SPEAKER_00: there's a an intersection between sort of vc thinking and philanthropy of like let's find cutting-edge non-profits that can go to scale i know i've i know those people but effective algorithm goes one step further and says we're going to go out and make all kinds of money and then we're going to save the world i guess you could say it's kind of kind of like it's not like you know andrew carnegie carnegie made the money and then did libraries this they're convincing themselves that the reason that they're doing these things is they ended up never doing it like with sam bankman freed this there was a big moment where they said the shod singh said i went

SPEAKER_01: to meet with with anthropic because i was i was going to make a donation because i love that technology so much and then the process then the question was well did you ever make a donation

SPEAKER_03: well no this week in startups is brought to you by squarespace turn your idea into a new website go to squarespace.com twist for a free trial when you're ready to launch use offer code twist to save 10 off your first purchase of a website or domain catalog stop wasting time and money with expensive design firms and unreliable freelancers get fast three-day turnarounds for a flat monthly fee with catalog get 1200 off right now at try catalog.com twist and dot tech domains has a new program called startups dot tech where you can get your company featured on this week in startups go to startups dot tech slash jason to find out how okay today on the podcast we have maybe the world's

SPEAKER_07: number one source on the sbf trial the explosive trial taking place in manhattan for for the founder

SPEAKER_08: of ftx who allegedly stole billions and billions of dollars matthew russell lee runs an account on

SPEAKER_07: twitter slash x called inner city press i-n-n-e-r city press i found out about this account when he was

David Friedberg: covering uh the the nicola uh trial we'll get into that in a minute but his account has absolutely blown up over the past couple weeks because of his extraordinary in-depth uh threads on the sbf

SPEAKER_07: trial he's one of the old school journalists out there who goes to the courts and does real reporting and so uh a little history uh for uh matthew and i who we've never met but back in september of 2022 matthew was covering the fraud case of former nicola ceo trevor milton you remember that i had trevor milton on this podcast episode 10 90 back in july of 2020 and during the case prosecutors

SPEAKER_08: actually played a clip of milton for that infamous interview that i did with him and that specific clip that was played in court is at the 46 minute mark in that episode it's when milton talks about being

SPEAKER_07: inspired by apple to launch the nicola badger that was a pickup truck that never launched because it inspired more consumers to buy the stock here's a clip so now you've got all this cash uh on

SPEAKER_10: the balance sheet and you've got all this runway but you this building a network of hydrogen chargers and coordinating the building of hydrogen trucks and satisfying a bunch of customers seems like an awful lot of work and then i'm not sure exactly the date you announced it what date did you announce that you're going to take on ford's f-150 pickup truck and elon cybertruck and the rivan rivan is uh the sorry rivian uh so now you decide effort i'm going to create an f-150 the best-selling car uh in the united states i think and obviously the best-selling truck why would you take on more work

SPEAKER_13: that's a good question yeah so here's the reason why our trucks are gravy train with money um that's where all the money comes from is our is our big semi trucks right the problem is is 90 of americans will never own a semi truck and so your investment port your invest your portfolio of investors can be very limited and we wanted to go and build a company that's gonna be worth 500 billion trillion dollars over say 10 or 10 or 15 years and if you're limiting yourself to 10 of the market you'll never do it no matter how good your numbers are the reason why people love apple that everyone touches their product why do they love google everyone touches their product so your what i did is i knew day one you know once once we started coming out we had all this gravy train coming in from the semi-truck program my my question was okay that's great but i'll never touch the average consumer so therefore 90 of investors will probably never invest in me so i needed to touch the consumer and so that the truck is for the profit the semi truck the pickup trucks for the consumer and the consumer is the one who is part of the robin hood portfolio is part of the the you know the family office or whatever and that's where all the the valuation of the company comes from all right a crazy

SPEAKER_16: crazy clip uh that episode recorded in july of 2020 the badger project was canceled four months

David Friedberg: later in november 2020 and obviously uh trying to bait retail investors to buy your company on the way to a trillion dollars quite a claim in 10 years um is a large part of um a bigger story milton wound up being found guilty of three of four counts of fraud in october of last year and he's uh getting sentenced in a few weeks faces a max of more than a decade in jail anyway

SPEAKER_19: uh my matthew russell lee welcome to the show great i'm glad to be on i do i do i very much remember

SPEAKER_00: that and it was that was a big part of the the the the jurors had also seen the the infamous uh ad for the semi truck where they had still had no motor and they put it on on a three percent incline to make it look like it was that it was running so it was a huge contrast to see but i agree the idea of sort of of of basically coming up with a product in order to make to make the stock sexy during covid where people are like whoa i've got this government check what a great company it's for climate change it was it was a it was smart while it lasted but he the the thing is norm a normal defendant would already have been sentenced after the this long after the conviction but he's managed to like he had a lot of post-trial motions he one juror contacted inner city press because once once the jury is released they they go online and they look at you know things about the trial and contacted me and i interviewed them they they basically they said a lot of kind of anti-corporate things and they described the deliberations and how people ended up thinking he was really like a smart punk and so that's been one of the basis of his of his appeal so we'll have to see what happens

David Friedberg: ultimately with trevor milton but he was convicted yeah and it really is particularly sinister you know when you are incompetent you know you're not going to be able to build the product and i think that is the part about this where you know in our industry the technology industry we have a long history matthew of fake it till you make it or you know set audacious goals uh in fact it is a big hairy goal uh uh big hairy audacious goal a b hag is a term they use that google and that's fine but something uh along the way to a big audacious goal can throw it off the rails what is that what when does it become a legal

SPEAKER_25: issue you know since we have a lot of founders listening in your mind between hey this is an audacious goal and maybe you're committing a crime i mean i think it's it's i'll say it is as

SPEAKER_19: although to the prosecutors defrauding investors is is as much of a of a of a fry you know securities

SPEAKER_00: fraud wire fraud crime as as defrauding let's say a depositor or somebody that i'm going to turn it to ftx somebody that put money and thought they were trading crypto when in fact sam was just moving the money elsewhere i think that the it becomes there there's you have to show it's like see enter you have to show that they knew that the statement was false that it wasn't just that they were sort of puffing puffery the same thing is actually coming up in this trump there's a trump trial right now in new york about his real estate and the idea that he somehow misled deutsche bank about the value of mar-a-lago and his various properties personally when i look at it it's hard for me to see

SPEAKER_28: deutsche bank as a big victim in the sense that it's their job to do due diligence there's another case

