WEBVTT - Crypto Fraud Trial of Sam Bankman-Fried 0:00:03.200 --> 0:00:08.280 This is Bloomberg Law with June Brusso from Bloomberg Radio. 0:00:09.880 --> 0:00:12.840 Bankman Freed and his co conspirators sold billions of dollars 0:00:12.920 --> 0:00:17.239 from FTX customers. He used that money for his personal benefit, 0:00:17.680 --> 0:00:20.759 including to make personal investments and to cover expenses and 0:00:20.880 --> 0:00:23.639 debts of his hedge fund Alometer research. 0:00:24.040 --> 0:00:27.440 And now a jury will decide whether sam Bankman Freed 0:00:27.560 --> 0:00:31.320 is guilty of orchestrating a scheme to build investors and 0:00:31.600 --> 0:00:35.240 FDx customers out of billions of dollars. In the ten 0:00:35.320 --> 0:00:39.400 months since Manhattan US Attorney Damian Williams announced the charges, 0:00:39.800 --> 0:00:46.360 prosecutors have collected millions of pages of evidence, including financial records, spreadsheets, memos, 0:00:46.479 --> 0:00:51.640 Google documents, and private communications. They've also flipped three of 0:00:51.840 --> 0:00:56.000 SBF's top lieutenants, who will now be testifying against him. 0:00:56.280 --> 0:00:59.760 My guest is former federal prosecutor Brian Klein, a partner 0:00:59.800 --> 0:01:03.080 at make Or Law. Tell us about the case against 0:01:03.080 --> 0:01:04.119 Sambank and Freed. 0:01:04.959 --> 0:01:07.759 Sure, well, there's a number of charges there, but overall 0:01:08.000 --> 0:01:13.039 the focus is that the defrauded people who place their 0:01:13.080 --> 0:01:16.000 money and trust into FTX. So there's a variety of 0:01:16.040 --> 0:01:18.560 different charges and how they get there. But that's the 0:01:18.600 --> 0:01:21.240 center of the allegation. So that's what the trial is 0:01:21.280 --> 0:01:25.039 going to be focused on, is what happened at FTX, 0:01:25.160 --> 0:01:28.280 how that related to Alameda, which was this as alleged 0:01:28.280 --> 0:01:32.279 to venture Arm essentially an affiliate of FTX, And then 0:01:32.400 --> 0:01:33.280 where the money went? 0:01:33.720 --> 0:01:37.440 Is it a mix of substantive and conspiracy charges and 0:01:37.560 --> 0:01:38.920 you know, tell us what the difference is. 0:01:39.160 --> 0:01:42.720 There's a number of charges here, including conspiracy charges like 0:01:42.760 --> 0:01:46.000 conspiracies commit wire fraud as well as the underlying wirefraud 0:01:46.040 --> 0:01:50.360 charge itself. And conspiracy charges can pose some difficulties for 0:01:50.440 --> 0:01:55.800 prosecutors because often jurors innately can understand a straightforward charge 0:01:55.840 --> 0:01:59.400 like you committed wire fraud, that's the allegation, Whereas when 0:01:59.440 --> 0:02:04.720 you have a conspiracy oftentimes the actual jury instruction can 0:02:04.760 --> 0:02:08.680 be difficult to follow, and that juror can get sometimes confused. 0:02:09.000 --> 0:02:11.560 In this case, though you have a number of his 0:02:11.720 --> 0:02:15.880 alleged co conspirators who everyone expects to testify, former senior 0:02:15.880 --> 0:02:19.880 officials at FTX. You know, the prosecutors, I imagine, think 0:02:19.880 --> 0:02:22.200 they're going to paint a very vivid picture of what 0:02:22.320 --> 0:02:27.240 happened here through this testimony of actual witnesses who were 0:02:27.240 --> 0:02:29.840 there when this was all going down, And so I 0:02:29.840 --> 0:02:31.799 think that's going to put a lot of meat on 0:02:31.840 --> 0:02:34.880 the bone here that sometimes, isn't there A lot of 0:02:34.960 --> 0:02:38.520 times there is a case where the alleged co conspirators 0:02:38.560 --> 0:02:41.040 aren't available to testify for one reason or another, or 0:02:41.080 --> 0:02:45.640 actually are co defendants and don't testify. But in this case, 0:02:45.680 --> 0:02:48.839 Sam is facing these charges alone. He'll be the one 0:02:48.880 --> 0:02:51.560 person there sitting at the table with his lawyers, and 0:02:51.680 --> 0:02:54.800 his former colleagues and former underlings will be getting on 0:02:54.840 --> 0:02:57.200 the stand as we understand it, and testifying against him 0:02:57.280 --> 0:02:58.600 and pointing the finger at him. 0:02:59.160 --> 0:03:04.360 Three FGX and Aalomeda executives, his top lieutenants, including supposedly 0:03:04.400 --> 0:03:07.840 the star witness is likely to be Carolyn Ellison, who 0:03:07.919 --> 0:03:10.960 ran alimed and was in and on again off again 0:03:11.040 --> 0:03:16.200 relationship with Sam Bankman freed. So how does the defense 0:03:16.560 --> 0:03:19.040 go after them when there are three of them saying 0:03:19.080 --> 0:03:19.720 the same thing. 