SBF Wants Access to $450 Million in Robinhood Shares in FTX Bankruptcy Proceeding! Opposes Motion To Stay.

Posted: January 6, 2023 | Author: | Filed under: General | Tags: , , , , , , , , , , | Leave a comment

Why?

He needs the money to pay for his criminal defense.

As stated in SBF’s Opposition to Enforce The Stay, “Mr Bankman-Fried requires some of the funds to pay for his criminal defense”.

FTX debtors are asking the Delaware Bankruptcy Court to enforce a stay on 56 million Robinhood shares valued at approximately $450 million. Another words, to stop any act to possess (and potentially liquidate) the shares by anyone or any entity including SBF. Why? To preserve the shares in the event of a bankruptcy judgment to pay the FTX debtor claims.

However, SBF argues the FTX debtors have no legal claim to the Robinhood Shares as the shares are not an asset of Alameda Research or FTX, the named parties in the bankruptcy proceeding. SBF claims the shares are owned by a separate corporation, Emergent Fidelity Technology, which is not a party in the bankruptcy proceeding. SBF is 90% owner of Emergent.

Yet, here’s the rub…turns out, the funds used to purchase the shares came from Alameda Research, SBF’s crypto hedge fund and a party in the bankruptcy proceeding. Alameda is also allegedly involved in defrauding investors and lenders in a multiple count federal fraud indictment just filed last month against SBF in US District Court in New York.

Ah, but….SBF claims, in essence, that although the funds came from Alameda, the funds to purchase the shares actually came from loans made to individuals or entities evidenced by 4 promissory notes held by Alameda.

Loans to whom, you ask…(as stated in SBF’s opposition motion),

$1 Billion to Mr. Sam Bankman-Fried (SBF)

$ 2.3 Billion to Paper Bird, Inc.

$ 543 Million to Mr. Singh

$ 55 Million to Ryan Salame

No doubt, FTX debtors will likely argue the “creative financial structuring” amounts to a fraudulent transfer and the shares are legally owned by Alameda, thus, subject to a stay.

Interesting legal question….Can a defendant access a disputed bankruptcy asset to pay for their criminal defense?

Simply my opinion, What’s your analysis?

Will SBF get access to Robinhood Shares to pay for his criminal defense?

Immunity for Scott Peterson Juror

Posted: February 7, 2022 | Author: | Filed under: crime | Tags: , , , , , | Leave a comment

Today, we learned that Juror #7 from the Scott Peterson murder trial will testify at Peterson’s upcoming hearing for a new trial beginning on February 25th due to possible juror misconduct by Juror #7. Juror #7, Richelle Nice, will be called as the first witness for the defense.

That’s a big deal!

Previously, juror #7 had stated that she would not testify pursuant to her fifth amendment right to remain silent. Why the change? The prosecution advised the court and Peterson’s counsel that she will be given immunity; thus, she will not face criminal prosecution for any potentially false or withheld information during jury selection. Another words, if she failed to disclose information or misrepresented information relating to her ability to be an impartial juror on the juror questionnaire or otherwise, she would not be prosecuted for, say, perjury, for example. If she is given immunity, she will be required to answer the questions asked when she testifies.

She will be represented by her own private counsel at the hearing and will be subject to examination by all the parties, including the judge. Her credibility, like every witness who takes the stand, will be at issue and evaluated by the judge who will decide whether Peterson gets a new trial.

Get ready for DeJa Vu!

We will also likely hear from Peterson’s prior criminal attorney, Mark Geragos, according to Peterson’s attorney. He will likely be asked whether he would have challenged Juror #7 had he known, as alleged, that she had been beaten by her boyfriend while pregnant and been involved in prior litigation which was not disclosed on the juror questionnaire or during voir dire. If true, most attorneys would have challenged Juror #7 given a potential similarity to Laci Peterson to protect Scott Peterson’s right to a fair trial including impartial jurors.

Depending on Juror#7’s testimony, we may also hear from juror #5 as well, who although excused from the murder trial, may have had conversations with Juror #7 relevant to her potential bias, prior experiences, impartiality or lack thereof. The defense has also indicated that in rebuttal, they may call several journalists who interviewed juror #7 to support their claim of juror misconduct.

Both sides have indicated they will be calling several witnesses and submitting many exhibits. The hearing is scheduled to last for 5 days from Feb 25 to March 4th.

Motions for a new trial happen all the time, but, few are based on statements made by a juror many years after conviction that appear to question her ability to be impartial, truthful, and the integrity of the trial process and verdict. Yet, the question remains, does Juror #7 alleged misconduct amount to “prejudicial misconduct”, thus, denying Peterson’s right to a fair trial—-did Peterson have 12 impartial jurors? Criminal cases require 12 jurors to convict a defendant. Otherwise, a conviction can be thrown out and a new trial ordered.

Stay tuned, we may learn more as we have another hearing on Feb 17th regarding further motions and matters.

Simply my opinion, what say you?

Read my interview with KRON4 News San Francisco

Ghislaine Maxwell Possible New Trial?