SPEAKER_00: it's charlie javis i don't know if you've heard about that one she had a she had a a uh trying to think what it was called she had a platform that was supposed to help people fill it out fafsa frank exactly and so yeah total fraud oh yeah we did cover frank yeah she she she sold she sold it to jpmorgan chase and claimed to have hundreds of thousands of customers she didn't she actually went out and just bought an email list but so that's fraud that's fraud at the same time what are the prosecutors this to me sounds more like a civil case in the sense that like jpmorgan chase dropped the ball they didn't do any due diligence and now alongside their civil case they have the prosecutors conveniently i'm not a fan of javi i'm just saying and then the other option obviously i'm sure you guys have talked about theranos and elizabeth holmes that's where it gets terrible that's where fake it when you're actually faking like cancer test results it's pretty yeah worse than real world harm yeah worse than a pickup trap worse than crypto so there's a there's a whole continuum here i will say just to do in fdx it's beyond i mean in trevor milton they did show sort of you know extravagant spending by milton in the caribbean but i think that the the the the prosecutors in the fdf case have really managed to show the specifics not just a sort of you know do you resent this type of this type of excess and the 35 million dollar condo over the bahamas but this the taking of customers money to make political contributions to give it to your brother's foundation to buy real estate for the parents who say they're such ethical you know uh uh um pro poor people i think that's ultimately if i were a juror that's the that's the real that's the that's

SPEAKER_35: what sort of gets their ire up and i don't know how bankment treaty is going to rebut that honestly

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SPEAKER_41: it yeah and so let's get to this the case has been going on for a couple weeks now and it's gotten

David Friedberg: really interesting because i think this is the key to it you know he's had like four of his top lieutenants plead guilty and i think three of them are cooperating with authorities in order to get reduced sentences i'm not sure if they've already negotiated those sentences or not i'll tell you if

SPEAKER_00: you want to know yeah they can't actually know just just as just to to explain that they don't know yet what their sentence is going to be they basically they plead guilty to a slew of charges all of which some of which have mandatory minimums and the government commits as long as they tell the truth whatever the outcome of the trial is commits to write something called the 5k1 letter to the judge when they come up from sentencing saying how useful their cooperation was and then it's totally in the judge's hands like honestly they're all they're totally it's total there's no guarantees here at all and honestly if if a judge himself concludes in this case it's judge lewis kaplan concludes that one of the witnesses might have been lying or trying to make themselves look better that's going to hurt them at sentencing so it's it's an interesting i think they had almost no choice they're going to get much less than if he's convicted than then sam bankman freed is but they definitely don't have any assurance of what that will be yeah and so they might get

SPEAKER_48: i mean if we're going to hear a percentage of it yeah like half of it a third of it whatever it is

SPEAKER_00: sometimes they get time served it's really it's really an interesting and i'm sure that they're all of them have like super high high power white shoe law firms representing them so i'm sure all of them have shown them like charts of like not just here's generally what cooperators uh might get i covered another crypto fraud case uh one coin which it didn't even have a blockchain the the it's called the the crypto queen a woman from yeah i remember yeah called called ruj ignatova anyway a cooperator against her who helped her launder money and then and then provided a lot of information to the government got five years so you can get wow yeah he got his name is gilbert he also violated his cooperation agreement by like selling his jet without telling the government stuff like that but so it's a there's no assurance they don't have any assurance but they definitely have an assurance that they'll do better than than uh the defendant if he's convicted if he gets off

SPEAKER_35: they're screwed because they're gonna go to jail and bankman freak won't but i i'm feeling wow yeah

SPEAKER_01: yeah i mean because they pled guilty right they pled guilty to they they can no longer say i didn't do it they they confess to all those things so so tell me you've been in the the actual courtroom

SPEAKER_07: sure and you are an expert at getting into the courtroom i'm just curious from a mechanic standpoint how does one get access to the court is it easy is it difficult you have to show up at 4 a.m

David Friedberg: do you know people there and yeah how does it work it's not i i will explain this i've been

SPEAKER_01: covering the court very like on a daily basis i used to do the same thing at the united nations

SPEAKER_00: until i my reporting there got me into some trouble there so i came down to the court and i was like here i am i was covering a un corruption trial chinese bribery of un officials and every day i have to i have to leave my my laptop and my phone downstairs i go upstairs and i noticed there were other reporters covering the trial that were not leaving the building to do broadcasts you know during the break but had their electronics with them so they haven't there's an in-house court system there's an there's an in-house press corps and a non-in-house press corps and the way it was explained to me and i i give them credit for this it's not just based on like oh you're a big journalist in from london here take a press pass basically they said to me it's not enough to just be covering one case no matter how much you are you have to cover you know a lot so now i mean i'm covering actually a lot i write 10 stories a day about the courthouse not all of them are financial fraud a lot of them i like criminal law but a lot of them i i i you know i i i there's some really long sentences being given out there was an in any event so i'm an in-house reporter there so i can bring the

David Friedberg: electronics in and i don't ask you a simple question there so you're in-house lawyer how do you sustain yourself this is a hobby or you seem to be doing this full-time so no no i mean a citizen journalist

SPEAKER_63: how do you make money yeah i was gonna i was gonna i was gonna break in when you said you may

SPEAKER_00: know it through the twitter with through the twitter feed which is or x feed which is free but i have a patreon i have a sub staff i have i have a you know you so there's a there's a variety of ways i would say it's actually i think this is a i don't want to say it's a new model of journalism well obviously corporate their corporate media is going through various trying to decide whether you should what the way i do is i i if i had my druthers i would put everything up for free i want people to know the information as it is i'll put almost every i'll put almost everything up for free but i'll also put put you know if i get documents i do a lot of foyer requests i do a lot you know the the people send me you know documents and so i put i put you could call it bonus material uh

SPEAKER_54: yeah sure on patreon and i do do you make a living do you do you make six figures doing this can you can you survive i'm surviving here i am here i am and that's what i do and it's it's kind of i kind of

SPEAKER_00: learned during in the un as well i had the same there were people that wanted it's a it's an interesting i think as a kind of i don't want to say a lone journalist i like i like beats where you can really everything is within walking distance for example i mean i'm covering a lot of cases and it's because all of these cases are in two buildings in lower manhattan that i have a past i can go back and forth between and i can really cover i can cover a lot of things and so and and it's the same the un for all of its failures i enjoyed covering it because it's just 42nd to 46th street first avenue to the river and yet you can cover a lot of things you can build up a readership and there are people

SPEAKER_07: that are willing to pay for it amazing so i'm really happy for that i everybody go to uh patreon right now and please subscribe to inner city press and we're going to do the same here from our program so thank you uh for you doing this so um tell me about the general vibes in the courtroom because these people work together um but they and they work together for years they're all very smart they're

David Friedberg: all very young they were all hopped up apparently on adderall speed all kinds of amphetamines which

SPEAKER_07: is a really interesting side discussion we'll put that on the side now put a pin in it but it doesn't seem like they had a massive amount of deep loyalty for spf and they have flipped on him but what is that like because they're all in the courtroom looking at each other but these all seem like

David Friedberg: really weird aspergery kind of adhd kids i think they've all used that in their defense so what what's

SPEAKER_72: the vibe and compared to other trials and have you ever seen anything like this yeah no it is it's

SPEAKER_01: extraordinary the first thing i'd say is that they're not all there at once like because they're

SPEAKER_28: witnesses you can't be in the courtroom for example when carol carolyn ellison was the first of these these three cooperators to testify gary wang and nishad singh were not even in or they're they had