0:03:20.400 --> 0:03:22.120 Well, we don't know that they're all going to be 0:03:22.160 --> 0:03:24.840 saying exact same thing. So that's one area that the 0:03:24.880 --> 0:03:29.600 defense can try to probe on cross examination. We can 0:03:29.639 --> 0:03:31.840 expect them also to attack the credibility of each of 0:03:31.880 --> 0:03:34.840 the three and the fact that they pleaded guilty and 0:03:34.960 --> 0:03:38.840 are probably hoping for some benefit for their testimony. And 0:03:38.880 --> 0:03:41.760 particularly with miss Ellison, I think, you know, just if 0:03:41.800 --> 0:03:45.760 we follow what Sam said about her since he's been arrested, 0:03:45.760 --> 0:03:48.400 and what we learned through the New York Times, you know, 0:03:48.480 --> 0:03:51.240 we can expect the defense to make some issue about 0:03:51.280 --> 0:03:54.560 their relationship and you know, maybe try a sort of 0:03:54.720 --> 0:03:58.280 guilted lover defense, which is, you know, she is actually 0:03:58.320 --> 0:04:00.680 responsible for things kept him in the dark and that 0:04:00.880 --> 0:04:03.520 he is upset in him, or how they break up tended. 0:04:03.800 --> 0:04:06.440 That seems to be a defense they're angling for, but 0:04:06.560 --> 0:04:08.400 we won't know until she gets on the stand. 0:04:09.280 --> 0:04:14.040 Besides those witnesses, prosecutors have apparently amassed millions of pages 0:04:14.080 --> 0:04:18.640 of evidence. The evidence includes financial records, spreadsheets, Google documents, 0:04:18.680 --> 0:04:25.200 and private communications and notes that Ellison took after conversations 0:04:25.240 --> 0:04:30.320 with him, so they'll use that to buttress the testimony 0:04:30.520 --> 0:04:31.599 of their witnesses. 0:04:32.040 --> 0:04:35.359 Absolutely, if you're a prosecutor, you want to try to 0:04:35.400 --> 0:04:39.520 find the quote independent pieces of evidence that support what 0:04:39.640 --> 0:04:42.080 the person's saying. So those could be emails that were 0:04:42.120 --> 0:04:45.920 sent contemporaneously, text methoges that were sent contemporaneously, or they 0:04:45.920 --> 0:04:48.920 could be financial records that show what happens. So you're 0:04:48.960 --> 0:04:52.599 trying to buttress that person's testimony with other pieces of 0:04:52.640 --> 0:04:55.320 evidence that really can't be disputed or will be very 0:04:55.320 --> 0:04:58.159 difficult to dispute. So we can expect that to be 0:04:58.279 --> 0:05:00.760 their plan, and that they'll see that way with her, 0:05:00.839 --> 0:05:03.279 but also with the other witnesses too. You know, they're 0:05:03.279 --> 0:05:04.640 going to want to not just have people get up 0:05:04.640 --> 0:05:06.680 there and say things and point the finger at Sam. 0:05:06.880 --> 0:05:08.200 They're going to want people to get up there and 0:05:08.240 --> 0:05:10.919 say things and show them documents that help paint the 0:05:11.000 --> 0:05:12.960 portrait of what happened, or at least what they claim 0:05:13.000 --> 0:05:16.400 happened there. And then Sam's lawyers probably have their own 0:05:16.400 --> 0:05:19.359 documents they're going to show to the witnesses, you know. 0:05:19.440 --> 0:05:23.279 I mean one thing the defense does is, you know, 0:05:23.320 --> 0:05:26.039 they try to the legal word is impeach, you know, 0:05:26.160 --> 0:05:29.320 undercut the testimony. And they will probably be some documents 0:05:29.400 --> 0:05:32.440 out there that maybe miss Elison hasn't seen or the 0:05:32.480 --> 0:05:34.479 others haven't seen, or even aware of that they'll show 0:05:34.560 --> 0:05:36.919 to her and try to catch them off guard. You know, 0:05:36.960 --> 0:05:39.760 these are savvy prosecutors though, and they're expecting that and 0:05:39.800 --> 0:05:43.920 so prosecutors often build into their examination of the witness 0:05:44.000 --> 0:05:47.680 undirect They'll try to front some of those issues and 0:05:47.800 --> 0:05:50.600 have the witness make statements about some of the things 0:05:50.600 --> 0:05:54.280 that may be vulnerabilities to undercut that attack on the defense. 