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Tag: Collusion

  • JPMorgan Chase blasts U.S. Virgin Islands as ‘complicit’ in Jeffrey Epstein sex trafficking

    JPMorgan Chase blasts U.S. Virgin Islands as ‘complicit’ in Jeffrey Epstein sex trafficking

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    Albert Bryan Jr., governor of the U.S. Virgin Islands, speaks during the SelectUSA Investment Summit in National Harbor, Maryland, on May 2, 2023.

    Ting Shen | Bloomberg | Getty Images

    JPMorgan Chase in a court filing Tuesday called the U.S. Virgin Islands “complicit in the crimes of Jeffrey Epstein,” saying the sex predator gave high-ranking officials there money, advice and favors in exchange for looking the other way when he trafficked young women to be abused on his island getaway.

    “For two decades, and for long after JPMC exited Epstein as a client, the entity that most directly failed to protect public safety and most actively facilitated and benefited from Epstein’s continued criminal activity was the plaintiff in this case — the USVI government itself,” the bank said in the Manhattan federal court filing.

    “Rather than stop him, they helped him,” JPMorgan said, citing millions of dollars in tax incentives and other benefits the territory gave Epstein.

    That claim comes as JPMorgan defends itself against a civil lawsuit by the Virgin Islands, which alleges that the bank knowingly enabled Epstein’s sex trafficking and benefited from it when he was a customer from 1998 through 2013.

    A spokesman for theVirgin Islands’ attorney general’s office told CNBC on Tuesday, “JPMorgan Chase facilitated Jeffrey Epstein’s abuse, and should be held accountable for violating the law.”

    “This is an obvious attempt to shift blame away from JPMorgan Chase, which had a legal responsibility to report the evidence in its possession of Epstein’s human trafficking, and failed to do so,” the spokesman said.

    The bank’s filing Tuesday asked Judge Jed Rakoff to deny a motion by the Virgin Islands that would preclude JPMorgan from raising certain so-called affirmative defenses to the lawsuit.

    “USVI’s motion seeks to strike only those specific defenses that threaten to expose its relationship with Epstein,” the filing said.

    In a footnote, the filing said the Virgin Islands had three governors over the past 16 years: John de Jongh, Kenneth Mapp and current governor Albert Bryan Jr.

    “As detailed herein, Epstein had close ties to each of them,” that footnote said.

    Earlier Tuesday, another court filing for the first time revealed that Bryan is scheduled to be deposed June 6 for the lawsuit. A source familiar with the situation told CNBC that JPMorgan requested the deposition of Bryan, who has been governor since 2019.

    JPMorgan CEO Jamie Dimon is scheduled to be deposed in the suit Friday in New York.

    Rakoff last week authorized the Virgin Islands to serve a subpoena for Tesla CEO Elon Musk on his electric car company, seeking documents that Musk may have showing any communications involving him, Epstein and JPMorgan.

    That subpoena is based on suspicion by the territory that Epstein may have referred Musk or tried to refer him to the bank as a client.

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    Epstein, a former friend of Donald Trump and Bill Clinton, maintained a home on a private island in the territory where he sexually abused many young women over the years. He used money from his JPMorgan accounts to pay women and fly them there.

    In its filing Tuesday, JPMorgan noted that when Epstein was released from a Florida jail after pleading guilty to procuring a minor for sex, he tried to arrange for his parole to be transferred from that state to the Virgin Islands, where he registered as a sex offender. He also maintained his primary residence in the territory, which “put him under USVI law enforcement’s direct jurisdiction and supervision,” the filing said.

    The bank alleges there was a “decades-long quid pro quo between Epstein and the USVI government” that took three forms.

    “First, high-ranking USVI officials spent years courting and gladly accepting Epstein’s influence in the form of gifts, favors, and political donations,” the filing said.

    “Second, in exchange, USVI granted Epstein preferential treatment in the form of more than $ [amount redacted] million in tax incentives, among other benefits. Third, and most troublingly, USVI protected Epstein, fostering the perfect conditions for Epstein’s criminal conduct to continue undetected.”

    Specifically, the filing says Epstein supported the candidacy of Stacey Plaskett, the Virgin Islands delegate to the U.S. House of Representatives, after she worked for the USVI Economic Development Authority, which awarded Epstein “massive tax benefits.” Plaskett had also worked at a law firm that represented him in business affairs, the filing says.

    Epstein and his employees donated more than $30,000 to Plaskett’s congressional races, according to the bank.

    The filing said that Epstein’s “primary conduit for spreading money and influence through” Virgin Islands government was then-first lady Cecile de Jongh, the wife of former Gov. de Jongh, who served from 2007 through 2015.

    And “despite her public role and official duties, First Lady de Jongh managed Epstein’s USVI-based companies … receiving from Epstein a salary, bonuses and other benefits,” the filing said.

    Jeffrey Epstein’s former home on the island of Little St. James in the U.S. Virgin Islands.

    Emily Michot | Miami Herald | Getty Images

    Much of the details of the claims related to Cecile de Jongh are redacted in the filing, but in one section the bank says that in addition to working for his companies she “extensively lobbied on his behalf with government officials, including the governor.”

    In another heavily redacted section, the filing says the Virgin Islands “aided Epstein’s criminal activity.” The specific allegations as to how the government did that is blacked out.

    Almost completely redacted is a section of the filing entitled, “Epstein exerted influence over USVI sex offender legislation and received lax monitoring.” In one unredacted section, the bank’s lawyers wrote, “While the USVI did conduct site visits of Epstein’s residences, those inspections were cursory at best.”

    “Despite the direct infusions of lucrative tax incentives, [redacted] and lax enforcement, Epstein still could not freely transport and exploit young women without assistance from USVI government officials,” the filing said.

    “In exchange for Epstein’s cash and gifts, USVI made life easy for him,” the filing said. “The government mitigated any burdens from his sex offender status. And it made sure that no one asked too many questions about his transport and keeping of young girls on his island.”

    The lawsuit against JPMorgan was filed in late December by then-Virgin Islands Attorney General Denise George, who a month earlier had obtained a $105 million settlement from Epstein’s estate. Days after she filed that suit, Bryan fired George, who had been attorney general for four years.

    The governor fired George reportedly because she failed to alert him that she planned to sue JPMorgan, which is the largest bank in the United States.

    Despite George’s firing, the Virgin Islands has continued to aggressively pursue its litigation against the bank.

    On Tuesday, there was another in a series of private telephone conferences with Rakoff over the case.

    A public docket entry summarized the outcome of that conference, which included lawyers for the Virgin Islands, JPMorgan, former JPMorgan executive Jes Staley and an Epstein accuser who has a separate, similar lawsuit pending against the bank. JPMorgan is trying to shift any legal liability it may have in the suit to Staley, who was a point of contact for Epstein at the bank.

