Speaker 3: The classified documents case in federal court in Florida, of course,

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Speaker 3: was dismissed by a Trump appointed judge earlier this year,

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Speaker 3: but the Justice Department has appealed that, and so it's

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Speaker 3: likely that that appeal would be dropped and that other

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Speaker 3: case dismissed as well. So yet, to the extent that

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Speaker 3: Trump thinks on this election victory making his extensive legal

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Speaker 3: troubles go away, that largely is a success.

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Speaker 2: The Georgia election interference case is also on hold. It's

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Speaker 2: kind of amazing that he and his lawyers were able

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Speaker 2: to just freeze two federal cases and two state cases.

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Speaker 4: It's sort of mind boggling.

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Speaker 3: I mean, he has a lot of lawyers, they have

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Speaker 3: some creative strategies. And of course, all along here Trump

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Speaker 3: was campaigning for the presidency, which gave him additional ways

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Speaker 3: to delay the cases from the proceedings. And in Georgia,

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Speaker 3: of course, they were able to. It wasn't even really

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Speaker 3: Trump's false. So to say that that case got delayed

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Speaker 3: so much, I mean the district attorney there, Fannie Willison

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Speaker 3: Fulton County. The reason that case is the latest because

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Speaker 3: she had an affair with another person on one of

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Speaker 3: our investigators on the case, and Trump had moved to

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Speaker 3: have her disqualified, and an appeals court is eventually going

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Speaker 3: to have to decide that before that case can move

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Speaker 3: forward anymore.

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Speaker 2: And so what the district attorney is suggesting here is

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Speaker 2: basically put it on hold and will sentence him after

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Speaker 2: his presidency is over.

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Speaker 3: Is that the implication, Well DA in Manhattan didn't explicitly

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Speaker 3: stable sentence him after the presidency is over, but more

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Speaker 3: just to put the entire case on hold yet. The

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Speaker 3: sentence thing is the next thing to come up here,

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Speaker 3: But there could be additional arguments that could be made

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Speaker 3: once the case restarts theoretically after his term in office,

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Speaker 3: around immunity or things like that. So not specifically saying

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Speaker 3: schedule a sentencing after his term in office is over,

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Speaker 3: but just putting the whole case on hold and revisit

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Speaker 3: it later.

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Speaker 2: The lawyer who represented him in the hush money case.

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Speaker 2: Is he one of the lawyers that Trump is appointing

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Speaker 2: to the Justice Department?

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Speaker 3: Right? I think Todd Blanche has been nominated for Deputy

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Speaker 3: Attorney general position, if I'm remembered correctly.

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Speaker 2: Yeah, that's right, and Blanche was a former federal prosecutor.

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Speaker 2: He's also nominating his other defense lawyer in this case,

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Speaker 2: Emil Bove as principal Associate Attorney General, and the lawyer

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Speaker 2: who represented him in the presidential immunity case at the

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Speaker 2: Supreme Court has been chosen as the Uslicitor General. So

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Speaker 2: Trump's lawyers are getting plump positions in the Justice Department.

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Speaker 2: Thanks so much, Eric, that's Bloomberg Legal reporter Eric Larson.

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Speaker 2: It would be a historic crackdown on one of the

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Speaker 2: world's biggest tech companies. That is, if a judge agrees

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Speaker 2: to the Justice Department's proposal to sell Google's Chrome browser

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Speaker 2: as a remedy for his decision that the tech giant

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Speaker 2: illegally monopolized the search market, Federal anti trust enforcers will

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Speaker 2: ask Judge Ahmitt Meta to order Google to sell off

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Speaker 2: Chrome because, as the world's most popular web browser, it

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Speaker 2: represents a key access point through which many people use

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Speaker 2: its search engine. That's according to Bloomberg sources, it would

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Speaker 2: mark the biggest forced breakup of a US company since

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Speaker 2: AT and T was dismantled in nineteen eighty four. Joining

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Speaker 2: me is Bloomberg Anti trust reporter Leean Nylan Lea tell

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Speaker 2: us what you learned. The Justice Department is going to

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Speaker 2: be asking for as a remedy, although Google might view

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Speaker 2: it as a punishment for Google's violation of the antitrust laws.