SPEAKER_00: to basically vowed and not even follow the follow the testimony because you don't want witnesses you know sort of putting their testimony together like as she said i'll say this so but it so it's been one by one and and the highest profile one was was carolyn ellison because beyond being alameda's uh at one time co-ceo and there's another guy called sam tribucco that i'll put a pin in that and get back

SPEAKER_28: to it it's an interesting he hasn't shown up in the trial he hasn't been charged people are writing

SPEAKER_72: to me saying what was it like when carolyn was there very did they look at each other did they say hello to each other did they greet each other no they did not and in fact there was a

SPEAKER_01: a lot was made of this but when oh it is kind of like a perry mason like a like it's like your idea

SPEAKER_28: of what a courtroom would be they say do you see the defendant in the courtroom and she initially couldn't see him because he looks quite different than he did back in his back in his days of uh

SPEAKER_00: podcasts from the from from the bahamas with with big hair and cargo shorts he's now the hair has been cut he's a lot thinner which i don't know if he's trying they're gonna in closing try to say he's been mistreated in jail or something his suit is too big so there was definitely i think ellison was was a very strong witness because it combined both the her describing you know how it worked and she was definitely she pled guilty she she acknowledges that she knew that alameda that alameda had this incredible 65 billion dollar line of credit with ftx that when people thought they were sending in money to to to trade on the ftx platform it was being diverted to alameda but she says very much sam told me to do this and she also has the added element of they were had a relationship they broke up and and you know it's i think that the quotes have come into evidence of things like he wasn't paying enough attention to me he he ordered me around and i think as much as saying that these four were like gary wang was a co-founder of both of both alameda and then ftx nishat singh was the engineer but this was not a an equal four-person relationship sam was clearly sam was the boss um the other ones have even though they've pled guilty they've tried to kind of say i went along and some of them even said both ellison and when were said the the on cross they were asked well why didn't you leave you know if you if it was so bad if you if you knew it was fraud why didn't you leave and basically the answer was we thought it would all fall apart even faster if we left or sam sort of like demanded loyalty like stick with me to the end of the three of the three the the most sort of sort of poignant was nishad singh it seems like he really believed in this ethic i don't know how since they were throwing money around like crazy yes he seemed to believe that the purpose of ftx was to help poor people and somehow in november 2022 he was disabused i i don't

David Friedberg: know if the jury is going to believe that sorry to to no no no i mean it's fascinating what you're describing because that's the dynamic i'm trying to get my head around is the the interpersonal dynamic between them and then of course on a on a on a trial basis here um how they're sort of framing their involvement because they knew that they had built this back door they knew they were taking this money they knew that the cl these were client deposits they're not uh they're admitting to all

SPEAKER_72: of that and they knew that they were doing they were bribing chinese exchanges correct correct no that

SPEAKER_00: there was there was a time where ftx's money got frozen on two chinese platforms and so they wanted to get it out first they tried i guess legitimately with a chinese lawyer that's not really how china works and they had a guy they had a a a staffer inside ftx a a an engineer who said i'll tell you how china works and they ultimately you first using the accounts of thai prostitutes yes this went into evidence that they they stole the identity or bought the identity of thai prostitutes to set up trading accounts to which they could lose in trading as a way to shift money they there doesn't seem to be any dispute that they paid a bribe to an unnamed yet unnamed chinese official and their money was unfrozen

SPEAKER_85: in the middle of this did it in the form of losing a trade in these accounts that were owned by

David Friedberg: prostitutes so that uh somebody who's a regulator if and they didn't have any controls in place but if a regulator did see it it would just look like they made a bad trade this person went long you know

SPEAKER_85: some crypto they went short it and they won the trade yeah yeah they were exactly that was their way

SPEAKER_00: and the the sort of to me the one of the interesting things about it was there was another fdx employee called uh heidi yang anyway her got her she's chinese and her her her father is a chinese government official and they were apparently talking like oh you know china all the officials are corrupt we'll just pay a bribe through the prostitutes and heidi was like no and so there's a there's a signal chat between between sam and this guy called sam trabuco saying heidi's a real like you know she's a she's did she turn us in you know we we need to take her off all the communication channels and she very very quickly left i think she would have been a great a great witness in this trial because that's again again in terms of the jury it's not just showing there's the kind of bloodless there's a lot of balance sheets there's a lot of spreadsheets and then there's like this guy was just he was like screaming at his employees he was a he's now trying to blame carolyn ellison when basically i don't want to say she was a puppet of his but what he told her to do at alameda she did it wasn't she even if you look at her resume she didn't it wasn't like he hired some like huge hedge

SPEAKER_88: fund person i'm not saying you know again i don't it's not to be you know these weren't super

David Friedberg: experienced people and he didn't surround himself with adults who would have kept him in check he hired a bunch of kids peers and he is apparently you know directed them to do this stuff now they also participated so that's going to come in what what has the jury responded most to because you must as

SPEAKER_72: a reporter there sure uh yeah and they're taking notes or they did was there a moment where they gasped or they rolled rolled their eyes what have you seen i think absolutely yeah i think because

SPEAKER_00: there have been other witnesses that have haven't been as kind of shakespearean there's an there's been there was an expert witness there were a couple of investors there was a guy who's a cocoa trader cocoa like chocolate he's a commodities trader in london that said he lost a hundred thousand dollars i have to say the jurors didn't seem that excited about that they very much focused on the three these three cooperating witnesses and there's also a kind of a hype celebrity aspect to this to this whole trial where they got into evidence not just that that that ftx paid more than a hundred million dollars to rename the miami heat uh arena uh and and and for the larry davis david ad and tom brady but also like there's a there's a particular message where after the 2002 uh um super bowl sam wrote to all three of his his his collaborators and said i'm just back from la i went to this super bowl party it was fabulous you know all these hillary clinton was there there's like then the jurors are like looking at this list of like and he's got you know gushing about the people that he was hobnobbing with this was all through this thing called k5 of michael kivas and he was yes yeah he was ready to do a huge investment with them saying like this is that this is a mixture it's an

SPEAKER_28: investment but really is it it's really an investment to sort of get face time with these big names and take ourselves to the next level which by the way is a thing in business you know

David Friedberg: like sure people will make investments uh they will hire endorsers but they'll make investment in companies that give them access to a certain class of people or and so um kivas uh you know got a 700 million dollar investment there was some purchasing of shares i guess uh you know i think from the co-founders of the firm uh but ftx and sam bankman free was doing this in your mind and this is what they kind of portrayed to the jury to try to put a patina of celebrity and excitement around the company

SPEAKER_01: correct no no absolutely and kind of legitimacy to make it like you know people have heard for

SPEAKER_00: example binance and see his big pitch because at the same time that he was doing that he was also there's the jury's been shown footage of his testimony to the house financial services committee and his tweets praising maxine waters and stuff like this he was trying to take and that was i think very it was and again that that that's not fraud that's sort of that's how it works he was trying to take fdx out of the the the morass of crypto platforms even binance is it's a big platform and cz but it has a kind of like he made a big point of saying with its chinese founder they're

SPEAKER_104: never going to get anywhere in washington right i'm you know i'm an american i'm you know hobnobbing with