    “The deposition of Albert Bryan, Jr. is ordered to proceed on June 6,” that docket entry says.

    The entry also says that “all parties other than JP Morgan are ordered to contact former officers and directors of JP Morgan only through counsel.”

    CNBC requested comment from lawyers for the Virgin Islands and from JPMorgan about the conference Tuesday.

    Charges against Jeffrey Epstein were announced on July 8, 2019 in New York City. Epstein will be charged with one count of sex trafficking of minors and one count of conspiracy to engage in sex trafficking of minors.

    Stephanie Keith | Getty Images News | Getty Images

    Epstein, 66, died by suicide in a Manhattan jail in August 2019, a month after he was arrested and charged in Manhattan federal court with child sex trafficking.

    Epstein pleaded guilty in 2008 to a Florida state charge of soliciting sex from an underage girl and was sentenced to 13 months in jail.

    His prior criminal case and stint in jail, which were known to JPMorgan at the time, came in the middle of his tenure as a customer of the bank, where he maintained accounts from 1998 until the bank severed its relationship with him in 2013.

    Epstein became a customer of Deutsche Bank after that.

    Deutsche Bank last week agreed to settle a Manhattan federal court lawsuit filed by another Epstein accuser who alleged that bank enabled and benefited from his sex trafficking. Deutsche Bank will pay Epstein victims $75 million in that deal.

    Deutsche Bank in 2020 agreed to pay a $150 million fine to New York’s financial regulator for its dealings with Epstein and other issues.

    “We acknowledge our error onboarding Epstein in 2013, and the weaknesses in our processes, and have learnt from our mistakes and our shortcomings,” bank spokesman Dylan Riddle said last week.

    — CNBC’s Eamon Javers contributed to this report.

    Correction: Some previous headlines for this story were updated to reflect the correct spelling of Jeffrey Epstein’s name.

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  • Deutsche Bank agrees to pay $75 million to Jeffrey Epstein victims to settle lawsuit

    Deutsche Bank agrees to pay $75 million to Jeffrey Epstein victims to settle lawsuit

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    Jonathan Raa | Nurphoto | Getty Images

    Deutsche Bank agreed to pay $75 million to victims of sex predator Jeffrey Epstein to settle a federal lawsuit accusing the bank of enabling and benefitting from its customer’s sex trafficking of young women, sources told CNBC on Wednesday night.

    The bombshell deal still leaves JPMorgan Chase to defend its own would-be class action lawsuit by Epstein accusers in U.S. District Court in Manhattan, which involves similar allegations.

    JPMorgan CEO Jamie Dimon, who has said the bank is not liable for sex trafficking by its former long-time customer Epstein, is due to be deposed in that suit, and a related one by the government of the U.S. Virgin Islands on May 26.

    The settlement agreement by Deutsche Bank, which will set aside $75 million for Epstein accusers, was first reported by The Wall Street Journal.

    Under the deal, victims of Epstein who were affected by his sex trafficking during the time when he was a customer of Deutsche Bank, from 2013 through 2018, would receive at least $75,000 and up to $5 million depending on an evaluation of their claims.

    Deutsche Bank spokesman Dylan Riddle would not comment on the deal, but noted that his bank has spent more than 4 billion euros [$4.34 billion] to strengthen internal financial controls.

    “In recent years Deutsche Bank has made considerable progress in remedying a number of past issues,” Riddle said. 

    He noted that in 2020, when the bank agreed to pay a $150 million fine to New York’s financial regulator for its dealings with Epstein and other issues, Deutsche Bank had said, “We acknowledge our error onboarding Epstein in 2013, and the weaknesses in our processes, and have learnt from our mistakes and our shortcomings.”

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    The two law firms representing the accusers, Edwards Pottinger and Boies Schiller Flexner, in a joint statement obtained by CNBC said: “This groundbreaking settlement is the culmination of two law firms conducting more than a decade-long investigation to hold one of Epstein’s financial banking partners responsible for the role it played in facilitating his trafficking organization.”

    The suit, which was seeking class-action status, was filed in November by a woman using the pseudonym Jane Doe. She alleged Deutsche Bank knowingly participated in and financially benefited from participating in Epstein’s sex trafficking “by providing the requisite financial support for the continued operation” of that scheme.

    “Deutsche Bank also knew that Epstein would use means of force, threats of force, fraud, abuse of legal process, exploitation of power disparity, and a variety of other forms of coercion to cause young women and girls to engage in commercial sex acts,” the suit says.

    “Knowing that they would earn millions of dollars from facilitating Epstein’s sex trafficking, and from its relationship with Epstein, Deutsche Bank chose profit over following the law,” the suit said. “Specifically, Deutsche Bank chose facilitating a sex trafficking operation in order to churn profits.”

    A video still from the NBC archive showing Donald Trump talking with Jeffrey Epstein at a party in Mar-A-Lago from 1992.

    NBC

    Epstein, who had been a customer of JPMorgan from 1998 through 2013, became a customer of Deutsche Bank after JPMorgan ended its banking relationship with him.

    “Deutsche Bank picked up exactly where JPMorgan left off and became the bank that Epstein needed to fund his sexual abuse and sex-trafficking operation,” the suit says.

    Epstein killed himself in a Manhattan federal jail in August 2019, a month after being arrested on federal child sex trafficking charges.

    His arrest in that case came 10 years after he served a jail sentence or more than a year for pleading guilty in Florida state court to soliciting sex for money from an underage girl. That 2008 guilty plea was widely publicized.

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  • Elon Musk subpoena in Epstein-JPMorgan lawsuit can be served to Tesla, judge rules

    Elon Musk subpoena in Epstein-JPMorgan lawsuit can be served to Tesla, judge rules

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    Ghislaine Maxwell and Elon Musk attend the 2014 Vanity Fair Oscar Party Hosted By Graydon Carter on March 2, 2014 in West Hollywood, California.

    Kevin Mazur | vf14 | Wireimage | Getty Images

    A federal judge ruled Wednesday that the U.S. Virgin Islands can serve a subpoena for Elon Musk to his electric car company Tesla, as part of the government’s lawsuit against JPMorgan Chase over the bank’s ties to dead sexual trafficker Jeffrey Epstein.

    The ruling came days after lawyers for the USVI government told Judge Jed Rakoff they had been unable to serve the Tesla CEO personally with the subpoena demanding documents related to Epstein and JPMorgan.

    The Virgin Islands is suing JPMorgan in U.S. District Court in Manhattan for allegedly enabling and financially benefiting from Epstein’s sex trafficking of young women. The late financier and sex criminal had been a customer of the bank from 1998 through 2013. JPMorgan denies any wrongdoing.

    On April 28, the USVI issued a subpoena to Musk because of suspicion that Epstein “may have referred or attempted to refer” Musk as a client to JPMorgan, according to a court filing Monday.