Posted: January 13, 2022 | Author: | Filed under: crime | Tags: , , , , , , | Leave a comment

Will Ghislaine Maxwell, who was convicted on December 29, 2021 on 5 counts in a sex-trafficking case in New York Federal Court, get a new trial due to alleged juror misconduct?

Yes. possibly, if….

Juror #50 failed to disclose or denied he was a victim of sexual abuse on the juror questionnaire.

Why does that matter?

A defendant has a right to a fair trial by unbiased, impartial jurors pursuant to the 6th Amendment of the US Constitution. Can a juror or jurors, as there are reportedly now 2 jurors, who were victims of sexual abuse be unbiased or impartial in a sexual abuse and trafficking case as the Maxwell trial? Probably not. If it amounts to prejudicial juror misconduct, a new trial for Maxwell may be granted.

But, that’s not my call.

It is Judge Nathan’s call to make upon an evidentiary hearing and upon consideration of the evidence and testimony presented at the hearing. Specifically, for example, how did the juror(s) answer the question on Maxwell juror questionnaire, “Have you, or a friend, or family member ever been the victim of sexual harassment, sexual abuse or sexual assault?” If the juror answered “No”, yet, disclosed sexual abuse in jury deliberation, as alleged by Maxwell’s defense, and reportedly stated by Juror #50, then, it is possibly actionable juror misconduct requiring a mistrial. A juror doesn’t get a pass because they “flew thru” the juror questionnaire, as stated and explained by Juror #50. Yet, untruthful responses on a questionnaire may not be enough for a mistrial. (See Warger v. Shauers 574 US 40 (2014).

When a juror fails to disclose or misstates information on a juror questionnaire, it deprives the attorney’s the opportunity to challenge/remove a juror or further question a juror to ferret out any potential bias that could render a juror lacking impartiality and thus, deny the defendant’s right to an impartial jury and a fair trial.

Keep in mind, it is an objective test not a subjective test. So, even though, a juror may claim their sexual abuse did not influence their verdict, the test is whether a reasonable juror with said experience could be unbiased and impartial.

And, if…. jurors considered evidence not admitted at trial.

If a juror(s) verdict is based upon evidence other than the evidence admitted at trial, a mistrial and a new trial may be warranted. Apparently, juror #50 has stated that he shared his sexual abuse with his fellow jurors during deliberations to assist them in their understanding of the victim’s testimony.

However, in federal court, there is a long-standing federal rule 606 (b) also known as the “no-impeachment rule” that generally prohibits impeachment of verdicts by juror testimony about their deliberations. Judges are usually not allowed to conduct any probing inquiry of jurors’ deliberations, conduct or their mental processes to determine how they achieved their verdict. (See also McDonald v. Pless, 238 US 264 (1914). Another words, juror affidavits, for example, attesting to misconduct in deliberations is usually inadmissible, unless the defendants right to a fair trial has been denied (i.e., racial bias by a juror revealed in deliberations, See Pena-Rodriguez v. Colorado 580 US _(2017)).

Why? Courts want to protect privacy of deliberations & foster candor during deliberations without fear of decision/reasoning becoming public knowledge. Also, courts want to discourage post-trial harassment of jurors and not allow interference with the finality of litigation by encouraging losing litigants to tamper with verdicts.

No doubt, the defense will pursue all avenues for appeal including possible juror misconduct.

If you’d like more law on juror misconduct, please read my prior post on another case involving potential juror misconduct Scott Peterson Re-Trial Likely Says Legal Analyst.

Meanwhile, stay tuned, the defenses motion for a new trial is due January 19 and the prosecution’s reply is due February 2.

Simply my opinion, what say you?

Elizabeth Holmes Possible Sentence: No Slap On The Wrist

Posted: January 13, 2022 | Author: | Filed under: crime, Elizabeth Holmes, Holmes Theranos Trial | Tags: , , , , , , , , , , , | Leave a comment

The sentencing of Elizabeth Holmes, the former CEO of Theranos, a blood-testing company in Silicon Valley, is set for Sep 26 2022 at 130 pm, Judge Davila, San Jose California Federal Court.

On January 3, 2022, Holmes was convicted of one count of conspiracy to defraud investors, and 3 counts of wire fraud, Each count carries up to 20 years in prison, a $250,000 fine, 3 years supervised release by probation, and likely victim (investor) restitution in the amount of $144 million dollars.

Why the sentencing “delay”? Here are 2 reasons….

Post-trial motions: Defendants, typically, file motions after the trial to challenge the verdict and to preserve issues for appeal. The judge has set a motions hearing for June 16, 2022 at 9 am regarding 3 potential motions raised by the Defense: Rule 29 motion for judgment of acquittal (substantial evidence of guilt or not), Rule 33 motion for a new trial (interest of justice requires vacate verdict) and Rule 34 motion to arrest of judgment (substantial defect in indictment i.e. indictment does not include all elements or court lacks jurisdiction, etc. this motion is seldom used and rarely granted). We will have a better idea of the defenses’ basis/arguments and the prosecutions response when their briefs are filed/due March 4 and April 29th, respectively, with Defenses reply brief due May 27.