0:05:54.400 --> 0:05:55.920 They try to get in front of the issue as 0:05:55.960 --> 0:05:59.040 much as they can without undermining the credibility of their 0:05:59.080 --> 0:06:00.119 own witness. 0:06:00.160 --> 0:06:04.239 Before he was arrested, Sam bangmanfre You'd made all kinds 0:06:04.279 --> 0:06:07.880 of statements that seem like admissions of some of the 0:06:07.920 --> 0:06:11.320 facts here. How does the defense deal with that? 0:06:11.320 --> 0:06:14.159 That's a real struggle for any defense lawyer if your 0:06:14.279 --> 0:06:18.760 client is making statements before charged that really to the 0:06:18.800 --> 0:06:22.040 impending charges, or in this case, he's made statements since 0:06:22.080 --> 0:06:25.280 being charged to various people. I suspect that was not, 0:06:25.839 --> 0:06:28.400 you know, his lawyer's advice to keep talking to Tuckman, 0:06:28.560 --> 0:06:30.760 and probably went against his lawyer's device. And there were 0:06:30.760 --> 0:06:33.440 reports that a number of lawyers for lawyers has now 0:06:33.839 --> 0:06:36.000 had given him that advice and sort of withdrawn from 0:06:36.040 --> 0:06:39.280 representing him. Even so, that makes sure the defense order's 0:06:39.320 --> 0:06:43.680 job just that much more difficult, because now you've got 0:06:43.720 --> 0:06:47.200 statements that are sort of immediately after the collapse of 0:06:47.400 --> 0:06:51.480 FTX you know, he went on various podcasts and made 0:06:51.520 --> 0:06:55.039 statements to reporters and etc. And then you have statements 0:06:55.080 --> 0:06:58.360 after even he's been arrested, or he's making different claims 0:06:58.600 --> 0:07:01.640 and putting forth his own narrative of what happened here. 0:07:02.000 --> 0:07:05.599 And so he's really giving the prosecutors a big advantage 0:07:05.600 --> 0:07:08.080 here in terms of how they prepare their case because 0:07:08.120 --> 0:07:10.600 now they got a whole wealth of statements. They also 0:07:11.320 --> 0:07:13.640 get a sense of where he thinks he might be 0:07:13.760 --> 0:07:15.840 raising defenses, so they can start to plan for that. 0:07:15.920 --> 0:07:18.800 More So, I don't think his lawyers would have ever 0:07:18.840 --> 0:07:21.800 recommended he talked to the press or make these statements 0:07:22.000 --> 0:07:24.480 that really only hurts their ability to try to get 0:07:24.560 --> 0:07:25.160 him acquitted. 0:07:25.800 --> 0:07:30.080 So do prosecutors have to prove his intent? And will 0:07:30.080 --> 0:07:31.000 that be hard? 0:07:31.360 --> 0:07:33.680 Absolutely, they have to approve his intent. I mean, this 0:07:33.720 --> 0:07:36.440 is not a drug case where it's like, oh, you 0:07:36.520 --> 0:07:38.720 were in possession of a suit case full of cocaine, 0:07:38.720 --> 0:07:41.240 which you just can't have a suitcase full of cocaine, right, 0:07:41.560 --> 0:07:44.200 The question is did you have it? You know, it's 0:07:44.280 --> 0:07:46.160 usually not like what were you thinking when you were 0:07:46.160 --> 0:07:49.000 carrying the due case full of cocaine? It's like self 0:07:49.000 --> 0:07:52.239 evident here. It's different though with any type of white 0:07:52.280 --> 0:07:56.720 collar fase and these type of charges, you know, fraud charges, 0:07:56.840 --> 0:08:00.640 you have to show often specific intents. So that means 0:08:00.640 --> 0:08:03.240 that the person set out knowing what they were trying 0:08:03.240 --> 0:08:05.480 to do to defraud the person and actually did then 0:08:05.560 --> 0:08:07.800 defraud them, or at least attempted to defraud them. So 