    That subpoena demands that Musk turn over any documents showing communication involving him, JPMorgan and Epstein, as well as “all Documents reflecting or regarding Epstein’s involvement in human trafficking and/or his procurement of girls or women for consensual sex.”

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    The USVI said in a court filing Monday that an investigative firm it had retained had been unable to locate Musk to serve him in person with the subpoena, as is the norm.

    The filing also said that a lawyer for Musk did not reply to a request that the attorney accept the subpoena for his client.

    Rakoff, in his order Wednesday, authorized the USVI to “arrange alternative service of its Subpoena to Produce Documents by serving Elon Musk via service upon Tesla Inc.’s registered agent.”

    Musk didn’t immediately respond to a request for comment.

    The USVI also has issued similar subpoenas for documents related to Epstein and JPMorgan to Google co-founders Larry Page and Sergey Brin, former Disney executive Michael Ovitz, Hyatt Hotels executive chairman Thomas Pritzker and Mort Zuckerman, the billionaire real estate investor.

    JPMorgan CEO Jamie Dimon is scheduled to be deposed on May 26 for the lawsuit and for a related suit against the bank by a woman who says Epstein sexually abused her.

    Muks in a tweet Monday night had blasted the idea of that he be given a subpoena in the case.

    “This is idiotic on so many levels,” Musk wrote on Twitter, which he bought and took private last year.

    “That cretin never advised me on anything whatsoever,” he wrote, referring to Epstein.

    “The notion that I would need or listen to financial advice from a dumb crook is absurd,” Musk added. “JPM let Tesla down ten years ago, despite having Tesla’s global commercial banking business, which we then withdrew. I have never forgiven them.”

    In 2018, Epstein told The New York Times he had been advising Musk after the Securities and Exchange Commission opened a probe into Musk’s comments about taking Tesla private. A Tesla spokesperson told The Times, “It is incorrect to say that Epstein ever advised Elon on anything.”

    Epstein killed himself in August 2019, a month after federal authorities arrested him on an indictment charging him with child sex trafficking. He had previously pleaded guilty in 2008 to a Florida state charge of soliciting sex from an underage girl.

    Before his fall from grace, Epstein and his former girlfriend Ghislaine Maxwell, socialized with many rich and powerful people, among them former presidents Donald Trump and Bill Clinton, as well as Britain’s Prince Andrew, the brother of King Charles III.

    Maxwell, a British socialite, was convicted in late 2021 in federal court in Manhattan of procuring underage girls to be sexually abused by Epstein. Maxwell was sentenced in June 2022 to 20 years in prison.

    Musk in July 2020 replied to a Twitter post that showed him posing for a photo next to a smiling Maxwell.

    “Don’t know Ghislaine at all,” Musk wrote. “She photobombed me once at a Vanity Fair party several years ago. Real question is why VF invited her in the first place.”

    The New York Times, in a 2022 article detailing that photo, reported that a Vanity Fair staff member who had stood next to both Maxwell and Musk at the party said that “the pair chatted.”

    “Ms. Maxwell asked Mr. Musk if there were a way to remove oneself from the internet and encouraged Mr. Musk to destroy the internet; Mr. Musk demurred,” The Times reported, citing the staffer, who shared contemporaneous notes of the encounter.

    “Ms. Maxwell then asked Mr. Musk why aliens hadn’t yet made contact with humanity, to which Mr. Musk replied that all civilizations eventually end — including Maxwell’s hypothetical alien one — and raised the possibility that humans are living in a simulation.”

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  • Trump barred from making evidence public in Stormy Daniels hush money case

    Trump barred from making evidence public in Stormy Daniels hush money case

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    Former President Donald Trump boards his airplane after speaking at a campaign event in Manchester, New Hampshire, April 27, 2023.

    Jabin Botsford | The Washington Post | Getty Images

    A judge Monday barred former President Donald Trump from making public evidence and other material related to a pending criminal case against him in New York, where he is charged with falsifying business records related to a 2016 hush money payment to porn star Stormy Daniels.

    Judge Juan Merchan also barred Trump from viewing evidence in the case other than in the presence of his lawyers. The ex-president is not allowed to copy the material.

    The Manhattan District Attorney’s Office sought the protective order due to concerns Trump would “inappropriately” use the material or post the information on social media or elsewhere.

    A prosecutor at a hearing last week in Manhattan Supreme Court called that risk “substantial.”

    Trump’s lawyers opposed that request, which relates to so-called discovery material, the documents, correspondence and other items exchanged between opposing parties in a legal case before trial.

    Trump, who is the leading contender for the 2024 Republican presidential nomination, was arraigned in court last month in the case. He has pleaded not guilty.

    His former lawyer, Michael Cohen, shortly before the 2016 presidential election paid Daniels, whose legal name is Stephanie Clifford, $130,000 to keep her quiet about an alleged sexual tryst with Trump years earlier.

    Trump denies having sex with Daniels, but reimbursed Cohen for the payoff, which was claimed to be for legal expenses in business records.

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    In the prosecution’s motion for a protective order, assistant DA Catherine McCaw wrote, “Donald J. Trump has a longstanding and perhaps singular history of attacking witnesses, investigators, prosecutors, trial jurors, grand jurors, judges, and others involved in legal proceedings against him, putting those individuals and their families at considerable safety risk.”

    Merchan, in his order Monday, wrote all material provided by the DA’s office to Trump’s lawyers “shall be used solely for the purposes of preparing a defense in this matter.”

    “Any person who receives the Covered Materials shall not copy, disseminate, or disclose the Covered Materials, in any form or by any means, to any third party,” which includes posting the material on social media sites, Merchan wrote.

    The judge also said the names and identifying information of DA employees in the case, other than sworn members of law enforcement, assistant DAs and expert witnesses, would be delayed until the start of jury selection.

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  • Billionaire Stephen Deckoff buys Jeffrey Epstein’s private islands

    Billionaire Stephen Deckoff buys Jeffrey Epstein’s private islands

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    Little St. James Island, one of the properties of financier Jeffrey Epstein, is seen in an aerial view near Charlotte Amalie, St. Thomas, U.S. Virgin Islands July 21, 2019.

    Marco Bello | Reuters

    An investment firm led by the billionaire Stephen Deckoff has bought two private islands in the U.S Virgin Islands previously owned by the late notorious sex criminal Jeffrey Epstein, Deckoff confirmed to CNBC on Wednesday.

    Forbes first reported that Deckoff, the founder of the private equity firm Black Diamond Capital Management, purchased the two islands for $60 million, less than half of their initial asking price.

    One of the islands was used by Epstein to sexually abuse young women for years, according to court filings.

    “Mr. Deckoff plans to develop a state-of-the-art, five-star, world-class luxury 25-room resort that will help bolster tourism, create jobs, and spur economic development in the region, while respecting and preserving the important environment of the islands,” according to a press release about the sale.

