Founder of FTX Sam Bankman Fried is harassing a key witness against him in his upcoming trial by giving a newspaper personal things she wrote while serving as chief executive of his cryptocurrency hedge fund trading company, prosecutors say.
They asked a judge on Thursday night to order trial participants not to make statements that could taint the yet-to-be-chosen jury in a criminal case over allegations that Bankman-Fried and other top executives misled investors and plundered deposits from FTX customers, in part to fund lavish lifestyles.
In a letter to Judge Lewis A. Kaplan, prosecutors said Bankman-Fried forwarded some of Caroline Ellison’s personal correspondence to The New York Times. They said it had the effect of harassing her and seemed intended to deter other potential trial witnesses from testifying.
They called it an effort to “publicly discredit a government witness” and interfere with an Oct. 2 trial.
Ellison, 28, was CEO of Alameda Research, a cryptocurrency hedge fund trading firm that was an offshoot of FTX.
FTX went bankrupt in November when the global stock market ran out of money after the equivalent of a bank run.
Ellison pleaded guilty in December on criminal charges carrying a potential sentence of 110 years in prison. She agreed to testify against Bankman-Fried, 31, in a deal that could result in leniency.
Prosecutors said Bankman-Fried’s attorneys confirmed their client shared documents not currently part of trial evidence with The New York Times before it published an article Thursday with the headline: “Private writings of Caroline Ellison, star witness in FTX case.”
According to the article, Ellison wrote that she didn’t think she was well suited to lead Alameda or decisive as a leader, and the doubts surfaced as she faced the breakdown of a sporadic romantic relationship with Bankman-Fried.
The Times reported that in April 2022, Ellison wrote in a Google document that an earlier breakup with Bankman-Fried had “significantly diminished my enthusiasm for Alameda” and that life at the hedge fund “felt too associated with you in a painful way.”
Attorneys for Ellison and Bankman-Fried did not return emails seeking comment on Friday. A spokesman for prosecutors declined to comment.
In their letter to Kaplan, prosecutors refrained from asking the judge to jail Bankman-Fried in the weeks before his trial.
They said Ellison was required to testify at trial that she agreed with Bankman-Fried to defraud FTX clients and investors and Alameda lenders.
Prosecutors accused Bankman-Fried of trying to “cast Ellison in a bad light and advance his defense through the press and outside the constraints of the courtroom and the rules of evidence: that Ellison was a spurned lover who perpetrated these crimes alone.”
They said they expected “overwhelming evidence to belie this defense”, and they called it inappropriate and prejudicial for Bankman-Fried to disparage Ellison’s credibility before trial.
Prosecutors also wrote that attorneys for potential trial witnesses, including some who live overseas, said their clients were reluctant to testify in a case that has received ongoing media attention.
“These witness concerns will only be exacerbated if witnesses are led to fear that a consequence of testifying against the accused may include personal humiliation and efforts to discredit their reputation that go beyond what the rules of evidence might permit on cross-examination,” prosecutors wrote.
Earlier this year, Kaplan suggested Bankman-Fried’s imprisonment was possible after prosecutors complained they had found ways to circumvent limits on his electronic communications as part of a $250 million personal recognizance issued after his December arrest that requires him to live with his parents in Palo Alto, California.
In February, prosecutors said he may have tried to influence a witness when he sent an encrypted message in January via a text messaging app to a top FTX attorney, saying he “would really like to reconnect and see if there’s a way for us to have a constructive relationship, use each other as resources when possible, or at least work things out with each other.”
At a hearing in February, the judge said prosecutors described things Bankman-Fried did after his arrest “which suggests to me that he may have committed or attempted to commit a federal crime while on release.”