0:08:07.880 --> 0:08:10.200 that's a pretty eye burden, and you have to show 0:08:10.240 --> 0:08:14.000 up i by proof beyond a reasonable doubt too. Here though, 0:08:14.080 --> 0:08:18.760 the prosecutors have a wealth of apparent inside witnesses, the 0:08:18.760 --> 0:08:22.400 lieutenants you mentioned, as well as tens of thousands, millions 0:08:22.440 --> 0:08:25.400 of pages of documents and communications. Now, this case isn't 0:08:25.440 --> 0:08:28.640 going to be you know, ten thousand exhibits, you know, 0:08:28.800 --> 0:08:32.080 hundreds of thousands of communications. That's just an overwhelming amount. 0:08:32.200 --> 0:08:37.600 Even in a case with voluminous discovery or luminous document 0:08:37.679 --> 0:08:41.680 sized or obtained. Usually the prosecutors focused on a set 0:08:41.720 --> 0:08:45.839 of key documents or communications and they try to show 0:08:45.920 --> 0:08:50.080 the jewelry as easily as possible and as in a 0:08:50.160 --> 0:08:52.520 non confusing manner, what happened here, And they're going to 0:08:52.559 --> 0:08:57.040 highlight I'm sure certain types of statements, certain communications, and 0:08:57.120 --> 0:09:00.080 certain key documents. Even the case is this bit, it 0:09:00.160 --> 0:09:02.760 often comes down to maybe ten or twenty documents that 0:09:02.840 --> 0:09:06.920 are really central to the prosecution's theory, and the same 0:09:07.000 --> 0:09:09.520 number that may be central to the defense. So even 0:09:09.559 --> 0:09:12.200 though this may seem like millions and millions of pages 0:09:12.240 --> 0:09:14.880 of documents, I'm sure it is. Often these cases come 0:09:14.920 --> 0:09:18.400 down to a very discreete set of communications and documents. 0:09:18.679 --> 0:09:22.600 He's had some pre trial setbacks, including that he's now 0:09:22.640 --> 0:09:25.800 in jail. Judge Kaplan put him in jail because of 0:09:25.840 --> 0:09:28.959 communications he made. How much more difficult does it make 0:09:29.040 --> 0:09:32.360 it if your client is in jail in the final 0:09:32.360 --> 0:09:34.080 weeks of preparation for the trial. 0:09:35.040 --> 0:09:38.920 It's just magnitudes more difficult. I mean even in the 0:09:39.160 --> 0:09:41.840 months before, at any point before. It's more difficult when 0:09:41.880 --> 0:09:46.280 your client is detained leaving up the trial because you're 0:09:46.320 --> 0:09:49.400 often wanting to meet with them talk about different pieces 0:09:49.400 --> 0:09:53.080 of evidence. And when someone's in jail, you can't just 0:09:53.240 --> 0:09:57.000 pick up the phone or send them an email or 0:09:57.080 --> 0:09:59.960 a text message or whatever. And these jails have rules 0:10:00.080 --> 0:10:03.120 about when you know you can meet for how long. Now, 0:10:03.200 --> 0:10:05.200 lawyers are given a lot more leeway than just a 0:10:05.240 --> 0:10:08.280 family member or a friend trying to visit somebody, but 0:10:08.600 --> 0:10:11.200 there are still you know, rules and times, and they 0:10:11.200 --> 0:10:15.000 can't communicate in a certain manner. So it just makes 0:10:15.000 --> 0:10:18.240 it a lot more difficult for the defense lawyers to prepare. 0:10:18.679 --> 0:10:21.640 I suspect there are people there with him every day 0:10:21.679 --> 0:10:24.160 and the lead up to it, whether it's more junior 0:10:24.160 --> 0:10:27.240 attorneys or pairalegals, and sometimes the lead attorneys will of 0:10:27.240 --> 0:10:29.679 course be visiting and talking through issues with them. But 0:10:29.800 --> 0:10:32.920 then those attorneys have to leave their offices, go through security. 0:10:32.960 --> 0:10:35.080 They can't bring their phones in, they can usually only 0:10:35.080 --> 0:10:37.360 bring a laptop. They set up in a special way 0:10:37.360 --> 0:10:40.200 that the jail permits, and so it just makes it 0:10:40.240 --> 0:10:44.000 a lot more difficult for everybody involved in preparing the defense. 0:10:44.040 --> 0:10:46.600 And the prosecutors don't have that disadvantage. You know, they're 0:10:46.640 --> 0:10:49.600 at their offices, they're meeting with their witnesses outside. Though 0:10:49.720 --> 0:10:52.800 you know, this was a major stepback for Sam's legal 0:10:52.840 --> 0:10:55.480 defense team. I don't think there's any way to sugarcoat. 