Balwani’s Trial upcoming, reportedly, mid-March? (judge’s calendar indicates Feb 15th start for trial)
There may be evidence presented in Balwanis case that may impact Holmes sentencing as they are alleged co-conspirators in a scheme to defraud investors, patients and commit wire fraud.  

What’s the potential sentence for Holmes?

Federal sentencing is based upon sentencing guidelines established in the United States Sentencing Commission Guidelines Manual (aka “sentencing guidelines”). The guidelines establish sentencing ranges for crimes as an attempt to establish uniformity/consistency of sentencing across the federal courts. As of 2005, the guidelines are advisory not mandatory, and the sentence is up to the trial judge. 

So, assuming I did the math correctly, Holmes sentencing range is 108 months (offense level 31) to 210 months (offense level 35), that’s potentially 9 to 17.5 years in prison. Fraud is base offense level 7 plus 24-28 levels depending on aggravating/mitigating factors like the amount of loss, abuse of position of trust, aggravating/leadership role, cooperating with government, etc. Here’s the link to the guidelines USSC Guidelines. 

Sentencing time will be increased incrementally due to conviction on multiple counts rather than consecutive sentences. 

Although sentencing is up to Judge Davila, the sentence also rests in the hands of Holmes. Right now, she can take actions to reduce/mitigate her prison time. Specifically, here are 3 ways…

1. Flip on Balwani and cooperate with the government to help them with their case against Balwani,
2. Waive her appeal upon an agreement with the prosecution to recommend a shorter sentence,  
3. Accept responsibility for crimes 

Btw, her new mom status or even a pregnancy is not technically a mitigating factor. Holmes is also not technically eligible for probation or a mix of home detention and prison time due to her high offense level.

Fyi, based on 3 similar fraud cases at or near Holmes offense level, Judge Davila sentenced the fraudsters to 97, 108, and 140 months. Holmes will likely face a longer sentence as the amount of loss in her case, approximately 144M far exceeds the 7 million, 9.9 million and 48 million, respectively, defrauded by other defendants. However, based upon a review of 8 recent fraud cases sentenced by Judge Davila, the sentences were 30% less on average, than the sentencing range in the sentencing guidelines. In short, assuming Holmes loses her appeal, she could face a prison sentence of 76 months (108 x 30% reduction) to 147 months (210 x 30% reduction) or 6.3 to 12.25 years in prison. Keep in mind, this is just a sentencing estimate as there are many moving parts in sentencing including the sentencing recommendations by the probation department, the government and information yet unknown to be discovered in the pre-sentence report, at the sentencing hearing in September and in Balwani’s trial.

Contrary to some public sentiment, Holmes sentence will not be a slap on the wrist. Additionally, as she faces a longer sentence, she will also likely await the outcome of her appeal in prison rather than out on bond. Her defense team will undoubtedly pursue all possible avenues to minimize her sentence.

And….lastly, since Holmes has been convicted, she will be required to forfeit any assets traceable to the fraud proceeeds including any commingled assets. Curious, what property will secure her 500k bond? 

Simply, my opinion, what say you?

Available for Legal Analyst services including media interviews, trial/legal commentary, or inquiries.

Watch my legal analysis on NBC Nightly News, CBS Evening News, KPIX CBS San Francisco , KTVU FOX News and, Sky News Australia.

Elizabeth Holmes Trial: Jury Deliberation Time May Favor Defense

Posted: December 27, 2021 | Author: | Filed under: crime, Elizabeth Holmes | Tags: , , , | Leave a comment

It’s Monday December 27, 2021 Day 4 of jury deliberations. Twenty-five hours have passed and the jury in the USA v. Elizabeth Holmes trial is still deliberating over a verdict.

What’s going on?

Like most jurors, they are diligently and methodically going over the evidence, the jury instructions and the verdict forms. My first clue…they asked to take the jury instructions home on day 2 of deliberations and day 3 they asked to re-hear the investor call between Holmes and investors, specifically, as to count 5 of the indictment, the $4.8M investment from Bryan Tolbert. Did she make false statements to obtain investor money, otherwise, known as, wire fraud?

My guess, they are going thru the counts in order…and, 11 counts takes time. And, they may have set aside the 2 conspiracy counts for last. Especially, in this case, if they find that Balwani may have controlled Holmes, as alleged by Holmes, the jury may find that she was unable to voluntarily agree to conspire or defraud. Moreover, jurors can get confused too or delayed initially as to the elements or the “object” of a conspiracy.

Keep in mind, the jury has heard from 32 witnesses including 7 days of testimony from Holmes and many exhibits from audio clips of Holmes speaking to investors, Holmes interviews on Mad Money and the Today Show, powerpoint presentation materials, lab reports, numerous emails and texts to financial spreadsheets.

Patience, my guess, we will likely get a verdict this week. If we don’t, time favors the defense. Typically, the longer a jury is out (in deliberation) or the more jury questions asked, the more likely it favors Holmes with an acquittal or a compromised verdict, guilty on some counts and not guilty on others.

Simply my opinion, what say you?

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