The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

US prosecutors will drop charges of illegal election campaign contributions against embattled FTX co-founder, Sam Bankman-Fried, after The Bahamas objected to their inclusion in his indictment following extradition.

Attorneys representing Damian Williams, the southern New York district attorney leading Mr Bankman-Fried’s prosecution, informed Judge Louis Kaplan in a late July 26, 2023, letter that they will not proceed with that one specific charge following receipt of formal notification by the Bahamian government.

Referring to Mr Bankman-Fried’s previous failed bid to dismiss this charge, the US Attorney’s Office for southern New York wrote: “In opposing the defendant’s motion, the government informed the court that the US had sought clarification from The Bahamas regarding whether this count was included in the defendant’s extradition. The court directed the parties to keep the court informed of the status of the government’s request for clarification.

“The government has been informed that The Bahamas notified the US earlier today that The Bahamas did not intend to extradite the defendant on the campaign contributions count. Accordingly, in keeping with its treaty obligations to The Bahamas, the government does not intend to proceed to trial on the campaign contributions count.”

The move comes with Mr Bankman-Fried seeking to dismiss multiple fraud, bribery and corruption-related charges stemming from FTX’s collapse on the grounds that the US has violated The Bahamas’ Extradition Act and treaty.

Although the charges involving breaches of US campaign finance laws have been dropped, he is still fighting those involving the Foreign Corrupt Practices Act (FCPA), plus bank fraud and operating an unlicensed money transmission business, should be struck out because they run afoul of key provisions in The Bahamas-US extradition treaty.

Mr Bankman-Fried and his legal advisers, in alleging that the federal authorities are doing an “end-run” around the treaty, have focused their arguments on its Article 14. Known as the “rule of specialty”, this stipulates that someone being extradited from The Bahamas “may only be detained, tried or punished” in the US “for the offence for which extradition was granted”, while setting out other criteria.

They are arguing that this article has been breached by the US authorities adding the charges FTX’s founder now wants dismissed AFTER he was extradited from The Bahamas in late 2022. Mr Bankman-Fried’s “warrant of surrender”, signed by Fred Mitchell, minister of foreign affairs and the public service, on December 21, 2022, makes no mention of any FCPA or US campaign finance law violations.

The warrant, which was among documents filed with the New York court, stipulated that as far as the Bahamian authorities were concerned Mr Bankman-Fried was being extradited to face two counts of mail fraud; two counts of conspiring to falsify accounts; two counts of conspiracy to commit fraud by false pretences; and conspiracy to commit money laundering.

Subsequently, the Supreme Court blocked the Bahamas government from - temporarily at least - giving the US permission to bring these charges against Mr Bankman-Fried.

And Justice Loren Klein also gave the imploded crypto exchange’s chief the go-ahead to launch a Judicial Review challenge against two Cabinet ministers, Mr Mitchell and Ryan Pinder KC, the attorney general, over assertions he has “a right to be heard” before this nation decides whether to allow US federal prosecutors to proceed with new counts and charges added after Mr Bankman-Fried was extradited to New York just prior to Christmas 2022.

The FTX founder’s case has already been split into two separate trials over “uncertainty” as to when The Bahamas would make a decision on whether he could be tried on additional charges.

Judge Kaplan, in a late June 15, 2023, order, ruled that Mr Bankman-Fried will be tried separately on March 11, 2024, on the charges that did not form part of his extradition from The Bahamas. He issued the order “in view of the uncertainty” over whether The Bahamas will give permission for the ex-FTX chief to be tried on these counts just two days after Justice Klein’s ruling.

Mr Bankman-Fried’s original October 2023 trial will thus proceed only on the offences for which he has been extradited. Mr Williams, in arguing that the case be split into two trials, said the FTX founder’s decision to bring litigation in The Bahamas meant this nation’s “consent” to the additional charges may not be obtained until after the initial trial date.

“In light of the uncertainty concerning when The Bahamas will render a decision with respect to specialty, and to simplify the proof at trial and decrease the burden of trial preparation on the defendant, the [US] government is prepared to proceed to trial as scheduled on the counts contained in the original Indictment, and to consent to discretionary severance.... of the additional counts contained in the [last] indictment,” Mr Williams said in mid-June 2023.

“The [US] government respectfully requests that the court schedule trial on these counts for the first quarter of 2024, or the nearest time thereafter convenient to the court, pending resolution of the government’s request for a specialty waiver [from The Bahamas].” Judge Kaplan duly granted his wish.