SPEAKER_00: shack so it was i don't i don't think it would be unfair if the jurors were just like this guy was a

SPEAKER_01: social climber but i think what's amazing about this is that there wasn't there must like you're saying it's a it's a known business thing to make investments to get out they were just from as

SPEAKER_00: best i can make out and this is not from reading or coming into the trial literally from the exhibits

SPEAKER_01: it was just a piggy bank there it literally was and the amounts are are huge they're they were lending each other like 300 million dollars now in some cases this was so they could make an investment four ftx they claim but the amounts there and there was no there's no paperwork they're literally

SPEAKER_00: like you know snap uh signal chatting each other and saying okay 300 for there and then you have this something that i'm very interested in his mother uh barbara freed is a law professor at stanford

SPEAKER_01: very progressive she has a non-profit called mind the gap it was in turn giving money to many progressive

SPEAKER_00: candidates she said things like okay i want a million dollars but do it through nashad singh so it doesn't look like this is just a family affair and that's in writing the jury has seen wow yeah so it's pretty and then and barbara freed is in court every day so some people are joking like is she gonna at the end of this trial are they gonna pull the handcuffs out on and the the father as well joe bankman is a tax lawyer uh also a i believe he's a psychotherapist anyway he's a very put together guy and and he's he's known for like helping with like you know uh easy tax filing for low-income people like he's a he's a self-described progressive and yet he was in the the the signal chats to the last day of how they could like defraud potential investors about the financial condition when i see

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SPEAKER_07: he's got these parents who are stanford law professors who have written papers i believe on ethics and

SPEAKER_72: morality and these are seeming to be you know the elites of our society now elite people know right from wrong they know the law they're literally lawyers and professors so if they were involved in this that certainly means they know right from wrong so they must not only know right from wrong they must

SPEAKER_62: have known that this fraud was going on and they must be culpable right i mean i think i think so i i i

SPEAKER_116: hate to to exactly i mean i think that there must have been a point in time and there's probably still

SPEAKER_00: some percentage of of their selves that are actually idealistic but they they they lost their way i think there's a kind of arrogance i mean i don't know if there was a big there was the new yorker did a piece that i i don't know how to how to take it but sort of explicating their point of view the writer went out and walked around with them it was very criticized that piece because

SPEAKER_119: it felt like it was a little bit soft yeah oh very soft and in fact they without any rebuttal

SPEAKER_01: i think barbara fried said those who question us are like mccarthyites like they can in their mind no sir in their mind it's kind of deranged that that's a direct quote like the idea is that it's

SPEAKER_00: so unfair like their son was a genius and he was there's what we haven't used these two words yet

SPEAKER_65: but effective altruism that that he's explain what that is to the audience and how this became

SPEAKER_00: a rallying cry for them i really i mean i i wanted i want to say like i i've been contacted by

SPEAKER_01: adherence of it and i still i i it's a weird i i guess it's the it's a kind of elitist elitist or quantitative uh philanthropy the idea and i've heard it there was a slow there's a lot of there's a there's a there's a there's a there's a there's a an intersection between sort of vc thinking and

SPEAKER_00: philanthropy of like let's find cutting-edge non-profits that can go to scale i know i've i know those people but effective altruism goes one step further and says we're going to go out and make all kinds of money and then we're going to save the world i guess you could say it's kind of like it's not like you know andrew carnegie carnegie made the money and then did libraries this they're convincing themselves that the reason that they're doing these things is they ended up never doing it like with sam bankman free this there was a big moment where they said the shahd singh said i went to

SPEAKER_01: meet with with anthropic because i was i was going to make a donation because i love that technology so much and then the process then the question was well did you ever make a donation well no you know

David Friedberg: they made an investment that's actually in a way this is the manifestation of what happened with bill gates you know he made this extraordinary fortune and then they signed this giving pledge and so this is like an extension i think it goes back to that giving pledge that warren buffett and bill gates came up with i think where they were involved in and bill gates you know basically after decades of being an extraordinary entrepreneur just decided i'm going to put all of this money to work in a very intelligent fashion this is like the next generation saying hey that's why we're doing it so don't hate us as entrepreneurs we get a pass and so is part of the prosecutions or the defenses um you know theories here and their angle in terms of either getting off or getting convicted this effective altruism how is that playing into the legality of this or the argument that's it's in

SPEAKER_00: in in in pre-trial there's obviously a lot of skirmishes before the trial began and there's it's called motions in lemonade and they sort of decide in advance what can come in and what can't come in we have not heard the word the phrase effective altruism from either side because the judge said it's going to confuse the jury like we've seen the we've seen him funneling alameda money to his brother gabe bankman freed has it has something called uh guarding against pandemics where he

SPEAKER_28: was like you know and this is a big issue for the idea they're saying like i think i want to go back to just say the sort of catchphrase of effective altruism is you could you know become a doctor and

SPEAKER_00: then go and say and work in gaza or in africa and try to sew limbs on or you could just go and like start a crypto platform steal everybody's money and fund 4 000 doctors in africa and isn't that more effective yeah now he never did finding doctors in africa and also you no matter what you're doing with

SPEAKER_01: it you shouldn't steal other people's money it should it wasn't like they were using their personal money and they had quite a bit of it yeah they were literally just like scooping into alameda

SPEAKER_77: and giving it to the brother and nobody knows where did the money go yeah and so that see this is where

David Friedberg: i think their argument breaks down it's probably why the judge said hey listen you want to bring this robin hood stuff in no no bueno let's just talk about the actual actions that happened here and let's just judge this case based on that because yeah i could see it being appealing to uh i'm trying to i want to i want to steel man for a second sure the the the um spf side if they were allowing to talk

SPEAKER_07: about this he says listen i this is what i think the defense is going to be and i want to hear what you think there is hey listen i was hopped up on speed i have adhd i got into this i really had great

David Friedberg: intent and i didn't know what i was doing i didn't have the controls in place i was trying to make as much money as i could and look i made a bunch of bets i thought that was the job i made the best hey these bets worked out i think i'm with this anthropic investment everybody will be whole so yes i should have had controls in place i didn't know what i was doing i should have had governance i had all these

SPEAKER_07: investors they didn't force me to have governance but at the end of the day i was just trying to make sure that you know the children were saved and i had this great money to do that and i you know i

SPEAKER_01: beg your forgiveness is that what they're going to go for it it definitely remains to be seen because so far all we've seen from them are these not not visibly very effective cross-examinations of the

SPEAKER_00: cooperators now last night they put in a filing they have one expert witness a guy called joe pimbley who's going to dispute the size of the line of credit between ftx and alameda i don't think

SPEAKER_28: that's going to go very far many people are saying criminal defendants in federal trials rarely testify because you you open yourself up to like three days of cross-examination and that's when

SPEAKER_00: things like prior statements on all and he has many of them will all come in and they'll ask him about it but i i it does seem like he might testify because it doesn't the feeling is it doesn't it's not a it's not a coin flip um it seems guilty yeah it's not going dead to rights it's not going well