0:10:54.960 --> 0:10:58.760 That Bankman Freed's lawyers want to use an advice of 0:10:58.880 --> 0:11:02.400 council defense and the judge hasn't decided yet whether he's 0:11:02.440 --> 0:11:05.280 going to allow them to do so. Tell us about 0:11:05.280 --> 0:11:07.600 that defense. In the context of this case. 0:11:08.280 --> 0:11:12.120 That's a defense that is often considered and rarely deployed. 0:11:12.360 --> 0:11:14.600 And the reason why is if you rely on an 0:11:14.640 --> 0:11:17.960 advice of council defense. And basically what you're saying is, hey, 0:11:18.040 --> 0:11:20.800 my lawyers told me this was fine. You know, they 0:11:20.840 --> 0:11:22.880 may have been wrong ultimately, but that's not my fault 0:11:22.880 --> 0:11:25.600 because I actually went to lawyers and sought legal advice 0:11:25.720 --> 0:11:28.120 and they gave me their legal opinion, and I am 0:11:28.120 --> 0:11:31.240 good faith relied on it. The difficulty with that is 0:11:31.480 --> 0:11:34.000 that defense in general is one and this is the 0:11:34.000 --> 0:11:37.360 biggest hurdle. You have to disclose to your lawyer under 0:11:37.360 --> 0:11:40.400 this defense all the facts that were relevant to them 0:11:40.600 --> 0:11:43.600 giving you their opinion, and that's usually the major hang up. 0:11:44.480 --> 0:11:49.080 So you can't just tell them, Okay, here are facts 0:11:49.120 --> 0:11:53.000 AB and D and forget to tell him about B. 0:11:54.440 --> 0:11:56.680 Is if you don't tell him C, that would change 0:11:56.800 --> 0:12:00.000 their legal opinion, and so that defense is often thought, 0:12:00.720 --> 0:12:04.120 but usually the issue is coming down to the missing 0:12:04.520 --> 0:12:08.520 factual disclosure that would allow the lawyer to render legal advice. 0:12:08.960 --> 0:12:12.400 I am skeptical that they'll raise that defense, or if 0:12:12.440 --> 0:12:15.240 they do that it would succeed, But you know, I'm 0:12:15.280 --> 0:12:19.760 not inside the interworkings defensive course and don't know. But 0:12:20.040 --> 0:12:22.559 judges do want to know in advance a trial if 0:12:22.559 --> 0:12:24.920 that defense is being raised, because it creates a lot 0:12:24.960 --> 0:12:28.400 of different hurdles for the prosecution, because the prosecution will 0:12:28.440 --> 0:12:32.040 want to know kind of what's coming down the pipe. 0:12:32.240 --> 0:12:36.200 And so I think it's unlikely this defense is actually raised, 0:12:36.440 --> 0:12:38.800 but if it is, it will make for a much 0:12:38.800 --> 0:12:40.880 more interesting trial. It's already an interesting trial. 0:12:41.160 --> 0:12:45.760 The judge is ruled that SBF can't call seven expert 0:12:45.760 --> 0:12:48.520 witnesses he wanted to call, though he left the door 0:12:48.559 --> 0:12:52.080 open to call. I think too in response to the 0:12:52.080 --> 0:12:55.440 government's witnesses, perhaps, what do you think about the judge 0:12:55.520 --> 0:12:57.239 just ruling out these witnesses. 0:12:57.920 --> 0:13:00.920 I think judges are fine. In trial is often involved 0:13:00.920 --> 0:13:03.600 about all of experts. So the offense will put on 0:13:03.679 --> 0:13:06.240 some experts, and the prosecution will put on some experts, 0:13:06.400 --> 0:13:08.400 and they'll be talking about the same things, and then 0:13:08.480 --> 0:13:11.920 it's up to the jury to decide whose testimony they 0:13:11.960 --> 0:13:15.080 want a credit of those experts. What they don't want 0:13:15.160 --> 0:13:18.360 is a lot of duplicative experts, A bunch of experts 0:13:18.360 --> 0:13:21.040 on one side all saying the exact same thing. So 0:13:21.120 --> 0:13:23.400 that it feel like, well, we have six experts say this, 0:13:23.520 --> 0:13:26.040 you only have two, and so that's not really what 0:13:26.080 --> 0:13:29.320 they're looking for. And so I think judges like to 0:13:29.480 --> 0:13:32.600 narrow down the number of experts to make sure that 0:13:32.679 --> 0:13:35.880 they're touching on the same issues and not being duplicative. Also, 0:13:35.920 --> 0:13:39.400 there's sometimes areas that aren't really the subject of expert testimony. 