    SD Investments, which is led by Deckoff, announced the purchase.

    “A significant portion of the sale proceeds are being paid to the Government of the U.S. Virgin Islands under a previously announced settlement agreement between the government and Mr. Epstein’s estate,” the release said.

    Epstein’s estate and related entities in November agreed to pay the government of the Virgin Islands more than $105 million to settle claims of sex trafficking and child exploitation. That deal required the estate to pay the Virgin Islands half of the proceeds of the sale of the islands, Little St. James and Great St. James, and another $450,000 to address damages on Great St. James, where Epstein had razed the remnants of structures that were hundreds of years told to make room for development.

    During a brief phone interview with CNBC, Deckoff confirmed he had bought the islands.

    “No comment,” he said when asked about his plans for it.

    Deckoff then hung up.

    Little St. James covers more than 70 acres, and Great St. James is more than double the size of its neighbor.

    The purchase was reported on the same day that CNBC revealed that lawyers for the U.S. Virgin Islands and an accuser of Epstein’s will depose JPMorgan Chase CEO Jamie Dimon starting on May 26.

    The USVI and the anonymous woman accused JPMorgan in civil federal lawsuits of benefiting from Epstein’s sex trafficking of young women at his Virgin Islands property. Epstein was for years a customer of JPMorgan Chase, and had millions of dollars in deposits there.

    The bank denies the allegations in the lawsuits. But it kept Epstein as a customer until 2013, five years after he pleaded guilty to a Florida state court charge of soliciting sex for money from an underage girl.

    Multiple women have said they were raped or sexually assaulted on Little St. James, where Epstein had a mansion. They included Virginia Giuffre, who has alleged she was sexually abused there, and in other locations, by Prince Andrew, the younger brother of King Charles of Great Britain.

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    Andrew has denied her claim, but in February 2022 agreed to a confidential settlement with Giuffre to end a civil lawsuit against him in U.S. District Court in Manhattan.

    The USVI’s lawsuit against JPMorgan notes that Epstein “was a resident of the Virgin Islands and he maintained a residence on Little St. James, which he acquired in 1998 and in 2016 he also purchased Great St. James.”

    The islands were collectively valued at $86 million after Epstein’s death in August 2019, when the former friend of Donald Trump and Bill Clinton committed suicide in a Manhattan jail a month after being arrested on federal child sex trafficking charges.

    “The Epstein Enterprise in 1998 acquired Little St. James in the Virgin Islands as the perfect hideaway and haven for trafficking young women and underage girls for sexual servitude, child abuse and sexual assault,” the suit says.

    “Little St. James is a secluded, private island, nearly two miles from St. Thomas with no other residents,” the suit noted. “It can be visited only by private boat or helicopter … Epstein had easy access to Little St. James from the private airfield on St. Thomas, only 10 minutes away by his private helicopter, but the women and children he trafficked, abused, and held there were not able to leave without his permission and assistance, as it was too far and dangerous to swim to St. Thomas.”

    The lawsuit goes on to say that in 2016, Epstein used a straw purchaser to hide Epstein’s identity and bought Great St. James the nearest island to Little St. James.

    “By then, Epstein was a convicted sex offender,” the suit says. “The Epstein Enterprise purchased the island for more than $20 million because its participants wanted to ensure that the island did not become a base from which others could view their activities or visitors.”

    It adds: “By acquiring ownership and control of Great St. James to the exclusion of others, the Epstein Enterprise created additional barriers to prevent those held involuntarily on Little St. James from escaping or obtaining help from others.”

    Epstein’s former paramour and longtime procurer Ghislaine Maxwell was sentenced last June to 20 years in prison for recruiting and grooming teenage girls to be sexually abused by Epstein.

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  • Supreme Court says Halkbank not immune from U.S. prosecution for Iran sanctions violations under FSIA

    Supreme Court says Halkbank not immune from U.S. prosecution for Iran sanctions violations under FSIA

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    Halkbank in Istanbul, Turkey.

    Kemel Uzel | Bloomberg | Getty Images

    The Supreme Court ruled Wednesday that Halkbank, which is owned by the government of Turkey, is not immune from criminal indictment in New York federal court under the Foreign Sovereign Immunities Act of 1976 for allegedly violating U.S. economic sanctions on Iran.

    But the Supreme Court kicked back to a federal appeals court the question of whether Halkbank still can claim sovereign immunity from prosecution in the United States under common law.

    That raises the prospect that the Supreme Court will again be asked in the future to rule on the legality of the prosecution.

    The indictment in Manhattan federal court alleges that high-ranking Turkish and Iranian government officials participated in the sanctions evasion scheme with Halkbank and its officers.

    “On Halkbank’s view, a purely commercial business that is directly and majority-owned by a foreign state could engage in criminal conduct affecting U. S. citizens and threatening U. S. national security while facing no criminal accountability at all in U. S. courts,” Justice Brett Kavanaugh wrote in the majority opinion, in which he was joined by six other justices.

    “Nothing in the FSIA supports that result,” Kavanaugh wrote.

    However, the Supreme Court told the U.S. 2nd Circuit Court of Appeals to reconsider a request by Halkbank to toss out the prosecution based on an argument of common law immunity.

    The Supreme Court previously recognized that a civil lawsuit not governed by the FSIA law may still be barred under by foreign sovereign immunity under so-called common law.

    The U.S. government has argued that the bar would not apply to criminal prosecution of a commercial entity such as Halkbank.

    Halkbank did not immediately respond to a request for comment on the Supreme Court’s ruling.

    Justice Neil Gorsuch filed a separate opinion that concurred in part with the majority but also dissented in part. Justice Samuel Alito joined Gorsuch in his opinion, which says it disagreed with the majority’s ruling that “FSIA’s rules apply only in civil cases.”

    “The same statute we routinely use to analyze sovereign immunity in civil cases applies equally
    in criminal ones,” Gorsuch wrote.

    He added that the majority decision “overcomplicates the law for no good reason,” saying that he would have come to the same conclusion that the 2nd Circuit previously reached, “This case against Halkbank may proceed.”

    Halkbank was indicted in October 2019 by a grand jury in Manhattan federal court for allegedly conspiring for years to evade U.S. economic sanctions imposed on Iran by laundering billions of dollars of Iranian oil and gas money.

    At the time of the indictment, then-Assistant Attorney General for National Security John Demers said, “This is one of the most serious Iran sanctions violations we have seen, and no business should profit from evading our laws or risking our national security.”

    In October 2017, a Turkish-Iranian gold trader named Reza Zarrab pleaded guilty to seven criminal counts related to the scheme.

    In January 2018, former Halkbank Deputy General Manager Mehmet Hakan Atilla was convicted at trial of five of the six criminal counts he was charged with.