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Speaker 5: So the big headline is, the Justice Department is going

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Speaker 5: to propose that Google be forced to sell off Chrome,

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Speaker 5: It's web browser, if some of the other things that

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Speaker 5: it is proposing to sort of increase competition in the

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Speaker 5: market aren't successful. So the other big things that it

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Speaker 5: really wants to do is force Google to license the

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Speaker 5: data this is called click and query data that underlies

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Speaker 5: its search results, as well as syndicate the search results

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Speaker 5: themselves to other companies and AI startups. The syndication is

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Speaker 5: supposed to sort of help other companies other search engines

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Speaker 5: sort of get better a lot more quickly because they'll

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Speaker 5: be able to rely on the same results that Google

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Speaker 5: does in its search engine. And then this underlying data,

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Speaker 5: the click and query data, can sort of help them

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Speaker 5: beef up their own systems to sort of make them

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Speaker 5: as good as the one that Google has itself, because

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Speaker 5: one of the main allegations in the complaint and that

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Speaker 5: the judge found was true in his opinion, is that

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Speaker 5: Google's conduct has led to such a situation that the

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Speaker 5: other search engines don't have the same level of quality

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Speaker 5: because Google just has so much more traffic than them.

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Speaker 5: So this is a way to sort of get them

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Speaker 5: a lot of the same high quality results so that

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Speaker 5: they can improve their own systems to be as good

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Speaker 5: as Google. The other really big interesting thing is they

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Speaker 5: want to make some proposals that would limit a couple

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Speaker 5: of the things that Google is doing on artificial intelligence.

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Speaker 5: So right now, companies can opt out of having their

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Speaker 5: website scraped and that data used in building Googles llm's

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Speaker 5: large language models which underlie its AI products, but they're

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Speaker 5: not allowed to, for example, opt out of the so

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Speaker 5: called aioverviews that appear at the top of a search

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Speaker 5: results page. So sometimes when you Google something, instead of

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Speaker 5: showing you the ten blue links, it just gives you

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Speaker 5: sort of like a summary at the top, and it's

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Speaker 5: been taking that summary using AI and sort of just

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Speaker 5: putting it there at the top, and oftentimes website publishers

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Speaker 5: have complained people don't click through. They just see that

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Speaker 5: AI summary and then you know, they have their answer

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Speaker 5: and they're done. And website publishers say that this is

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Speaker 5: problematic for them because they've been losing a lot of

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Speaker 5: traffic and therefore, you know, the advertising dollars that are

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Speaker 5: associated with that. So they really don't like the AI

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Speaker 5: overhus But Google right now doesn't give anybody a way

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Speaker 5: to opt out of that. So the Justice Apparent wants

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Speaker 5: to make it so that website publishers have a lot

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Speaker 5: more options for how their data is used by Google,

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Speaker 5: in particular in its AI products.

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Speaker 2: So the Justice Department is saying, we want to have

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Speaker 2: the option of having Google cell Chrome if we decide

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Speaker 2: that these other things aren't working. I mean, is the

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Speaker 2: government saying that decision should be up to us.

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Speaker 5: We're not sure. The filing is supposed to come tomorrow,

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Speaker 5: so we will find out exactly how they are proposing

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Speaker 5: that would work. But yes, you seem to sort of

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Speaker 5: be trying to keep this option of like having the

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Speaker 5: big sword over Google's head to make sure that it

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Speaker 5: complies with some of the other things that it wants

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Speaker 5: in this injunction. This is all very dependent on the judge, though,

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Speaker 5: you know, the judge I'm at Meta is going to

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Speaker 5: have a remedy hearing in April to sort of hear

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Speaker 5: from witnesses a little bit about these options, and then

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Speaker 5: he will issue a decision sometimes next year. He said

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Speaker 5: he will have it out by August twenty twenty five

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Speaker 5: with his final decision on how Google should change its behavior.

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Speaker 5: A lot of people think that the judge is really

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Speaker 5: not going to go for the breakup or the vestuture

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Speaker 5: option that the Justice Department has you know, hinted and

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Speaker 5: that we reported that they're going to propose, just because

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Speaker 5: it is a little bit more of a sort of

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Speaker 5: radical option. You know, the government hasn't actually broken up

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Speaker 5: a company since the AT and T case in nineteen

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Speaker 5: eighty four, and so you know, even though it had

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Speaker 5: wanted to break up Microsoft, it ended up, you know,

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Speaker 5: accepting some lesser changes instead of a breakup. So a

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Speaker 5: lot of people really think that Meta is not going

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Speaker 5: to go for this, so that this may be a

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Speaker 5: little bit of like a position that the Justice Department

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Speaker 5: is taking to sort of fear meta a little bit

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Speaker 5: more towards the middle ground, which is the you know,

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Speaker 5: data licensing portion.

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Speaker 2: What's left of Google if you force it to sell

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Speaker 2: off at search engine.