SPEAKER_135: he's going to have to convince and he's also he's got to throw a hell mary yeah and i guess so then

SPEAKER_136: yeah once he was talking mary what would be the defense what do you think i think it's just that

SPEAKER_135: i think he's just he's almost and i what they've tried to show is it's not just bad investments like

SPEAKER_01: it would be one thing if the company failed because let's say they were a hedge fund and they made some bad investments and they and it flamed out that's not illegal that's just bad investments it's the misuse it's the you know the the clearest one is the people that put their money in

SPEAKER_28: and they said i i never authorized them to take my money and give it to gay bankman freeds guardian against pandemics or to give it as a political contribution was stolen literally they stole it

SPEAKER_01: they literally stole it and then they and then they scammed people the whole group to the size of

SPEAKER_00: like eight billion dollars and they misled they also had very third point various investors in the company say if i'd known that there was this back door i would never have invested i still still paradigm did paradigm come in yes yeah absolutely yeah the number the the and there was this guy the last witness of last week was a guy from third point i forget his name sure yeah uh brewer journey and he was describing these meetings in hudson yards and like they the thing is i i you know i don't know from my point of view i feel like they needed to have better due diligence too like

David Friedberg: it wasn't rocket science i think that this is a key point right um you know i know a lot of people i know matt from uh from paradigm and i know some of the people who invested and what happened was just explain to you in the industry um people had come before and invested and there was a very hot market

SPEAKER_72: this company was growing very quickly so people were like oh the other people must have done diligence and they kind of suspended disbelief didn't do due diligence and then there was no board of

David Friedberg: directors and there was no cfo now these are extraordinary red flags for a company that had a 100 million in revenue if you had a hundred million in revenue and you had you know i don't know 50 million dollars invested in your company or 100 million you would certainly want board uh oversight

SPEAKER_72: but i think because this had gotten so big they basically gave him a pass because this was such

David Friedberg: an extraordinary success so it's very bizarre now those people you know in my mind if you didn't do the diligence you deserve to lose your money but of course the people who thought they were buying crypto they don't deserve to lose their money um when we look at the defense do you think there's a chance he will say i was drugged out and i'm mentally ill and i was in a manic state because

SPEAKER_72: he has been very public about his use of these patches and these weird i've never heard of do you think he goes for the i'm i don't want to say insanity but insanity defense yeah i mean they would have

SPEAKER_135: had to kind of give notice of that but i think again once you get in front of the jury you know

SPEAKER_28: there are no these fine legal distinctions between did you give notice of this defense or not they so far the jury hasn't heard it out whenever the jury is out there's been a lot of discussion of adderall could he get you know he's there are many people in the mdc jail in brooklyn that i'm sure could

SPEAKER_01: use it and they're not getting it but you know he has a doctor that they've tried to say the doctor maybe writes too many scripts but they've gotten to the point where initially he was getting adderall in the morning and at night but they're saying in the middle of the day he's not able to focus and participate in his defense so he's he's getting sort of longer slow release adderall now the jury

SPEAKER_00: hasn't heard it yet the jury hasn't heard it yet but you're right that i don't know if it's going to be as as as as uh clear as saying i was crazy but it it i think he thinks he's charismatic i think

SPEAKER_135: he's gonna he's gonna try to create this this this uh kind of kind of dust storm of good just good intentions i was doing the best it's an under regulated field pixie dust you know people some some planes crash and now it might go up again and i'm a victim you know i'm just a sort of an

SPEAKER_00: innovator and again the the the the prosecutors are just going to try to like let's go back to basics i think that their approach to the case is that this is not really about crypto this is not about this is just fraud it's just it's fraud it's just fraud you say to somebody put your money with me and i'm not going to take it out and then you give it to your brother i think that's also their most that's definitely their most effective thing because that it's just it's it it doesn't pass the

SPEAKER_152: smell test when you're funding your family's foundations with somebody else's money all right

SPEAKER_08: we're back with another pitch it to jcal segment brought to you by the fine folks at dot tech domains dot tech domains are giving twist listeners the chance to show off their startup here on this week in startups and all you have to do is go to startups dot tech slash jason to apply but there's one rule you need to have a dot tech domain name to get featured this week we got an amazing pitch from whistle dot tech whistle is a sas platform that consolidates multiple communication apps into one place i need this you ever spend like 20 minutes searching through five different apps trying to find a customer support ticket well that's never going to happen again with whistle dot x suite of unified communication tools head to whistle dot tech to check them out and if you're interested in getting featured on this week in startups get a dot tech domain name and apply at startups dot tech slash jason that's right apply at startups dot tech slash jason let's go back to that jury

David Friedberg: this to me seems like it's a very interesting um you know did they respond strongly uh just before just did they respond strongly to any moments in the trial and then do you know um through the the selection process who the jury is in terms of it's a firefighter it's a secretary what's the composure of this group because i think that will in some ways determine you know how they take some charismatic or i don't know nerdy looking kid and and and deliver their verdict yeah it's it's always i mean

SPEAKER_00: because this is it's the jury pool is drawn from the southern district voter rolls so it's like the five it's not even the five boroughs it's manhattan the bronx and then six counties above it was there were a lot of professional people there were a lot of people that were like lawyers somebody had yeah yeah i mean and and some of them got knocked off and some of them didn't and then you had a very young woman that works as a as a as a you know a checkout in a supermarket she's on the jury so it's a pretty well there's one guy that i you know i i feel bad for him he was he's an alternate but he got through the process and was selected and the next morning he said by the way i'm a i'm a night watchman and they're not letting me out of my job and the judge said you should have told us that earlier because we've let the whole pool go and so this is the one if you've seen some of the coverage has talked about a person sleeping on the jury he's an alternate so it possibly it's it's not necessarily going to give rise to it to an appellate issue there's one i want to jump back to this the the as people may know he was in the bahamas when it when it all fell apart and he stayed there

SPEAKER_28: his his you know these three all left the country and went back to their parents homes and began

SPEAKER_00: very quickly to to get cooperation agreements but he stayed there kind of kind of it's a kind of shakespearean thing walking around in cargo shorts in the in the condo in the condo doing doing doing

SPEAKER_28: doing zooms with all and sundry but then he was arrested by the bahamian authorities they taken into custody and it became i remember this because it was a big we were in the courthouse wondering

SPEAKER_00: when is he going to come is he going to fight extradition he ended up not he ended up consenting to extradition but this is now being used to actually get him out of several of the charges the the bahamian authorities are saying now that he's been extradited he can only be tried in the united states on the charges that were on the table when he was extradited so there have been as they've gone through the electronics and the various files yes they would file a superseding indictment yeah they did they filed one including the chinese bribery charge including the including the campaign finance charges and basically he may be convicted in his first trial on securities fraud wire fraud money laundering and never face the other charges but right now it looks like he and this is

SPEAKER_01: where it gets it may sound like kind of conspiratorial but the the political side doesn't it's not just

SPEAKER_00: that he looks bad the politicians that took the money don't look very good right because they were being proponents of using the ftc the the cftc they were basically doing sam's bidding for the money