    Correction: Former Halkbank Deputy General Manager Mehmet Hakan Atilla was convicted In January 2018 at trial of five of the six criminal counts he was charged with. An earlier version misspelled his name.

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  • Read the indictment against Donald Trump, details of payments to porn star, Playboy model

    Read the indictment against Donald Trump, details of payments to porn star, Playboy model

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    Former President Donald Trump is charged with 34 felony counts of falsifying business records in connection with a scheme that directed hush money payments to two women before the 2016 presidential election.

    The 16-page indictment against Trump was unsealed Tuesday as he became the first former U.S. president ever to be arraigned on criminal charges.

    “Not guilty,” Trump said from his seat to Judge Juan Merchan during the hearing in Manhattan Supreme Court.

    The indictment says those payments were part of a broader scheme to suppress claims by the women, porn star Stormy Daniels and Playboy model Karen McDougal, that they had sex with Trump, in a bid to keep their stories from affecting Trump’s chances against Democrat Hillary Clinton in the 2016 election.

    Follow CNBC.com‘s live coverage of former President Donald Trump’s surrender and arraignment at the Manhattan criminal courthouse.

    Prosecutors also said a Trump-friendly publishing company, American Media Inc., paid $30,000 to a former Trump Tower doorman who claimed to have a story about Trump fathering a child out of wedlock.

    All three payments were part of an alleged “catch and kill” effort by Trump and others, among them then-AMI chief David Pecker, from August 2015 to December 2017 “to identify, purchase, and bury negative information about him and boost his electoral prospects,” prosecutors said.

    Read the indictment against Trump

    Manhattan District Attorney Alvin Bragg at a press conference said each of the false statements in business records, which related to the payment to Daniels, were done to cover up other crimes related to the 2016 election.

    Those crimes included violations of New York state election law, and false statements to tax authorities, he said. Falsifying business records can be charged as a misdemeanor, but it also can be charged as a felony if done to cover up another crime.

    Merchan scheduled the next hearing in the case for Dec. 4. It is possible that the criminal case will not be resolved before the 2024 presidential election, where Trump is seeking the Republican nomination.

    Bragg in a statement said, “The People of the State of New York allege that Donald J. Trump repeatedly and fraudulently falsified New York business records to conceal crimes that hid damaging information from the voting public during the 2016 presidential election.”

    “Manhattan is home to the country’s most significant business market. We cannot allow New York businesses to manipulate their records to cover up criminal conduct,” Bragg said.

    A prosecutor told the judge that the DA’s office was concerned about comments Trump has made on social media that could threaten the DA’s office and the city.

    That included one post depicting Trump wielding a bat over the head of District Attorney Alvin Bragg.

    The judge said that he was taking the harsh rhetoric by Trump about the case very seriously.

    One of Trump’s lawyers, Todd Blanche, told Merchan that Trump has spoken forcefully, but that he was within his rights to do so.

    Before the arraignment, Trump’s son, Donald Trump Jr., posted a photo on Trump’s Truth Social site of Merchan’s daughter, who according to a Breitbart news article worked on the election campaign of President Joe Biden.

    “Seems relevant,” the younger Trump wrote. “The BS never ends folks.”

    Hush money payments

    Daniels received $130,000 from Trump’s then-lawyer and fixer Michael Cohen at Trump’s direction, 12 days before the 2016 election. Daniels, whose legal name is Stephanie Clifford, says she had sex with Trump one time in 2006, several months after his wife Melania Trump gave birth to their son Barron.

    Trump later reimbursed Cohen with a series of monthly checks, 11 in total. The checks first were issued by the Donald J. Trump Revocable Trust, while later ones came from Trump’s bank account, prosecutors said.

    Nine of the checks were signed by Trump, and “Each check was processed by the Trump Organization and illegally disguised as a payment for legal services rendered pursuant to a non-existent retainer agreement” with Cohen.

    Former U.S. President Donald Trump appears in court with his lawyer Joe Tacopina for an arraignment on charges stemming from his indictment by a Manhattan grand jury following a probe into hush money paid to porn star Stormy Daniels, in New York City, U.S., April 4, 2023. 

    Andrew Kelly | Reuters

    McDougal received $150,000 from AMI, the publisher of The National Enquirer, the supermarket tabloid that was allied with Trump. McDougal has said she had a long-term affair with Trump that began in 2006.

    Trump denies having sex with either Daniels or McDougal.

    Cohen pleaded guilty in 2018 to federal crimes, two of which were campaign finance violations for facilitating the payments to both Daniels and McDougal.

    The grand jury indicted Trump on Thursday. The charging document had remained sealed since then.

    The grand jury began hearing testimony in the case in late January.

    News of the proceedings came as a surprise, since a former prosecutor in the district attorney’s office last year had suggested the investigation into Trump was all but dead after Bragg declined to seek an indictment against Trump in connection with allegedly false financial statements involving real estate assets.

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    Read more of CNBC’s politics coverage:

    Trump separately is under criminal investigation by the Department of Justice and a state prosecutor in Georgia for efforts to reverse his 2020 election loss to President Joe Biden.

    The DOJ also is probing Trump for retaining government records after leaving the White House and for possible obstruction of justice.

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  • Frank founder criminally charged with fraud over $175 million JPMorgan deal

    Frank founder criminally charged with fraud over $175 million JPMorgan deal

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    Charlie Javice, Founder/CEO of Frank, which is a college financial aid start-up.

    Source: JP Morgan

    The Justice Department on Tuesday criminally charged Charlie Javice, founder of college financial planning platform Frank, with defrauding JPMorgan Chase out of $175 million. 

    Javice, 31, is accused of “falsely and dramatically” inflating the number of customers Frank actually had in a scheme to “fraudulently induce” the bank to acquire the startup in 2021, federal prosecutors in Manhattan said. She stood to gain more than $45 million from the alleged deception, they added. 

    The one-time rising tech star — who was once named as one of Forbes’ 30 Under 30 — was arrested Monday night in New Jersey and is expected in Manhattan federal court Tuesday afternoon.

    She faces four counts. They are one count of conspiracy to commit bank and wire fraud, one count of wire fraud affecting a financial institution, one count of bank fraud, and one count of securities fraud. Three of the charges each carry a maximum sentence of 30 years in prison. 

    “This arrest should warn entrepreneurs who lie to advance their businesses that their lies will catch up to them, and this Office will hold them accountable for putting their greed above the law,” Damian Williams, U.S. attorney for the Southern District of New York, said in a statement.

    The Securities and Exchange Commission on Tuesday also sued Javice for fraud in connection with the alleged scheme. 

    “Charlie denies the allegations,” a spokesperson for her attorney, Alex Spiro, told CNBC. Spiro had no additional comments, the spokesperson said.