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Speaker 5: Well, they're not proposing that it be forced to sell

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Speaker 5: off the search engine, only Chrome the web browser. Oh,

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Speaker 5: it would still have the search engine, it would still

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Speaker 5: have Android, the mobile operating system. It just would no

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Speaker 5: longer have a browser. And the browser has been a

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Speaker 5: very important sort of They call it a search access point,

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Speaker 5: a way in which people access Google Search because it

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Speaker 5: is you know, tied into the browser. It automatically goes

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Speaker 5: to Google if you type something in and that it

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Speaker 5: has also been a pretty important feature for Google in

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Speaker 5: terms of if you're using Chrome and you are signed

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Speaker 5: into a Google account, it keeps a lot of information

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Speaker 5: about where you have visited and you know what other

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Speaker 5: Google services you use, you know, your YouTube history, all

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Speaker 5: of that information, and that is some of the details

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Speaker 5: in data that Google used to help target ads towards you.

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Speaker 5: So if Google no longer has this browser, this sort

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Speaker 5: of gateway that people use and helps them collect you know,

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Speaker 5: data and information about people, it would be an important

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Speaker 5: blow to the company because you know, they do rely

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Speaker 5: on Chrome quite a bit for some of their other services.

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Speaker 2: Actually, I think I might be confusing the browser and

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Speaker 2: the search engine.

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Speaker 5: As you know, we actually went over this. This is

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Speaker 5: an early question of the trial. What is the difference

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Speaker 5: between a browser and the search engine. So the browser

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Speaker 5: is the thing that you use to access the internet,

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Speaker 5: you know, it is the program where it has up

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Speaker 5: at the top and you can type in, you know,

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Speaker 5: HTTP whatever.

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Speaker 4: You know.

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Speaker 5: The first one was Internet Explorer, but Chrome, which was

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Speaker 5: introduced by Google in two thousand and eight, was very

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Speaker 5: innovative at the time because when it could remember a

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Speaker 5: lot of the website, so you oftentimes you don't have

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Speaker 5: to like type out the entire website like you did

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Speaker 5: in the past, you know, www dot New York Times

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Speaker 5: dot com. If you just start typing it, it says, oh,

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Speaker 5: you want to go to New York Times and then

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Speaker 5: be there. The other thing is you can actually just

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Speaker 5: type a query in the web browser bar and it

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Speaker 5: will automatically take you to Google as though you were

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Speaker 5: using that as a search engine. And that was like

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Speaker 5: a pretty you know, unique invention at the time, back

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Speaker 5: in two thousand and eight. And that's a reason why

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Speaker 5: a lot of people do use Chrome, you know, because

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Speaker 5: it is integrated with Google. It's integrated with a lot

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Speaker 5: of Google cell their products so that it remembers. For example,

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Speaker 5: you know, if you have searched for a recent location

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Speaker 5: on Google Maps, it remembers that, and it can be like, oh,

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Speaker 5: are you trying to go to this Italian restaurant you

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Speaker 5: went to last week or two weeks ago. So Chrome

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Speaker 5: has integrated a lot of Google services, is pretty useful. Now.

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Speaker 5: Google likes to say, you know, Chrome is our product.

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Speaker 5: The software underlying Chrome is actually an open source product.

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Speaker 5: Anyone can use it, and a lot of the other browsers,

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Speaker 5: including Impact of Microsoft's Edge, are built on that open

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Speaker 5: source that Google made from Chrome. So Edge is based

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Speaker 5: on this open source Chromium. The one that Amazon has

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Speaker 5: built for the Fire device is called Silk, is also

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Speaker 5: built on that. So you know, they say Chrome doesn't

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Speaker 5: have very much value without you know, a lot of

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Speaker 5: the other Google data underlying it. We'll see, we'll see.

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Speaker 5: You know, there are some people who might be very

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Speaker 5: willing to pay for Chrome. Our analyst here at BI

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Speaker 5: suggested that it might be worth as much as twenty

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Speaker 5: million dollars because of the number of people who use

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Speaker 5: that browser every day something like three billion daily active users.

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Speaker 5: And so you know, if another company could take it

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Speaker 5: and integrate it with their own services, it could be

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Speaker 5: pretty powerful. For example, if open ai wanted to have

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Speaker 5: a browser and sort of integrate it with its new

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Speaker 5: sort of burgeoning AI and search though its that might

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Speaker 5: be in a really interesting combination.

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Speaker 2: But as you point out in your story, some of

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Speaker 2: the companies that might want to buy it, like Amazon,

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Speaker 2: are facing their own antitrust scrutiny. I mean, will it

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Speaker 2: go from one monopolist to another, or should I say

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Speaker 2: one mega company to another.