SPEAKER_28: which i guess no one is surprised by that's that's washington but we have a political system yeah yeah many of them didn't didn't yeah and there was dark money too like these guys were not they were not just doing this the two thousand five hundred dollars to candidates they were funding like the republican

SPEAKER_00: governor they and there was it was mostly democrat but they have this other guy called ryan salam who he's pled guilty but without a cooperation agreement so that's going to be to me it's interesting like they he may provide them with information but he hasn't testified this is the name that i put a pin

SPEAKER_01: in i'm remaining to go back to it there's a guy called sam trabuco he was a co-ceo of alameda

SPEAKER_00: with carolyn ellison and in the evidence at trial he left before the fall he left seven months before the fall but he's never been charged and he's not a cooperator but in the chinese bribery thing he was absolutely central to it like him and sam were saying like let's do it so he's he's not subject to this bahamian hail mary of knocking out charges he's an american citizen that on evidence

SPEAKER_104: violated the campaign finance laws and the foreign corrupt practices act so it's a it's a mystery

SPEAKER_00: there's a lot of sort of rumors floating around like where's sam trabuco or that maybe doj is deferring it's not clear to me that the justice department has to defer to bahamas on this this is not they've admitted it's not really a legal requirement they're saying it's nice to be nice uh for for for future extraditions from the bahamas we want them to feel comfortable but right and so some people say to me it doesn't really matter if he's convicted of the wire fraud he's going to do a lot of time in jail doesn't matter but to me it does matter like it does the the specifics of the campaign finance charges and and and the chinese bribery these are issues that go well beyond sam breakman free they're like how does it work how does it work and it's it's too convenient i i i personally i go to to to press conferences with the the u.s attorney and i've asked him but you can't get an answer to this question who decided that that to that that these really explosive charges that go beyond just financial chicanery would somehow get swept under the carpet and and i don't that's something that i'm going to continue to pursue wherever the trial ends have they gotten the

SPEAKER_72: money back is that part of this trial have they talked about recouping the money and getting it

SPEAKER_176: back from different places or those who i know those would be separate actions in some cases yeah

SPEAKER_00: there's a big there's a big bankruptcy case in delaware and in fact a lot of the evidence in the case they sort of the ftx debtors or or there's a there's a snapshot that was taken of their their amazon web services full cloud account of everything about ftx on november 6 2022 which seems to be like the day that it all fell apart that the ftd token collapsed and people flew out of the country and and down there those those are the guys that are the parents have actually been sued civilly for the money they took like this guy john ray who's the the bankruptcy sort of trustee he did the same thing in enron he's a fame kind of like try to get all the money back that you can yeah he's filing all kinds of lawsuits against against people trying to claw back i mean i wonder there's other people that got investments like you were saying i don't want to say michael kivas but you know scaramucci there are all these names floating around that took that got money um and and it seems pretty

David Friedberg: methodically they're trying to get to get yeah all the money back it's ill-gotten gains and you spent it at a restaurant or on nix tickets i don't think the nicks have to give that back if you consume something right but if you invested and you have it sitting in your bank account or some amount of it and you traded for shares then the shares are what should be given back but i think they could put pressure on somebody let's say you raised 10 million like there is a um blog uh like a news blog semaphore yeah i think that took 10 million and they committed to giving it back and they found new investors so i guess they just don't want to be involved in this so just give the 10 million back but let's say they had spent it well then you owned equity and so the i guess the people who are

SPEAKER_20: sold and they would get the equity yeah um so i guess that's a negotiation yeah yeah it is and it's

SPEAKER_00: i think a lot of like the the committee to protect journalists a very high-minded group they they got four thousand uh four hundred and ten thousand dollars in crypto from from from ftx or bankman free no one's quite clear and so some months after the flame out they they quietly gave the money back and which is good because otherwise john john ray is coming knocking at the door and i think the parents the parents are they're trying to say that they never knew the house was in their name and it just it

David Friedberg: doesn't it doesn't pass the smell doesn't add up and they were using signal and other services to try to cover their trails but they seem to have gotten some of these signals so does that mean somebody was taking screenshots or recording it what would that's what happened and they've tried the

SPEAKER_82: the prosecutors i don't know if it's if it's fair or not because a lot of these they focused a lot on

SPEAKER_00: on sam bankman free telling you know gary wang nishad singh ellison to all set self-erase you know for four weeks or then that's it got things got hotter it seemed to have shrunken down to one week clearly some of them stopped doing that because the messengers are there but they've tried to sort of show like this and i think they do have a direct quote from sam where they they have a witness saying sam told them let's not do this stuff in writing it's it's it's better regulators are going to come

SPEAKER_133: looking for this and i but i mean that's all that that that doesn't necessarily mean you broke standard

SPEAKER_188: business advice too which is hey we're talking about a legal issue let's not totally play pretend

David Friedberg: we're lawyers and talk about it on slack or i message because then an attorney is going to try to spin that in a case so that that's kind of like general health practices but i was just kind of interested in that you know when you set it on signal i believe it's mutual so if i set it to one week you're automatically set to one week it's kind of like we've agreed on one week so i was wondering if

SPEAKER_110: people did take screenshots i think they found a way yeah these are that's they may not have been very experienced in business but they definitely knew they definitely knew technology and somebody

SPEAKER_194: was definitely probably knew to cover their tracks too what's left in the trial here we've been at this for some number of weeks sure when they do a trial like this they set a number of weeks right they have

SPEAKER_00: a certain amount of time yeah they asked they said they thought it would be four to six weeks um okay and they tell the jurors that too we're we're we're past three weeks and there's been a kind of a hiatus here that judge kaplan had to go to some conference so there was no court last friday and and it's going to restart on thursday on thursday the government is closing its case they they've basically they yeah they're there that's why we now know that trabuco is not being called as a witness they're you know they're there there was also the general counsel a guy called can son he was given he wasn't charged but he was given a non-prosecution agreement he testified and it can't be used against him and his his testimony was basically that he had no idea but that event with his in the final days bankman freed asked him to come up with a justification for the missing eight million dollars and he he told him there really is none but here's some here's some plausible explanations but they're not plausible so his and sam's reaction was like oh i get it which is sort of an admission yeah that i think that that was the purpose of that testimony so basically before lunch on thursday which is when the of this week we're doing this on tuesday they're going to rest their case the the defense has tried to say give us another break they've already had this three-day break but they don't that if they they want another break and judge kaplan said no thursday after lunch you've got to start they might have three weeks to do their side yeah i don't think they'll take even if they it seems they don't have an extensive witness list they wanted six experts they're now down to one expert he probably will go on thursday and then there'll be this magical moment where the judge says mr bankman freed you have an absolute right to testify you they'll do it outside the presence of the jury you have a right to tell you don't have to testify it's your decision it's not your lawyer's decision and when people are i mean these are people that are like deep inside it they're thinking like probably the lawyers almost always lawyers say don't testify because it doesn't end well but this is not ending well either but it's totally his decision he could tell them i'm not going to and in that moment moment you could say i'm ready yeah i'm taking the stand so there's going to be that's like the moment and al gary if he definitely if he says no i i choose not i exercise my fifth amendment right i'm not just fine there's going