    JPMorgan did not immediately respond to a request for comment. The bank’s CEO, Jamie Dimon, in January called the acquisition of Frank a “huge mistake.”

    The charges come months after JPMorgan filed a lawsuit against Javice alleging she duped the bank into believing Frank had more than 4 million customers. In reality, the startup had fewer than 300,000, JPMorgan said in its suit. 

    Javice used a data science professor to invent millions of fake accounts after JPMorgan pressed for confirmation of Frank’s customer base, the bank alleged. The suit included emails between the professor and Javice, including when the entrepreneur asked, “Will the fake emails look real with an eye check or better to use unique ID?” 

    JPMorgan only discovered the discrepancy when 70% of emails sent to a batch of about 400,000 Frank customers bounced back, according to the bank. It shut down the startup in January. 

    Javice in February filed a counterclaim, saying it was “implausible” that JPMorgan “was led to believe Frank had 4.25 million registered users when its website publicly claimed the company had helped more than 350,000 people access financial aid.”

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  • Google founder, former Disney exec to get subpoenas in JPMorgan Epstein lawsuit

    Google founder, former Disney exec to get subpoenas in JPMorgan Epstein lawsuit

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    A mugshot of Jeffrey Epstein released by the U.S. Justice Department.

    Source: U.S. Justice Department

    Google founder Sergey Brin, former Disney executive Michael Ovitz, Hyatt Hotels executive chairman Thomas Pritzker and a fourth billionaire, real estate investor Mort Zuckerman, will be subpoenaed in a lawsuit against JPMorgan Chase by the government of the U.S. Virgin Islands related to sex trafficking by Jeffrey Epstein.

    The subpoenas were first reported Friday by The Wall Street Journal. A source familiar with the matter confirmed them to CNBC.

    The subpoenas demand communications and documents related to the bank and Epstein, The Journal noted.

    News of the subpoenas comes three days after it was reported that JPMorgan CEO Jamie Dimon will answer questions under oath in the lawsuit, which alleges that the bank ignored warning signs about Epstein for years and continued retaining him as a customer.

    Kelly Sullivan | Getty Images Entertainment | Getty Images

    Last week, the Virgin Islands in a press release noted that it “alleges JPMorgan Chase could have prevented harm and trauma faced by the survivors of Jeffrey Epstein’s heinous abuse.”

    “But instead the bank chose to look the other way on these legal matters while continuing to use their banking relationship to grow their business with new clients introduced by Epstein,” the release said.

    On March 20, Judge Jed Rakoff ruled the suit against the bank, as well as a similar one by women who say Epstein trafficked them, can proceed toward trial.

    The plaintiffs claim that JPMorgan knowingly benefited from participating in Epstein’s trafficking scheme, which transported women to his residence in the Virgin Islands so that he could sexually abuse them.

    Jamie Dimon, CEO, JP Morgan Chase, during Jim Cramer interview, Feb. 23, 2023.

    CNBC

    JPMorgan has denied allegations in the suits which are pending in U.S. District Court in Manhattan.

    The bank earlier this month sued former JPMorgan investment banking chief Jes Staley, claiming he is responsible for the suits related to Epstein.

    The bank seeks to claw back more than $80 million that it paid Staley. He quit as CEO of Barclays in 2021 after a probe by United Kingdom financial regulators over his ties with Epstein.

    A lawyer for the Virgin Islands earlier this month said in court that Dimon knew in 2008 that Epstein was a sex trafficker. That was the year that Epstein first was hit with sex crime charges in state court in Florida.

    “If Staley is a rogue employee, why isn’t Jamie Dimon?” the attorney, Mimi Liu said at the hearing,

    “Staley knew, Dimon knew, JPMorgan Chase knew” about Epstein’s criminal conduct, Liu said.

    A JPMorgan lawyer said at the time that the bank disputed those claims, “in particular the point about Jamie Dimon having any specific knowledge.” A bank spokeswoman has said, “Jamie Dimon has no recollection of reviewing the Epstein accounts.”

    JPMorgan only ended its customer relationship with Epstein in 2013.

    Epstein, a former friend of Donald Trump, Bill Clinton and Britain’s Prince Andrew, was arrested on federal child sex trafficking charges in July 2019. He killed himself a month later in a Manhattan jail cell after being denied bail.

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  • Trump faces about 30 criminal counts for document fraud in New York indictment

    Trump faces about 30 criminal counts for document fraud in New York indictment

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    U.S. President Donald Trump delivers an update on the so-called Operation Warp Speed program, the joint Defense Department and HHS initiative that has struck deals with several drugmakers in an effort to help speed up the search for effective treatments for the ongoing coronavirus disease (COVID-19) pandemic, in an address from the Rose Garden at the White House in Washington, U.S., November 13, 2020.

    Carlos Barria | Reuters

    Former President Donald Trump has been hit with about 30 criminal charges related to alleged document fraud in the indictment issued against him by a New York grand jury, NBC reported Friday.

    The indictment, which was approved Thursday, remains sealed in Manhattan Supreme Court.

    Trump, who is the leading contender for the 2024 Republican presidential nomination, is scheduled to be arraigned in Manhattan court on Tuesday.

    At least part, if not all, of the indictment is understood to be related to Trump’s reimbursement of his then-lawyer and fixer Michael Cohen for a $130,000 hush money payment made to porn star Stormy Daniels before the 2016 presidential election.

    The Trump Organization recorded payments that Trump made to Cohen for that purpose as “legal expenses.”

    It is a misdemeanor under New York law to misclassify business expenses. That can become a felony if done to cover up another crime.

    Daniels, whose legal name is Stephanie Clifford, was paid to keep silent about her claim that she had sex with Trump in 2006. He denies her account.

    Trump is the first U.S. president, former or otherwise, to be charged in a criminal case.

    A Quinnipiac University poll released this week found that a majority of Americans believe that Trump should be disqualified from running for the White House if he is charged with a crime.

    However, there is no law against Trump seeking the presidency while facing charges.

    Follow our live coverage of the NY grand jury’s indictment of former President Donald Trump.

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  • Sam Bankman-Fried pleads not guilty to latest round of federal fraud, bribery charges

    Sam Bankman-Fried pleads not guilty to latest round of federal fraud, bribery charges

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    Sam Bankman-Fried pleaded not guilty in New York federal court Thursday to five additional charges related to the collapse of his former crypto exchange FTX and hedge fund Alameda Research.

    Bankman-Fried’s attorney, Mark Cohen, said he plans to file a motion that his client not be tried on all the counts, arguing that he cannot be tried on charges brought after his extradition.

    The U.S. attorney’s office for the Southern District of New York unveiled its third round of criminal charges against the disgraced ex-CEO of FTX in a superseding indictment that was unsealed on Tuesday. This time, the focus was on Bankman-Fried allegedly bribing a foreign government.