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Speaker 5: Yeah, that's definitely true. I mean the very first company

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Speaker 5: that somebody mentioned might want to buy it with Microsoft,

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Speaker 5: and I was like, well, there's no way they're going

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Speaker 5: to let Microsoft buy this browser. Like one, Microsoft has

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Speaker 5: the second most use browser, and you got Microsoft in trouble,

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Speaker 5: like back in the day, right was the Internet Explorer browser.

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Speaker 5: So I really don't think we're going to go back

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Speaker 5: down the road of like giving Microsoft control of the browser.

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Speaker 4: What do you think.

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Speaker 2: Google will be willing to or will be suggesting as

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Speaker 2: a remedy?

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Speaker 4: Do you have any idea just will be judge meta?

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Speaker 5: Yeah, Google has said, you know, if the judge has

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Speaker 5: a problem with these contracts, what they could do is

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Speaker 5: just it's the contracts, but eliminate their exclusive nature. So

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Speaker 5: he said it was a problem that Google was paying

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Speaker 5: you know, Apple, for example, twenty billion dollars a year

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Speaker 5: to be the exclusive search default. Okay, maybe they're no

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Speaker 5: longer going to be paid to be the exclusive Maybe

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Speaker 5: they'll now just pay for whatever searches are sent by

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Speaker 5: Apple to Google, and then everybody else can pay because

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Speaker 5: other companies do pay to sort of appear on you know,

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Speaker 5: when you open up a browser window in Safari, you

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Speaker 5: sometimes see you know, you can go to Microsoft thing,

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Speaker 5: you can go to Yahoo, you can go to Wikipedia.

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Speaker 5: All those things those companies actually pay for that placement.

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Speaker 5: So maybe everybody just pays for whatever traffic is being

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Speaker 5: sent to them through the browser or you know, Apple users,

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Speaker 5: instead of having it be an exclusive devolve. The government,

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Speaker 5: of course, isn't thrilled with just that change, because you know,

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Speaker 5: their argument is Google has benefited from having these contracts

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Speaker 5: for so long. You can't just now say, you know,

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Speaker 5: go orhm to no more. You have to sort of

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Speaker 5: fix the market that has been sort of distorted by

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Speaker 5: Google's conduct having these illegal contracts for so long. So

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Speaker 5: Google is really going to be pushing to sort of

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Speaker 5: limit this as much as possible, maybe make it just

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Speaker 5: about the contracts, whereas the government is going to say, yeah,

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Speaker 5: we need to change the contracts, but we need all

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Speaker 5: these other things as well.

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Speaker 2: And most people you spoke to thought that Judge Meta

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Speaker 2: wouldn't go as far as you said at and T

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Speaker 2: was the last time there was a government ordered breakup

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Speaker 2: of a company, that Judge Meta wouldn't go so far

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Speaker 2: as to order that.

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Speaker 5: Yeah, a lot of people have said, you know, even

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Speaker 5: since his decision in August, that they really think that

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Speaker 5: he's not going to go for a breakup. I mean,

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00:20:44,560 --> 00:20:47,439
Speaker 5: he has relied very heavily in his opinion and in

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Speaker 5: his thinking about this on the Microsoft case. And in

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Speaker 5: the Microsoft case, you know, the judge originally ordered a

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00:20:52,440 --> 00:20:55,720
Speaker 5: breakup and then the DC Circuit sort of knocked that down.

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Speaker 5: So really taking that into account, they think that judgement

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Speaker 5: is probably going to be pretty reluctant to go down

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Speaker 5: the same path that the original Microsoft just judge did

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Speaker 5: because he really is invested in making sure that his

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Speaker 5: decision stands up on appeal. And is compliant with the law,

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Speaker 5: and given sort of the tenor of the courts recently,

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Speaker 5: they don't think that the breakup option is really what

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Speaker 5: he's going to go for. The other interesting thing I

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Speaker 5: heard is if the government isn't successful in pushing him

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Speaker 5: to require a divestiture here, they still have their other case.

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Speaker 5: You know, we have closing arguments in that one next week.

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Speaker 5: This is the case about involving advertising technology, and Chrome

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Speaker 5: is actually pretty important in that one too, because as

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Speaker 5: I mentioned, you know, all of the data that Google

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Speaker 5: gets from people using the Chrome browser is a thing

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Speaker 5: that uses to help target advertising. So if Meta is

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Speaker 5: reluctant to order a sale of Chrome, they might have

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Speaker 5: a second chance to argue for that before the other judge,

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Speaker 5: Judge Brinkamatt in Virginia.

