The Tribune

Sam Bankman-Fried yesterday sought 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.

The embattled crypto currency exchange founder, in numerous legal filings with the southern New York federal court, argued that charges involving breaches of US campaign finance laws and 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, are focusing 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 the 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.

Mr Mitchell signed it within hours of the FTX founder waiving his rights to contest his extradition, and consenting to his transfer to US custody, a sign of the Government's eagerness to remove him from The Bahamas as swiftly as possible and resuce negative international media coverage in the aftermath of the crypto exchange's collapse.

James Lewis KC, a UK barrister self-described as "an expert in the extradition law of The Bahamas", and who was part of the legal team that helped infamous Czech financier, Viktor Kozeny, escape the US authorities' clutches more than a decade ago, asserted that Article 14 remained in full effect even though Mr Bankman-Fried had consented to "simplified extradition procedures".

"The minister of foreign affairs (Mr Mitchell) could not order Mr Bankman-Fried’s extradition unless he determined that the treaty incorporates the rule of specialty," Mr Lewis alleged in an affidavit. "During the extradition proceedings in The Bahamas, it was the understanding of all parties in court, and the court itself, that the specialty provisions applied notwithstanding the use of the simplified procedure.

"There was no waiver of the rule of specialty. To the contrary, there was an express acknowledgment that it applied." Jerone Roberts, Mr Bankman-Fried's Bahamian attorney, in hearings before the Magistrate's Court had described Article 14 as "the most important aspect of these proceedings" as it meant "a person extradited under this treaty may only be detained, tried or punished in the requesting state for the offences for which extradition was granted".

However, Mr Lewis said the 'warrant of surrender' signed by Mr Mitchell contained no mention of any charges related to US campaign finance law violations. As a result, he argued that the minister of foreign affairs had seemingly determined that this was "not an extraditable offence under Bahamian law" or there was insufficient information to make such a determination.

"Since extradition was not granted on [that count], detaining, trying or punishing Mr Bankman-Fried for campaign finance conspiracy violates Article 14 of the Treaty," Mr Lewis said. As for the FCPA violations, which are tied to an alleged $40m bribe paid to Chinese officials, plus bank fraud and the unlicensed money transmission business, the UK KC said the treaty creates "a standing objection on behalf of The Bahamas" to any new charges being added post-extradition.

As a result, Mr Lewis argued that the US authorities needed to obtain The Bahamas "express consent" to add these new charges against Mr Bankman-Fried. This permission, he said, could only be given once Mr Mitchell determines that such conduct rises to "a Bahamian extradition offence".

"My understanding is that the United States has not provided the information necessary to enable the minister to make the requisite determination," Mr Lewis asserted, explaining that as a result all these charges - as well as the US campaign finance breaches - violate the Bahamas-US extradition treaty and should be dismissed.

"To overcome this standing objection, the US must obtain The Bahamas’s affirmative consent to detain, try or punish Mr Bankman-Fried for the new counts by following the procedures set forth in the treaty and the Extradition Act. Moreover, the Treaty and the Extradition Act require the minister to determine whether the dual criminality requirement is satisfied before consenting on behalf of The Bahamas."

Mr Lewis cited a February 22, 2023, letter to Judge Lewis Kaplan, who is presiding over Mr Bankman-Fried's case, as evidence that the US authorities knew they had to obtain The Bahamas' "consent" to bring additional charges post-extradition. The document, from the US attorney's office for the southern district of New York, explained that a fresh indictment had been kept sealed until the necessary "diplomatic notifications" were given.

"As the court knows, the defendant was previously extradited from The Bahamas on an indictment returned on December 9, 2022," the prosecuting authority said. "The [latest] indictment has been sealed so as to permit time for the Government to make the appropriate diplomatic notifications about the new charges." This, Mr Lewis indicated, refers to "diplomatic notifications" to The Bahamas.

Mr Bankman-Fried and his legal team, slamming the charges stemming from FTX's implosion as "vague and non-specific", asserted: "Armed with its vague pleading, the [US] government sought to extradite Mr Bankman-Fried from The Bahamas.

"But Mr Bankman-Fried had not defrauded anyone, nor intended to defraud anyone. And he had been a lawful permanent resident of The Bahamas for two years. Nevertheless, the government insisted that he be held in a Bahamian prison during the proceedings and then sought to end-run around the extradition treaty between the US and The Bahamas.

"After Mr Bankman-Fried properly consented to a simplified extradition procedure, the Bahamian government agreed to release him to US authorities and issued a warrant of surrender specifying that he be tried on seven of the eight counts in the original indictment - but not the count relating to alleged campaign finance violations. Despite this clear direction from the Bahamian government, the government now seeks to have Mr Bankman-Fried tried on that charge as well," they added.

"And after Mr Bankman-Fried returned to this country, the government superseded the original indictment not once but twice, improperly adding several new, unrelated charges without first obtaining the express consent of the Bahamian government. The court should not permit trial to proceed on the charges brought in violation of the extradition treaty and the rule of specialty.....

"In sum, the [US] government’s haste and apparent willingness to proceed without having all the relevant facts and information has produced an indictment that is not only improperly brought but legally flawed and should be dismissed. Mr Bankman-Fried’s written consent did not in any way suggest that he waived the protection of the rule of specialty or dual criminality; to the contrary, it indicated that he intended to preserve his rights thereunder."