0:13:39.840 --> 0:13:42.120 Both the prosecutors and the defense may try to call 0:13:42.160 --> 0:13:45.280 somebody and actually it's really a factual issue. So the 0:13:45.360 --> 0:13:48.800 judge instructs on the law and the jury decides the facts, 0:13:49.640 --> 0:13:52.640 and the experts can offer an opinion in a specialized 0:13:52.679 --> 0:13:56.160 area for the jurors to consider, but they can't tell 0:13:56.200 --> 0:14:03.600 the jurors ultimately like this means this right, Like you 0:14:03.640 --> 0:14:06.120 should assume, based on this set of fact that there 0:14:06.160 --> 0:14:08.320 is no way this person couldn't have the intent to 0:14:08.360 --> 0:14:11.079 do this. You know, they can't go to the ultimate issue, 0:14:11.160 --> 0:14:13.920 that's what it's called. That's up for the jury. So 0:14:14.360 --> 0:14:19.480 this judge is a very sophisticated, smart deson judge who 0:14:19.520 --> 0:14:22.120 was known to run a tight ship, and it's not 0:14:22.200 --> 0:14:25.120 surprising to me that he would rule a way to 0:14:25.120 --> 0:14:28.480 try to keep the trial moving along and eliminate some 0:14:28.560 --> 0:14:29.560 of the experts. 0:14:30.080 --> 0:14:33.880 I mean, besides possibly advice of counsel. What do you 0:14:33.960 --> 0:14:36.640 think might be his defense. 0:14:37.640 --> 0:14:41.000 Well, it seems to be his defense is that he 0:14:41.200 --> 0:14:43.640 was out of the loop, that things were happening, that 0:14:43.720 --> 0:14:46.520 he was busy doing certain things, and that other things 0:14:46.520 --> 0:14:49.520 behind the scenes people were doing either without his permission 0:14:49.600 --> 0:14:52.720 or knowledge. Now we won't know intel opening statements how 0:14:52.760 --> 0:14:55.320 he's going to present his defense, but that seems to 0:14:55.360 --> 0:14:58.320 be the angle they are if you tease out things 0:14:58.320 --> 0:15:01.000 from the defense filings, they they're going and it may 0:15:01.040 --> 0:15:02.840 be the added layer of not only getting not to 0:15:02.920 --> 0:15:04.720 know exactly what was going on, but the things he 0:15:04.800 --> 0:15:07.680 did know that were going on, he had sought legal 0:15:07.680 --> 0:15:10.520 advice far and thought they were fine. That appears to 0:15:10.520 --> 0:15:13.440 be the direction of defense is headed. But we really 0:15:13.520 --> 0:15:17.400 won't know, and they may pivot or spand or narrow 0:15:17.440 --> 0:15:19.840 the scope of the defense. So we really won't know 0:15:19.960 --> 0:15:23.120 until opening statements, and we frankly may not even know 0:15:23.320 --> 0:15:27.480 until his closing statement because the government has the burden 0:15:27.520 --> 0:15:30.520 of proof, and you know they're going to put on 0:15:30.600 --> 0:15:33.720 a very thorough open statement that explains their case and 0:15:33.760 --> 0:15:36.480 why they think, you know, Sam committed these crimes and 0:15:36.520 --> 0:15:38.680 that they can prove that they meet all the elements 0:15:38.680 --> 0:15:42.120 of the charges. Sometimes the defense puts on a much 0:15:42.160 --> 0:15:45.040 more higher level opening statement that asks the jurors to, 0:15:45.200 --> 0:15:47.320 for example, pay attention to the evidence, to keep an 0:15:47.320 --> 0:15:51.000 open mind, reminds the jury that the defendant, you know, 0:15:51.080 --> 0:15:53.480 is in the centutel proven guilty, and the high burden 0:15:53.520 --> 0:15:56.120 the government has to meet hereof be on a reasonable 0:15:56.160 --> 0:15:59.080 doubt that seems less likely in this case. The case 0:15:59.120 --> 0:16:01.480 is obviously gotten a lot of attention, and I think 0:16:01.520 --> 0:16:05.080 when you talked about the billions of dollars at issue here, 0:16:05.440 --> 0:16:08.280 the sheer number of things that went on here, I 0:16:08.280 --> 0:16:10.760 think the defense is going to offer a pretty robust 0:16:10.800 --> 0:16:11.640 opening statement. 