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Speaker 2: Google says it's going to Judge Meta's decision, and you know,

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Speaker 2: I assume that if it goes to the DC Circuit,

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Speaker 2: then it'll go to the Supreme Court no matter what,

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Speaker 2: which may or may not take the case. So I

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Speaker 2: mean we're talking about years ahead.

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Speaker 5: Yeah, I mean, so Judge Metta has said he intends

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Speaker 5: to have his final order issue by August of twenty

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Speaker 5: twenty five, and then it's going to go to the

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Speaker 5: DC Circuit. That process is probably going to take nine

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Speaker 5: months to a year. The Justice Department has been trying

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Speaker 5: to push this argument that, like, these things need to

435
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Speaker 5: be expedited. This has been going on for a long time.

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Speaker 5: It needs to be resolved because we need to sort

437
00:22:36,320 --> 00:22:40,280
Speaker 5: of yet underway at starting to bring competition back to

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Speaker 5: these markets. So they may try and push the DC

439
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Speaker 5: Circuit to do it on a more of an expedited

440
00:22:45,000 --> 00:22:47,960
Speaker 5: basis than they would otherwise. But it's true like by

441
00:22:48,000 --> 00:22:50,119
Speaker 5: the time we get through these appeals, it's probably going

442
00:22:50,160 --> 00:22:53,000
Speaker 5: to be a year to eighteen months. So at the earliest,

443
00:22:53,200 --> 00:22:55,680
Speaker 5: you know, any of these changes that they are proposing

444
00:22:55,720 --> 00:22:58,040
Speaker 5: are probably not going to be in place until twenty

445
00:22:58,040 --> 00:22:59,960
Speaker 5: twenty six, maybe early twenty twenty seven.

446
00:23:00,200 --> 00:23:02,879
Speaker 2: Yeah, good luck with trying to convince the DC Circuit

447
00:23:02,920 --> 00:23:07,000
Speaker 2: that this all of a sudden it requires lightning speed,

448
00:23:07,800 --> 00:23:11,520
Speaker 2: and Judgemadow will hold that hearing in April of twenty

449
00:23:11,560 --> 00:23:14,359
Speaker 2: twenty five, So quite a long time to go even

450
00:23:14,359 --> 00:23:17,680
Speaker 2: to the hearing, let alone the appeals. Thanks so much, Leah.

451
00:23:17,880 --> 00:23:21,960
Speaker 2: That's Bloomberg Anti Trust reporter Lean Nylan coming up. Just

452
00:23:22,040 --> 00:23:25,560
Speaker 2: Who is Bitcoin Jesus and why is he fighting extradition?

453
00:23:25,840 --> 00:23:30,080
Speaker 2: This is Bloomberg To his followers, Roger vere is known

454
00:23:30,160 --> 00:23:35,359
Speaker 2: as Bitcoin Jesus, a charismatic advocate of the cryptocurrency that's

455
00:23:35,440 --> 00:23:39,480
Speaker 2: once again captivating investors worth record breaking gains.

456
00:23:39,680 --> 00:23:40,240
Speaker 4: But to the.

457
00:23:40,160 --> 00:23:43,560
Speaker 2: Irs, Verr is a new target for the digital age,

458
00:23:43,960 --> 00:23:47,800
Speaker 2: a crypto holder suspected of failing to pay taxes after

459
00:23:47,840 --> 00:23:52,080
Speaker 2: selling tokens, and prosecutors have charged Verer with evading more

460
00:23:52,119 --> 00:23:56,080
Speaker 2: than forty eight million dollars in taxes for selling two

461
00:23:56,200 --> 00:23:59,560
Speaker 2: hundred and forty million dollars in tokens. The case marks

462
00:23:59,560 --> 00:24:03,840
Speaker 2: a break from more traditional cases where prosecutors tax tax

463
00:24:03,960 --> 00:24:09,280
Speaker 2: charges onto crypto cases for crimes like money laundering, ransomware attacks,

464
00:24:09,320 --> 00:24:13,399
Speaker 2: and investor scams. The case against Veer deals solely with

465
00:24:13,560 --> 00:24:17,640
Speaker 2: tax fraud and digital asset sales. Joining me is Bloomberg

466
00:24:17,720 --> 00:24:20,120
Speaker 2: legal reporter David Voriakis, who's.

467
00:24:19,840 --> 00:24:24,600
Speaker 4: Written about him? So, David, who is Bitcoin Jesus and

468
00:24:24,920 --> 00:24:26,040
Speaker 4: how did he get that name?