    Prosecutors allege that Bankman-Fried — who arrived at the courthouse about an hour before the hearing, looking disheveled after an intense media scrum — directed the payment of at least $40 million in cryptocurrency to one or more Chinese government officials to an attempt to unfreeze trading accounts tied to his crypto hedge fund, Alameda Research.

    Bankman-Fried and his associates considered and tried “numerous methods” to unfreeze the accounts, which contained around $1 billion worth of cryptocurrency, prosecutors allege. Ultimately, after both legal and personal efforts failed, Bankman-Fried agreed to and directed a multimillion-dollar bribe to have the frozen accounts unlocked, prosecutors alleged.

    Bankman-Fried’s hedge fund then allegedly used the unfrozen assets to continue to fund Alameda’s loss-generating trades, continuing on what the government says was a fraud upon customers and investors for another year.

    The onetime crypto billionaire, who did not speak during the entirety of the hearing, also pled not guilty to charges related to bank fraud, money laundering, as well as operating an unlicensed money transmitting business and making unlawful political contributions in the U.S. The 13-count indictment gives details of hundreds of political donations that Bankman-Fried allegedly directed in violation of federal campaign finance laws. Bankman-Fried already pleaded not guilty to eight other counts.

    FTX and Alameda imploded in November 2022 after concerns about their balance sheet turned into a veritable bank run. In addition to this federal indictment, Bankman-Fried also faces civil charges from both the Securities and Exchange Commission and the Commodity Futures Trading Commission. Meanwhile, Bankman-Fried’s collapsed FTX remains mired in Delaware bankruptcy court proceedings.

    The trial is set to begin in October.

    — CNBC’s Dawn Giel contributed to this report.

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  • Sam Bankman-Fried tried to influence witness through Signal, DOJ alleges

    Sam Bankman-Fried tried to influence witness through Signal, DOJ alleges

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    Former FTX chief executive Sam Bankman-Fried (C) arrives to enter a plea before US District Judge Lewis Kaplan in the Manhattan federal court, New York, January 3, 2023. 

    Ed Jones | AFP | Getty Images

    Federal prosecutors are attempting to bar indicted FTX co-founder Sam Bankman-Fried from using encrypted messaging software, citing efforts that may “constitute witness tampering,” according to a letter filed in Manhattan federal court Friday.

    Bankman-Fried reached out to the “current General Counsel of FTX US who may be a witness at trial,” prosecutors said. Ryne Miller, who was not identified by name in the government filing, is the current counsel for FTX US, and a former partner at Kirkland & Ellis.

    The government claims that Bankman-Fried wrote to Miller via Signal, an encrypted messaging app, on Jan. 15, days after bankruptcy officials at crypto exchange disclosed the recovery of more than $5 billion in FTX assets.

    “I would really love to reconnect and see if there’s a way for us to have a constructive relationship, use each other as resources when possible, or at least vet things with each other,” Bankman-Fried allegedly told Miller.

    Bankman-Fried has also been in contact with “other current and former FTX employees,” the filing said. Federal prosecutors allege that Bankman-Fried’s request suggests an effort to influence the witness’s testimony, and that Bankman-Fried’s effort to improve his relationship with Miller “may itself constitute witness tampering.”

    Both Miller and a representative for Bankman-Fried declined to comment.

    In restricting Bankman-Fried’s access to Signal and other encrypted messaging platforms, the government cites a need to “prevent obstruction of justice.” Federal prosecutors claim that Bankman-Fried directed Alameda and FTX through Slack and Signal, and ordered his employees set communications to “autodelete after 30 days or less.”

    Citing previously undisclosed testimony from ex-Alameda CEO Caroline Ellison, the government claimed that Bankman-Fried indicated “many legal cases turn on documentation and it is more difficult to build a legal case if information is not written down or preserved.” Ellison pled guilty to multiple charges of fraud and has been cooperating with the U.S. Attorney’s efforts to build a case against Bankman-Fried.

    Bankman-Fried pled not guilty to eight charges in connection with the collapse of his multibillion-dollar crypto empire, FTX. He is due in federal court in October, after being released on $250 million bond.

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  • FTC asks judge to hold ‘pharma bro’ Martin Shkreli in contempt of court for forming new drug firm

    FTC asks judge to hold ‘pharma bro’ Martin Shkreli in contempt of court for forming new drug firm

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    Martin Shkreli, former chief executive officer of Turing Pharmaceuticals AG, center, pauses while speak to members of the media with his attorney Benjamin Brafman, right, outside federal court in the Brooklyn borough of New York, U.S., on Friday, Aug. 4, 2017.

    Peter Foley | Bloomberg | Getty Images

    The Federal Trade Commission on Friday asked that notorious “pharma bro” Martin Shkreli be held in contempt of court for forming a new drug company in violation of a judge’s ban on the convicted fraudster from working in the pharmaceuticals industry.

    Shkreli, who was released from prison last year, in February was banned “for life from directly or indirectly
    participating in any manner in the pharmaceutical industry” as a result of the FTC’s antitrust lawsuit against him and a prior drug company that he founded.

    That order stemmed from Manhattan federal court Judge Denise Cote’s ruling that Shkreli oversaw an illegal scheme to maintain a monopoly on the life-saving drug Daraprim, which continued even as he sat in prison for his conviction in an unrelated securities fraud case.

    In its court filing Friday, the FTC noted that Shkreli in July announced the formation of a new company, Druglike, “that appears to be involved in the drug industry.”

    The agency said that action, as well as Shkreli’s failure to pay his nearly $25 million share of a $64.6 million judgment he owes in the lawsuit, suggest that he is violating the court’s orders in the case.

    The FTC and a group of states that sued Shkreli said in the filing he has failed to comply with their requests to give them documents and submit to an interview as part of their probe into whether his involvement with Druglink violates the February 2022 court order banning him from the industry.

    “Martin Shkreli’s failure to comply with the court’s order demonstrates a clear disregard for the law,” said Holly Vedova, director of the FTC’s Bureau of Competition, in a statement.

    “The FTC will not hesitate to deploy the full scope of its authorities to enable a comprehensive investigation into any potential misconduct,” Vedova said.

    Benjamin Brafman, a lawyer for Shkreli, did not immediately reply to a request for comment.

    This is breaking news. Please check back for updates.

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  • Trump and lawyer sanctioned almost $1 million for ‘frivolous’ lawsuit against Hillary Clinton

    Trump and lawyer sanctioned almost $1 million for ‘frivolous’ lawsuit against Hillary Clinton

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    A federal judge on Thursday imposed nearly $1 million in sanctions on former President Donald Trump and his lawyer for filing a since-dismissed ‘frivolous’ lawsuit against Hillary Clinton and many others, which had claimed they tried to rig the 2016 presidential election in her favor by smearing Trump.