0:16:12.240 --> 0:16:15.480 Do you think that Sam Bankman Freed will take the stand. 0:16:16.320 --> 0:16:18.960 I think that's more of a possibility here than is 0:16:19.560 --> 0:16:23.240 regularly the case. Ultimately, that is not his lawyer's decision. 0:16:23.400 --> 0:16:27.920 That's his decision based on his talks with the media, 0:16:28.480 --> 0:16:33.920 his vocal personality on social media, and sort of his 0:16:34.680 --> 0:16:38.040 need to stay in the limelight here. I would be 0:16:38.160 --> 0:16:40.200 surprised if he didn't take the stand, but I think 0:16:40.240 --> 0:16:43.880 it's possible he won't because it's is very unusual I'm 0:16:44.440 --> 0:16:45.880 with put a study on it, but I bet at 0:16:45.960 --> 0:16:47.960 least ninety percent of the time the defendant does not 0:16:48.000 --> 0:16:50.120 get on the stand. But here I will put the 0:16:50.120 --> 0:16:52.360 odds at at least fifty to fifty that he gets 0:16:52.400 --> 0:16:54.400 on the stand. And that's just because of the way 0:16:54.800 --> 0:16:57.400 his personality. He seems like the type of person that 0:16:57.480 --> 0:17:01.760 wants to get up there and give his version of events. 0:17:01.880 --> 0:17:04.080 I think if he does do that, you're going to 0:17:04.160 --> 0:17:08.000 have days of testimony here, and it could be very 0:17:08.040 --> 0:17:11.600 similar to what happened in the Arena's Child of Elizabeth Holmes, 0:17:11.680 --> 0:17:15.239 where she got on the stand, you know, tried to 0:17:15.240 --> 0:17:19.760 convince the jury of her version of events, obviously unsuccessfully. 0:17:20.160 --> 0:17:22.719 Is this a case where it would be difficult to 0:17:22.880 --> 0:17:23.840 find a jury? 0:17:25.040 --> 0:17:28.040 No, I mean every case you can get a jury, right, 0:17:28.080 --> 0:17:30.960 even in the most high profile cases in the United 0:17:31.000 --> 0:17:35.240 States throughout the last you know, fifty years, they've been 0:17:35.280 --> 0:17:38.280 able to find juries. You know, it's going to take 0:17:38.320 --> 0:17:41.399 some time here because obviously this case has gotten so 0:17:41.640 --> 0:17:45.760 much attention, and a number of people probably do have 0:17:45.840 --> 0:17:49.719 preconceived notions about his guilt or innocence. Most likely, I 0:17:49.840 --> 0:17:52.679 guess they have preconceived notions that he's guilty, and so 0:17:52.760 --> 0:17:55.800 I think it will take some time, at least a 0:17:55.800 --> 0:17:59.560 few days to get it very selected. This judge, these 0:17:59.680 --> 0:18:02.879 lawyers will work their way through the perspective jurors and 0:18:02.920 --> 0:18:04.680 find them. I think they're going to call a large 0:18:04.800 --> 0:18:07.840 group of people though well over one hundred I would 0:18:07.840 --> 0:18:11.320 guess as a pool of jurors to work their way through. 0:18:12.080 --> 0:18:15.000 But ultimately, even knowing about a case doesn't preclude you 0:18:15.040 --> 0:18:17.800 from being a juror. The real test is are you 0:18:17.840 --> 0:18:21.320 willing to be fair and impartial? That's what the judge 0:18:21.359 --> 0:18:24.159 is going to be looking for is to see twelve 0:18:24.240 --> 0:18:26.040 fare and impartial jurors. 0:18:26.119 --> 0:18:28.600 Jurors who can sit for the up to six weeks 0:18:28.640 --> 0:18:31.240 the trial is expected to take. Thanks so much for 0:18:31.280 --> 0:18:34.280 being on the show, Brian. That's Brian Klein, a partner 0:18:34.400 --> 0:18:37.480 Waymaker Law. Coming up next on the Bloomberg Lawn Show, 0:18:37.760 --> 0:18:42.440 What happens when jury deliberations descend into chaos. I'm June 0:18:42.440 --> 0:18:47.280 Grosso and you're listening to Bloomberg. An Atlanta trial threatened 0:18:47.280 --> 0:18:51.320 to descend into chaos after jurors clashed over race and 0:18:51.440 --> 0:18:55.400 class while wayne charges against a wealthy developer and two 0:18:55.440 --> 0:18:59.399 others accused of arranging one point three billion dollars in 0:18:59.480 --> 0:19:03.359 phony two tax deductions. Problems began to emerge soon after 0:19:03.359 --> 0:19:08.160 the jurors began deliberating last week and deteriorated into acrimony, 0:19:08.480 --> 0:19:12.400 causing jurors to complain to the judge. Federal Judge Timothy 0:19:12.480 --> 0:19:16.440 Batton then interviewed jurors in open court and in his chambers, 0:19:16.720 --> 0:19:20.119 met with lawyers, and finally, after a change of heart, 0:19:20.480 --> 0:19:24.560 dismissed one juror. My guest is Bloomberg Legal reporter David 0:19:24.600 --> 0:19:28.000 Voriacis David tell us what this trial was about. 