469
00:24:26,520 --> 00:24:31,720
Speaker 1: Roger Meer was an early investor in bitcoin. He grew

470
00:24:31,840 --> 00:24:36,920
Speaker 1: up in Silicon Valley and he was a libertarian. When

471
00:24:37,040 --> 00:24:42,480
Speaker 1: he was twenty two, he was convicted of selling explosives

472
00:24:42,520 --> 00:24:46,240
Speaker 1: without a license, and he did ten months in prison.

473
00:24:47,080 --> 00:24:52,800
Speaker 1: That reinforced his negative attitude towards the US government, and

474
00:24:53,240 --> 00:24:58,280
Speaker 1: he moved to Japan. Then he later renounced his US

475
00:24:58,359 --> 00:25:03,080
Speaker 1: citizenship and he became a citizen of Saint Kitts and Nevis.

476
00:25:03,320 --> 00:25:10,560
Speaker 1: Along the way, he became a very powerful advocate for bitcoin,

477
00:25:11,040 --> 00:25:14,080
Speaker 1: selling it everywhere that he could, selling the notion of

478
00:25:14,119 --> 00:25:19,800
Speaker 1: it promise and the potential of cryptocurrencies to transfer wealth

479
00:25:20,359 --> 00:25:26,840
Speaker 1: without mediation by regulators or governments or other institutions. And

480
00:25:27,280 --> 00:25:32,400
Speaker 1: he's a charismatic speaker who got the nickname Bitcoin Jesus.

481
00:25:32,760 --> 00:25:38,400
Speaker 1: He invested in several crypto companies in their startup days

482
00:25:38,840 --> 00:25:42,640
Speaker 1: and made a lot of money. Roger Vere has gotten

483
00:25:43,160 --> 00:25:45,880
Speaker 1: into trouble with the Internal Revenue Service.

484
00:25:46,080 --> 00:25:48,439
Speaker 2: I mean, how did he get so popular and so

485
00:25:48,600 --> 00:25:49,200
Speaker 2: well known.

486
00:25:50,320 --> 00:25:53,680
Speaker 1: Well, he tweeted a lot. He's got seven hundred thousand

487
00:25:53,920 --> 00:25:59,199
Speaker 1: followers on it, and he appeared at conferences. He was

488
00:25:59,520 --> 00:26:04,560
Speaker 1: just no within the cryptoworld. He'd appear at meetups and

489
00:26:04,800 --> 00:26:09,359
Speaker 1: other gatherings, and he was a very influential player in

490
00:26:09,400 --> 00:26:14,160
Speaker 1: the early ecosystem of bitcoin. You know, he's well spoken,

491
00:26:14,280 --> 00:26:18,359
Speaker 1: good looking, charismatic. He has a real presence about him,

492
00:26:18,800 --> 00:26:22,440
Speaker 1: and so his message resonated with people, and people reacted

493
00:26:22,480 --> 00:26:25,320
Speaker 1: to his message that you should all go out and

494
00:26:25,359 --> 00:26:29,760
Speaker 1: buy bitcoin and then other cryptocurrencies that he was also supporting.

495
00:26:30,440 --> 00:26:33,920
Speaker 2: He was a co founder of blockchain dot com. Is

496
00:26:33,960 --> 00:26:35,399
Speaker 2: he still an owner there?

497
00:26:35,840 --> 00:26:39,520
Speaker 1: He is not, But there were other companies that he

498
00:26:39,600 --> 00:26:44,040
Speaker 1: was an early investor in, like payment processor BitPay and

499
00:26:44,119 --> 00:26:48,360
Speaker 1: the digital asset firm Ripple. There was a software upgrade

500
00:26:48,840 --> 00:26:54,359
Speaker 1: that the Bitcoin network underwent that he opposed in twenty seventeen,

501
00:26:54,480 --> 00:26:58,600
Speaker 1: and he switched to a split off coin called bitcoin Cash,

502
00:26:59,000 --> 00:27:02,080
Speaker 1: and that was very controversial at the time. That that

503
00:27:02,280 --> 00:27:05,760
Speaker 1: was the stand that he took, and so he's continued

504
00:27:05,840 --> 00:27:09,360
Speaker 1: to be popular in crypto circles.

505
00:27:09,840 --> 00:27:14,680
Speaker 2: He renounced his US citizenship in twenty fourteen. What steps

506
00:27:14,680 --> 00:27:17,120
Speaker 2: are required legally when you do that?

