Prosecutors in SBF trial evaluate protection argument to ‘Dumb and Dumber’

Prosecutors within the legal trial in opposition to FTX founder Sam Bankman-Fried in contrast one of many protection’s arguments to a scene within the 1994 movie “Dumb and Dumber,” during which actor Jim Carrey says IOUs are “pretty much as good as cash.”

In a written temporary on Thursday to Choose Lewis Kaplan, who’s presiding over the Manhattan trial, assistant U.S. attorneys for the Southern District of New York took challenge with a number of of the jury directions offered by the protection crew.

One particular directive reminded prosecutors of the 29-year-old comedy about two less-than-intelligent buddies (performed by Carrey and Jeff Daniels) who take a cross-country journey to Colorado to return a briefcase full of cash to its proprietor, although the money had really been left as ransom.

“In case you discover that FTX clients, after depositing funds with FTX, obtained a credit score to transact on the FTX alternate and due to this fact obtained the precise to withdraw an equal quantity of funds at a later time upon request, that’s inadequate to determine that they have been disadvantaged of property,” the jury instruction from the protection says.

A lot of the federal government’s case hinges on billions of {dollars} that FTX, Bankman-Fried’s crypto alternate, siphoned out of buyer accounts and used largely to attempt to cowl up losses at sister hedge fund Alameda Analysis after cryptocurrency costs plunged. Funds additionally allegedly went to paying for issues like a $35 million property within the Bahamas and political donations.

Clients have been finally unable to retrieve a lot of their cash as FTX and Alameda have been concurrently imploding.

The protection, in accordance with prosecutors, is attempting to make the declare to the jury that shoppers nonetheless had a credit score to the funds they deposited even when the cash wasn’t there as a result of it was getting used for different issues. Prosecutors say the argument is “untethered to the details of the case” and {that a} “credit score to acquire funds at a later date, if such funds are finally obtainable, is clearly not the identical, or as invaluable, as the cash or property itself.”

In a footnote, the prosecution writes, “A preferred film from the Nineteen Nineties illustrates the purpose: a briefcase, as soon as crammed with cash, shouldn’t be the identical as a briefcase later crammed with IOUs.” In “Dumb and Dumber,” when the briefcase reaches its proprietor, it is crammed with paper.

“That is pretty much as good as cash, sir,” says Carrey, enjoying the character Lloyd Christmas.

Mark Cohen, Bankman-Fried’s lead protection lawyer, did not instantly reply to a request for remark.

Bankman-Fried, 31, faces seven legal fraud expenses tied to the collapse of his crypto empire late final 12 months. Bankman-Fried, who has pleaded not responsible, might face life in jail if convicted.

The primary three weeks of the trial have been highlighted by testimony from Bankman-Fried’s former shut buddies, who have been additionally high execs at FTX and Alameda and have since turned on him, some by means of plea offers with the federal government. The trial is scheduled to renew late subsequent week and prolong into November.

On quite a few events, Choose Kaplan has known as sidebar conferences with the lead authorities attorneys and Bankman-Fried’s legal professionals, to debate their demeanor within the courtroom. Most not too long ago, on Thursday, Kaplan ripped into legal professionals from either side, specifically telling the prosecution that their newest knowledgeable witnesses knew nothing particular about necessary particulars and but known as Bankman-Fried’s conduct legal. Each side have been warned to do higher and to speak extra with one another.

— CNBC’s Kate Rooney and Daybreak Giel contributed to this report

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