0:19:28.720 --> 0:19:33.000 Jack Fisher is a developer and accountant who was on 0:19:33.200 --> 0:19:41.160 trial for selling tax deductions to wealthy taxpayers in exchange 0:19:41.440 --> 0:19:49.320 for investments in a group financing known as syndicated conservation easements. Now, 0:19:49.359 --> 0:19:52.440 this is an arrangement that the IRS hates and has 0:19:52.480 --> 0:19:58.240 been cracking down on. And essentially what happened was partnerships 0:19:58.840 --> 0:20:03.880 would promise that they would not develop land, and in return, 0:20:04.119 --> 0:20:10.040 the investors would get inflated tax deductions. According to the IRS, 0:20:10.560 --> 0:20:14.560 and those tax deductions in the Jack Fisher case relied 0:20:14.800 --> 0:20:21.240 on inflated appraisals and on backdated documents. The IRS had 0:20:21.280 --> 0:20:26.120 been investigating this process for several years, and Jack Fisher 0:20:26.240 --> 0:20:31.439 was the first promoter of syndicated conservation easements to be indicted. 0:20:31.960 --> 0:20:36.280 He went to trial in Atlanta over the summer, and 0:20:36.400 --> 0:20:38.560 his trial lasted nine weeks. 0:20:39.440 --> 0:20:44.199 Jury deliberations are secret. How did you find out that 0:20:44.760 --> 0:20:46.200 there was trouble in the jury room? 0:20:47.080 --> 0:20:51.080 The jurors themselves complained to the judge that one of 0:20:51.160 --> 0:20:54.680 the jurors, who was referred to in court papers as 0:20:54.800 --> 0:21:00.800 Juror twenty six, was refusing to deliberate, and that juror 0:21:00.960 --> 0:21:04.960 walked out of the deliberation room and went upstairs in 0:21:05.040 --> 0:21:09.440 the courthouse. Now, jurors are not supposed to deliberate unless 0:21:09.520 --> 0:21:13.560 all twelve are together at the same time in the 0:21:13.640 --> 0:21:17.320 same room, So without her in the room, they could 0:21:17.400 --> 0:21:22.359 not deliberate. What was a very complicated fraud case that 0:21:22.480 --> 0:21:27.919 involved dozens of charges against Jack Fisher and two other defendants. 0:21:28.480 --> 0:21:31.960 There were no racial aspects of the trial, but racist 0:21:32.000 --> 0:21:34.400 comments were made in the jury room. 0:21:34.960 --> 0:21:39.960 That's correct. This was a pure financial trial that turned 0:21:40.000 --> 0:21:48.640 on complicated testimony about partnerships and about tax deductions. And 0:21:49.240 --> 0:21:55.720 so what happened was the judge on Monday of last week, 0:21:56.119 --> 0:22:01.040 decided that he would interview several of the jurors in chambers, 0:22:01.720 --> 0:22:06.000 and this is very unusual because during jury deliberations it's 0:22:06.040 --> 0:22:09.880 considered a sacro saying process that no one is supposed 0:22:09.880 --> 0:22:13.480 to know what goes on. So what came out as 0:22:13.520 --> 0:22:17.560 a result of those interviews by the judge was that 0:22:17.720 --> 0:22:21.199 one of the jurors during number twenty six, who's white, 0:22:21.600 --> 0:22:26.040 said that another jur during forty four, who is black, 0:22:26.840 --> 0:22:32.200 had said weeks earlier that he would convict these defendants 0:22:32.280 --> 0:22:38.399 because they're rich, white, and entitled. And then juror twenty six, 0:22:38.760 --> 0:22:42.840 again who's white, said that she felt that she was 0:22:42.960 --> 0:22:47.399 standing up for white people during the deliberations, and this 0:22:47.520 --> 0:22:50.640 she said in the privacy of the judge's chambers. However, 0:22:50.680 --> 0:22:54.240 it was transcribed so the other lawyers could see it, 0:22:54.280 --> 0:22:58.359