507
00:27:17,960 --> 00:27:20,800
Speaker 1: If they are worth more than two million dollars, they're

508
00:27:20,840 --> 00:27:24,639
Speaker 1: supposed to report their worldwide assets to the IRS and

509
00:27:24,760 --> 00:27:29,719
Speaker 1: pay an exit tax based on their assets sales. So

510
00:27:29,800 --> 00:27:33,960
Speaker 1: they have to make a written through report to the

511
00:27:34,040 --> 00:27:37,800
Speaker 1: IRS about what they own anywhere in the world, and

512
00:27:37,840 --> 00:27:42,320
Speaker 1: then they have to file a return that reflects how

513
00:27:42,400 --> 00:27:46,760
Speaker 1: much tax they owe on whatever income or sales they've had.

514
00:27:47,160 --> 00:27:50,640
Speaker 2: So did he report to the IRS when he renounced

515
00:27:50,640 --> 00:27:51,520
Speaker 2: his citizenship?

516
00:27:51,640 --> 00:27:52,600
Speaker 4: Tell us what happened?

517
00:27:52,800 --> 00:27:56,959
Speaker 1: Well, according to the indictment in federal court in Los Angeles,

518
00:27:57,480 --> 00:28:01,800
Speaker 1: he did not make an accurate report to the IRS

519
00:28:01,840 --> 00:28:08,159
Speaker 1: about what assets he owned, specifically the crypto holdings that

520
00:28:08,280 --> 00:28:13,040
Speaker 1: he had personally and through two companies that he founded

521
00:28:13,080 --> 00:28:16,320
Speaker 1: and that were based in California. They were called Memory

522
00:28:16,400 --> 00:28:21,680
Speaker 1: Dealers and Agile Star, and the IRS, in its indictment,

523
00:28:21,880 --> 00:28:25,280
Speaker 1: which accuses him of tax of asion, wire fraud, and

524
00:28:25,520 --> 00:28:29,199
Speaker 1: filing a false tax return, says that he did not

525
00:28:29,920 --> 00:28:35,160
Speaker 1: fully report his crypto holdings for one and then later

526
00:28:35,240 --> 00:28:41,360
Speaker 1: on in twenty seventeen, they alleged that he sold about

527
00:28:41,520 --> 00:28:46,000
Speaker 1: two hundred and forty million dollars in crypto and that

528
00:28:46,200 --> 00:28:50,000
Speaker 1: he failed to pay forty eight million dollars in taxes

529
00:28:50,040 --> 00:28:50,920
Speaker 1: on those sales.

530
00:28:51,040 --> 00:28:53,880
Speaker 2: And is this case unusual in any respect?

531
00:28:54,320 --> 00:28:54,920
Speaker 4: Is it different?

532
00:28:54,960 --> 00:28:58,560
Speaker 1: It is unusual because for several years the Internal Revenue

533
00:28:58,600 --> 00:29:02,760
Speaker 1: Service has been talking about filing a tax of asion

534
00:29:02,920 --> 00:29:07,480
Speaker 1: case based solely on crypto, and this has been a

535
00:29:07,840 --> 00:29:11,640
Speaker 1: subject of considerable debate within the IRS for a long time.

536
00:29:12,360 --> 00:29:16,560
Speaker 1: On how to notify crypto holders that they have an

537
00:29:16,560 --> 00:29:20,800
Speaker 1: obligation to pay taxes when they sell crypto and what

538
00:29:20,880 --> 00:29:24,680
Speaker 1: the proper rate should be. What crypto holders are supposed

539
00:29:24,680 --> 00:29:28,040
Speaker 1: to disclose. It's now part of an IRS tax return.

540
00:29:28,240 --> 00:29:31,719
Speaker 1: Do you have digital currency holdings or not? Yes or no?

541
00:29:32,400 --> 00:29:35,360
Speaker 1: And then they're supposed to pay capital gains tax on

542
00:29:35,480 --> 00:29:39,400
Speaker 1: their sale. There was another person from Texas who was

543
00:29:39,720 --> 00:29:44,080
Speaker 1: charged earlier this year in the first crypto only tax

544
00:29:44,120 --> 00:29:47,600
Speaker 1: of asion case, and then Roger vere was the second

545
00:29:47,640 --> 00:29:52,440
Speaker 1: who was charged. The other one seated guilty in September,

546
00:29:52,960 --> 00:29:57,920
Speaker 1: and Verer is now facing extradition from Spain where he

547
00:29:58,080 --> 00:29:59,600
Speaker 1: was arrested in April.

548
00:30:00,000 --> 00:30:02,040
Speaker 2: And what's his defense to the charges.

