FTX co-founder Sam Bankman-Fried was taken into custody after a federal judge revoked his bail less than two months before his scheduled fraud trial.
US District Judge Lewis A. Kaplan made the order at a hearing in Manhattan Friday afternoon. Bankman-Fried took off his jacket and tie, and was immediately placed in handcuffs as marshals escorted him out of the courtroom. His mother, who was also present, cried in the public gallery.
Prosecutors had asked the judge to revoke Bankman-Fried’s $250 million bail package after accusing him of leaking documents in an attempt to discredit Caroline Ellison, the former chief executive officer of Alameda Research, who will likely be a key government witness.
A gag order is not “a workable solution longer term particularly with someone who has shown a willingness and a desire to risk crossing the line in an effort to get right up to it no matter where the line is,” Kaplan said.
Bankman-Fried’s lawyer, Mark Cohen, said he would appeal the judge’s ruling and asked for a stay on the decision, which Kaplan denied.
It wasn’t immediately clear which jail Bankman-Fried would be taken to from the courthouse. Although the most likely scenario is the Metropolitan Detention Center in Brooklyn, the only federal facility in New York City.
Judge Kaplan found there was probable cause to believe that Bankman-Fried has attempted to tamper with witnesses at least twice while on bail.
Bankman-Fried’s lawyers had fought efforts to revoke the bail, stating he was exercising his first amendment rights in talking to a New York Times journalist.
‘Two Guys’
When Cohen argued that his client didn’t intend to tamper with witnesses, Kaplan asked him about a scenario where “two guys walk into a store and say to somebody this is an awful nice store and it would be a shame if it burned to the ground.”
Bankman-Fried has been under house arrest at his parent’s home in Palo Alto, California, since last December. He has pleaded not guilty to all the charges against him.
Referring to the case as one of the largest financial frauds in American history, prosecutors have accused Bankman-Fried of orchestrating a yearslong fraud at FTX and misusing billions in customer funds.
Read more: Ex-FTX Executive Salame Talking to Prosecutors About Plea Deal
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Author: Chris Dolmetsch and Ava Benny-Morrison