SPEAKER_01: to be a lot of disappointed journalists certainly and i think disappointed invest because people i think they do want to know they don't just want to see him flame out but they wanted there there's been a there's been a pretty you know a pretty workman like presentation but there's still something missing just like you said how i mean i myself said when did even in that family when

SPEAKER_00: did it go from kind of arrogant pretentious but ultimately idealistic you know we want to help the poor to like screw the world we're better than everybody and anyone that criticizes it's like mccarthyism when did that happen but at what you know right meal there was a break and i think like this might come out if he's i think you're going to get you're going to get closer not to the truth

SPEAKER_28: but to the the psychological truth of how it happened so i'm i'm hoping that he testifies what do you think

SPEAKER_07: the actual truth is if you had to speculate you know you you're you're a student of this uh you see this every day you study criminals the criminal mind um it's entitlement it's how they were raised

SPEAKER_91: well in this case what what makes this guy tick based on everything you see yeah i think i i i think

SPEAKER_00: that i mean i think he's a very strange character it's not just that he was he was not just homeschooled he was kind of always off on his own he definitely does have some kind of attention deficit he's very smart guy but he's not he's not the world's most social person he's not uh and i think i think i i mean i think his initial you know he he got out of mit he went to work with jane street then he had

SPEAKER_01: this yes this album basically he had this idea of like buying you know buying bitcoin in the us and arbitraging it and selling it in japan and i think i guess i mean i don't want to say that this type this type of like you know it's it's a funny way to invest it's it to me it's one step away from saying like wait a second if i can like find a weakness in the market and exploit it yes let me find it let me find a week exactly but it's hard to then remind yourself you can find it you can find an edge in just what we were talking about trevor milton like the weakness people are going to feel

SPEAKER_00: better investing in nicola if they can think there's a pickup truck than if it's just some abstract

SPEAKER_193: stock and i think it's the same way for an edge yeah you might wind up with edges that are illegal unethical immoral all of those things and then some individuals maybe they it doesn't matter to them

SPEAKER_07: they see through it like he does he i guess maybe he's on the spectrum in some way he doesn't feel empathy for people in a way other people might right yeah and i think in a way it goes this family

SPEAKER_116: background i they think they're better than everybody and it really d despite the idealism there's

SPEAKER_19: this idea that like hey you know it's okay to do this because we have an ultimate our goal is

SPEAKER_135: good nobody the laws are for other people you know and i think i think even even if someone was brought up let's say in a family of people that are like even like a parent had you know served some time

SPEAKER_00: for stock fraud you know there's this legal system and that like you go up to the line and not over it

David Friedberg: or you know this was just outright like whoa we can do it for the law we we might is right we are elitist

SPEAKER_07: we we're stanford we're lawyers yeah we we transcend the law it is absolutely disgusting and you know when you look at this case eight billion dollars stolen is that the number they're claiming here

SPEAKER_220: that's that billion dollars you know if you took every low-level criminal who robbed a a you know

David Friedberg: a grocery store a bodega in new york you know every dime bag sold in washington square park and you added it together over the last 50 years it wouldn't equal a billion i'm going to give you two two i'll

SPEAKER_00: give two two examples last christmas when bankman freed he was initially allowed to be out on bail at his parents house in palo alto which was amazing it was amazing to me like because often they'll say risk of flight and also just the loss amount but he was released and i was covering in the courthouse the case of a guy called his name edwin pozo 19 year old bronx resident that was along with his friends you know fell in and they did a a a somebody else had the gun an armed robbery of a smoke shop no one was shot but it's a it's a federal crime because you know it's a federal crime so he's been in prison since then he was he spent christmas in prison i did like like you know and now he was just sentenced to three years and yesterday here's even on the financial fraud side this this blew my mind there's a guy called adayo iloki he's a man from nigeria real shyster he did ppp fraud paycheck protect you know yeah sure protection program loan but it wasn't it wasn't that he said that he had a business that he didn't which many people have been caught and served time and returned the money he stole people's identity and set up fake businesses and he stole all told about a million dollars he went to trial he was convicted yesterday he got 25 years in prison so one million dollars a million dollars yes 25 years now he's so he's eight thousand times that

SPEAKER_01: yeah i i don't i wouldn't expect yeah i wouldn't i wouldn't be surprised if convicted if he got 15 years i wouldn't i wouldn't be that's sort of like the way most white collar crime works and it's it's weird like what makes this guy loki different i guess it's the the it's the he's sort of at the cusp of white collar and blue collar crime it's like you know there's a lot of identity theft that's

SPEAKER_00: like people you know look there's a there's a spate right now in new york of people stealing checks out

SPEAKER_01: of mailboxes it's an amazing they're all of these and it's a federal case because the postal service is a federal agency these guys are coming down from the bronx with a fishing a fishing line with with duct tape around it with a sticky side out and taking taking envelopes out and then the cops find them and they open them up people are still mailing checks and there's a whole system of like using chemicals to change the name on the check or in some cases they're getting the postal key from guys

SPEAKER_00: it's an incredible it's it's absolutely amazing and and these guys are getting a low sentence but it's it's yeah there's there there's uh i i don't know i don't know what to say except that it's the it's profound it feels profoundly unfair yeah the number is huge and and this is what do you think he

SPEAKER_127: gets if you think 99 what percent is he guilty what do you think he gets i usually don't but that's

SPEAKER_116: right for you also i usually say like you can't know but yeah no i mean i think i think that he i

SPEAKER_28: unless he pulls a rabbit out of that yeah yeah i mean the finding i think he is guilty but i think there's a 95 chance he'll be found guilty that's that's actually in keeping with with 95 of federal inditees end up either pleading guilty or being found guilty so they have a very high batting average but i think in terms of sentencing people are you know talking about 110 years i doubt it very much i

SPEAKER_00: think he will get out he will get out he would if convicted he would get out of jail in his i don't

SPEAKER_46: know 50s 15 years 20 years yeah we're we're you know ai and whatnot will have taken the world by then

SPEAKER_104: i don't know what what fraud he'll find waiting for him but uh you know or whether that yeah there's a guy called martin screlly do you know the the the famous i know martin screlly yeah he did five

SPEAKER_237: years he's been coming to the trial he's been coming to the trial really i talked to him online he follows inner city press and sort of throws comments yeah yeah yeah he i guess he got

SPEAKER_07: convicted of uh fraud for the people who are investing in his investment vehicle to to make drugs i think

SPEAKER_104: that was the the chart he got um but i think he's made himself years yeah he's made him he's made himself into sort of a a white collar crime pundit he's kind of it's it's sort of funny i mean he's

SPEAKER_242: clever yeah yeah it's clever yeah it's like the wolf of wall street guy right like he kind of like

David Friedberg: if you own it and then you have something to say because he did some kind of like a zoom call with sam bankman freedom was giving him advice i never saw that trending on twitter that was actually