549
00:30:02,600 --> 00:30:06,000
Speaker 1: Well, his defense is that he was relying on the

550
00:30:06,040 --> 00:30:10,200
Speaker 1: advice of his lawyers and his other tax professionals, and

551
00:30:10,240 --> 00:30:13,920
Speaker 1: that at the time in question, which would be twenty

552
00:30:13,960 --> 00:30:18,360
Speaker 1: fourteen to twenty seventeen, the IRS policy was very much

553
00:30:18,480 --> 00:30:23,200
Speaker 1: unsettled on what crypto holders owed and how they were

554
00:30:23,200 --> 00:30:28,760
Speaker 1: supposed to proceed. He says that he has exculpatory emails

555
00:30:28,800 --> 00:30:33,280
Speaker 1: and other evidence that show that he had no intention

556
00:30:33,560 --> 00:30:37,480
Speaker 1: to evade taxes under the law, you have to know

557
00:30:37,920 --> 00:30:41,920
Speaker 1: that you have an obligation and willingly violate that obligation

558
00:30:42,160 --> 00:30:44,960
Speaker 1: to be guilty of tax evasions. He says that he

559
00:30:45,040 --> 00:30:47,520
Speaker 1: had no intent to do that, and that he has

560
00:30:47,600 --> 00:30:52,000
Speaker 1: evidence that the Justice Department is ignoring tell us.

561
00:30:51,880 --> 00:30:55,360
Speaker 2: About Spain and extradition. Is he still in jail in Spain.

562
00:30:55,640 --> 00:30:59,600
Speaker 1: He was arrested while attending a crypto conference in Barcelona

563
00:30:59,760 --> 00:31:04,280
Speaker 1: in April. He's spent a month in jail there and

564
00:31:04,600 --> 00:31:07,760
Speaker 1: since then he's lived on the island of Majorca, where

565
00:31:07,800 --> 00:31:11,560
Speaker 1: he's had a steady stream of visitors, and he remains

566
00:31:11,680 --> 00:31:14,160
Speaker 1: an outspoken critic of the US government.

567
00:31:14,320 --> 00:31:15,680
Speaker 4: So he's fighting extradition.

568
00:31:16,000 --> 00:31:19,880
Speaker 1: I take it there was an extradition hearing. The judge

569
00:31:19,920 --> 00:31:23,600
Speaker 1: has not issued a decision yet. He's fighting extradition. The

570
00:31:23,720 --> 00:31:29,160
Speaker 1: US government has successfully extradited other white collar criminals from Spain,

571
00:31:29,640 --> 00:31:33,000
Speaker 1: and so there is a history of Spain cooperating with

572
00:31:33,240 --> 00:31:37,040
Speaker 1: US requests for extradition. That may not vode well for

573
00:31:37,160 --> 00:31:40,840
Speaker 1: his case, but the judge is still considering how to

574
00:31:40,880 --> 00:31:44,680
Speaker 1: act here. One of the cases involved Douglas Edelman, who

575
00:31:44,840 --> 00:31:48,560
Speaker 1: was a former defense contractor who's charged with evading taxes

576
00:31:48,600 --> 00:31:51,680
Speaker 1: on more than three hundred and fifty million dollars in income.

577
00:31:52,120 --> 00:31:55,560
Speaker 1: He was extradited earlier this year and now faces trial

578
00:31:55,600 --> 00:31:56,520
Speaker 1: in the US.

579
00:31:56,760 --> 00:31:59,920
Speaker 2: There's no timetable for the Spanish judge to make that decision,

580
00:32:00,080 --> 00:32:02,720
Speaker 2: but I know you will let us know as soon

581
00:32:02,760 --> 00:32:05,880
Speaker 2: as he does. Thanks so much, David. That's Bloomberg Legal

582
00:32:05,920 --> 00:32:08,920
Speaker 2: reporter David Voriakis, and that's it for this edition of

583
00:32:08,920 --> 00:32:11,600
Speaker 2: The Bloomberg Law Show. Remember you can always get the

584
00:32:11,640 --> 00:32:14,880
Speaker 2: latest legal news on our Bloomberg Law Podcast. You can

585
00:32:14,920 --> 00:32:19,120
Speaker 2: find them on Apple Podcasts, Spotify, and at www dot

586
00:32:19,160 --> 00:32:23,360
Speaker 2: bloomberg dot com slash podcast slash Law, and remember to

587
00:32:23,360 --> 00:32:26,440
Speaker 2: tune into The Bloomberg Law Show every weeknight at ten

588
00:32:26,480 --> 00:32:30,240
Speaker 2: pm Wall Street Time. I'm June Grosso and you're listening

589
00:32:30,360 --> 00:32:31,000
Speaker 2: to Bloomberg