SPEAKER_245: fake it was with doh kwan and people cropped in a fake video of sandbag oh it was fake okay

SPEAKER_248: and he was like jail's not that bad he was talking to doh kwan about crying yeah and then they just

SPEAKER_104: listen there are a lot of crypto i just want to say one there beyond this one there's like there

SPEAKER_00: there's uh um you know tornado cash there are all kinds of crypto crypto cases it's turning out to be a big a big a big beat and i initially you know it's it's it's just amazing you never know who's

SPEAKER_104: coming in next and i think there's the guy machinski from celsius he's he's been indicted here he's out on bond and his are these all the southern district of new york they're all the

SPEAKER_07: southern district of new york and it's tell me just briefly because i listen to pre-barara's podcast he seems like a serious like i've met him sure these are seriously principled people

David Friedberg: supposedly show billions the character paul giamatti plays is based on him in some way like a composite

SPEAKER_72: so it's just as we wrap here what what is the nature of the sdny they they're pretty hard

SPEAKER_00: court yeah they're very again they also feel that they're like the the best and the brightest there's a there's a lot of what's interesting is that there's a lot of competition between them and the eastern district where which is in brooklyn and covers they have some great cases over there

SPEAKER_28: they're the ones who did el chapo they actually there's a case that's that's right near the courthouse in manhattan the the illegal chinese uh police station the chinese government opened up a police quote-unquote police station to go after its own dissidents in chinatown but it was brought

SPEAKER_00: by the eastern district so it turns out this is something i want to i cover this one district very closely but it turns out that there's some kind of committee in dc that gives the green light for like who gets the big cases right because there's like everyone wants a piece of it or a russian oligarch you could do it anywhere right but the southern district definitely like throws its

SPEAKER_28: weight around and has become and i think that they they go out of their way to issue press releases

SPEAKER_01: about really they did it they did a a case against a guy from openc nft an nft fraud the guy who front run the market yeah chastain nap chat no yeah fifty thousand dollar loss amount and they they issued press releases they because they were like this is a cutting edge case we're not going to rest on these crypto fraudsters so i think well they've made themselves there's a bunch of cases going on

David Friedberg: right they see themselves as like hey if we come down hard on somebody it's going to protect the you know the the public from future harm so they kind of have this idea that they need to set

SPEAKER_54: examples of people yeah and exactly and i think then i i'm interested i don't want i don't want to

SPEAKER_00: cast aspersions in the sort of personal motivations of the people that go to work at sdny no one stays there forever very few they they might put in eight years and move up from doing crack cases to securities

SPEAKER_135: fraud to you know we are a famously ran and then they cash out to a white to a white shoe law firm usually doing white white collar criminal defense or there's at least five of of you know alumni of

SPEAKER_00: sdny commenting on this commenting on this case and prognosticating one of them interestingly a recent sdny guy called emil beauvais or bove he represented a haitian haitian pastor slash crypto fraudster named eddie alexandre but he's now representing not only miles guo guo wengui the sort of very very uh chinese dissident slash fraudster uh but also trump he's put in a notice of a notice of appearance for trump down in dc so this is this is kind of like like show me what you got for six years at sdny and then your career is set you know and i think that i love it damien williams managing it he's probably like throwing the bone like i'll let you do this case and like i want to keep this guy on for two more years so i'll give him this high profile case i mean they're all i actually i like the what's interesting about that office is that they all began with the smoke shop the smoke shop on robbery and federal judges despite their lewis kaplan is dealing with guys that like you know uh robbed mail and then you know pass uh fail your analysis while they're on probation like 50 of these federal judges time is spent on very concrete things and a lot of them show compassion it's not they're not like this is beneath me yeah get me back into into the highfalutin world it's it's very knowing what you

SPEAKER_07: know do you have faith in our justice system doing what you do every day do you feel good that justice you know in in in my hometown new york do you feel like it's in good hands because we have this like sort of anti uh deep state kind of you know hey it's all rigged that trump's kind of putting out there

SPEAKER_263: you you you trust the justice system you feel like i actually do much more does a good job

SPEAKER_00: you know it's sort of having covered the un and found a lot of corruption and basically my day-to-day reporting job was like debunking things when i came to the courthouse i sort of had the same like i'd find little you know i would be through you know put they'd say we're sealing the courtroom and i'd write a story saying this is outrageous we've got to get you which is i think that's part of

SPEAKER_01: journalism is to like push the envelope but i will it's not just that i've sort of i i it's the and

SPEAKER_00: it's it's the cases that are not the high profile cases it's that it's a judge spending the time to actually like get to know how this defendant has been on probation and either like letting them all i have a lot more confidence than i had when i went in i think and it always kills me people people love to say like as soon as the case is wheeled out oh that's a clinton appointee or this one's a trump appointee and i found honestly that that's there's something to be said for this lifetime tenure because the people really they they're they're almost they're in their own world the judges don't

SPEAKER_01: even talk that much to each other each of them has a staff and has a docket and they're just in most cases here's the main thing most cases in federal court don't have anyone covering them at all like i can't tell you i've become well known in the courthouse because not just for sam bakeman freed and trevor milton but your average case i'm covering a dea there's nobody covering a dea bribery case because everyone's focused on the big cases and so like you know people somebody was killed by fentanyl in a daycare and it's it's just and the judges take them take it seriously that's my my

SPEAKER_00: impression of them here has gone up it's it's a deep kind of moral they're kind of like it's like being i don't want to say they're like they're like monks but they literally are in their own

SPEAKER_266: world sound like jedi knights you know yeah and they really get mentioned in the newspaper they're

SPEAKER_01: like samurai they have a bushido they could go nuts and no one would know i mean the the problem is they have they have almost unlimited discretion it's very hard to win an appeal so if if if they

SPEAKER_00: start going off the rails it's difficult because you can start they could start personally i think that 25 years for the million dollars is bit it's too harsh i don't think i don't think it'll be

SPEAKER_01: reversed on appeal though because the sentencing guidelines allow for that but i i think but i

SPEAKER_135: so i don't who knows maybe maybe that judge had a particular insight that this guy you know commit

SPEAKER_220: very violent crimes and you know they don't get 25 years so it's it's sometimes it's hard as an outsider

SPEAKER_07: to process the the sentencing part but we'll save that for another maybe a week or two or three from now

SPEAKER_272: and matthew it's been awesome you're my kind of guy i don't know did you grow up in new york you seem

SPEAKER_34: like a new york guy to me definitely uh i i i i'm i'm i'm a bronxite but let's put it that way okay i'm a southern district no bronxite i i probably bronx that i'm from brooklyn so all right all right

SPEAKER_60: let's go get a slice all right cool incredible um they have a folks matthew russell lee from inner city press i want you to follow it on x famously known as uh twitter inner city press it's one of the greatest twitter handles x handles you could you could follow but more importantly i want everybody to go to patreon right now and if you enjoy his work and you want to see him do more of it you know toss him a couple bucks and then let's you know buy him a slice you know get him a diet coke whatever he's into all right i love the work and we'll see you all next time in the swing startups