    “We are confronted with a lawsuit that should never have been filed, which was completely frivolous, both factually and legally, and which was brought in bad faith for an improper purpose,” wrote Judge John Middlebrooks in U.S. District Court for the Southern District of Florida in his order sanctioning Trump.

    The judge in his order noted that “Mr. Trump is a prolific and sophisticated litigant who is repeatedly using the courts to seek revenge on political adversaries.”

    “He is the mastermind of strategic abuse of the judicial process, and he cannot be seen as a litigant blindly following the advice of a lawyer,” Middlebrooks wrote.

    “He knew full well the impact of his actions … As such, I find that sanctions should be imposed upon Mr. Trump and his lead counsel, Ms. [Alina] Habba.”

    Under the order, the Republican Trump and Habba, are jointly and severally liable for the total amount of sanctions the judge imposed: $937,989.39.

    “The amount of fees awarded in this case, while reasonable, is substantial,” Middlebrooks noted.

    He called the legal pleadings filed in the case by Habba “abusive litigation tactics,” and said the original lawsuit and a later, 186-page amended complaint “were drafted to advance political narrative; not to address legal harm caused by any Defendant.”

    “The Amended Complaint is a hodgepodge of disconnected, often immaterial events, followed by an implausible conclusion,” Middlebrooks wrote.

    “This is a deliberate attempt to harass; to tell a story without regard to facts.”

    Habba did not immediately respond to requests for comment on the order.

    Trump, who is seeking the 2024 GOP presidential nomination, filed his suit in March against Clinton, who was the 2016 Democratic presidential nominee.

    The other 30 defendants included the Democratic National Commission, former DNC Chairwoman Debbie Wasserman Schultz, Clinton campaign chief John Podesta, the law firm Perkins Coie, the research firm Fusion GPS, the former FBI officials James Comey, Andrew McCabe, Peter Strzok and Lisa Page, as well as Christopher Steele, the ex-British intelligence agent who authored the notorious “Trump-Russia dossier” opposition research report before the election.

    The suit, which sought $70 million in damages, accused the defendants of conspiring to “weave a false narrative” during the 2016 election that Trump and his campaign were colluding with Russia in their efforts to win the race.

    The suit claimed that Clinton and other defendants falsified evidence, deceived law-enforcement agencies and engaged in other skulduggery that made “even the events of Watergate pale in comparison.”

    Middlebrooks earlier dismissed the lawsuit against Clinton and all other defendants “with prejudice,” which bars Trump from refiling the complaint.

    MIddlebrooks’ order is the latest in a series of embarrassing legal setbacks for Trump, which have included the criminal conviction last month in New York state court of his Manhattan-based real estate company, The Trump Organization, for a years-long tax avoidance scheme.

    Trump and his company also face a major civil lawsuit by New York’s attorney general for an alleged scheme to misstate the valuation of real estate assets for financial gain, and Trump also is being sued by the writer E. Jean Carroll, who accuses him of raping her in the mid-1990s in New York.

    A state grand jury in Georgia recently completed gathering evidence and hearing testimony as part of an ongoing criminal probe into whether Trump illegally tried to overturn the results of the state’s 2020 election, which he lost.

    And federal prosecutors are investigating Trump for his bid to reverse his loss in the national election to President Joe Biden, and his taking government documents to his Florida residence when he left office.

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  • Alec Baldwin to be charged with involuntary manslaughter in ‘Rust’ movie set shooting

    Alec Baldwin to be charged with involuntary manslaughter in ‘Rust’ movie set shooting

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    Alec Baldwin will be criminally charged by New Mexico prosecutors for the 2021 fatal shooting of cinematographer Halyna Hutchins on the set of the film “Rust,” authorities said Thursday.

    Baldwin, the Emmy-winning star of “30 Rock” and dozens of films including “The Hunt for Red October,” shot the bullet that killed Hutchins. Baldwin said he “didn’t pull the trigger” in an ABC interview. An FBI forensic report obtained by ABC News uncovered that despite Baldwin’s denial, the gun could not have gone off without the trigger being pulled.

    Baldwin and the movie’s armorer, Hannah Gutierrez-Reed, each will be charged with two counts of involuntary manslaughter. One of the involuntary manslaughter counts is one in which prosecutors will have to prove there is underlying negligence, prosecutors said. This is a fourth-degree felony that carries a sentence of up to 18 months in jail and a $5,000 fine.

    The second involuntary manslaughter charge is one for the commission of a lawful act, a more severe charge which requires proof that there was more than simple negligence involved in a death, prosecutors said. This charge includes a firearm enhancement, which adds a mandatory penalty of five years in jail.

    Baldwin and Gutierrez-Reed will be charged under a standard called “charged in the alternative.” If the case ends up going to trial, a jury will determine which of the two charges they’re guilty of.

    “Rust” assistant director David Halls signed a plea deal for the charge of negligent use of a deadly weapon, resulting in a suspended sentence and six months of probation.

    “If any one of these three people — Alec Baldwin, Hannah Gutierrez-Reed or David Halls — had done their job, Halyna Hutchins would be alive today. It’s that simple,” Andrea Reeb, the special prosecutor on the case, said in a statement Thursday. “The evidence clearly shows a pattern of criminal disregard for safety on the ‘Rust’ film set.”

    The prosecutors’ decision is “a terrible miscarriage of justice,” said Luke Nikas, Baldwin’s attorney. “Mr. Baldwin had no reason to believe there was a live bullet in the gun – or anywhere on the movie set. He relied on the professionals with whom he worked, who assured him the gun did not have live rounds. We will fight these charges, and we will win.”

    Gutierrez-Reed’s attorneys called it a “very flawed investigation” in a statement Thursday.

    “Hannah is, and has always been, very emotional and sad about this tragic accident. But she did not commit involuntary manslaughter,” they said.

    Through lawyers, relatives of Hutchins thanked authorities for pursuing the charges.

    “It is a comfort to the family that, in New Mexico, no one is above the law,” attorney Brian Panish said. “We support the charges, will fully cooperate with this prosecution, and fervently hope the justice system works to protect the public and hold accountable those who break the law.”

    According to documents obtained by the New York Post in September, the office of Santa Fe District Attorney Mary Carmack-Altwies had been waiting to review evidence from an FBI investigation since October 2021 after the accidental shooting took place. Once the office received the evidence, the DA announced that she intended to pursue charges and filed for $635,500 in emergency funding to hire a specialized team, including a new prosecutor, investigator, and spokesperson, to handle the case. The DA received about half of the requested funds.

    Hutchins was shot and killed on Oct. 21, 2021, during a scene where Baldwin used a gun that was filled with live bullet rounds instead of dummies, which is against Hollywood film standards. Joel Souza, the movie’s director, was injured by the bullet but later recovered.

    Hall, the movie’s assistant director, admitted less than a week after the shooting that he had not properly checked the gun for safety before handing it to the film’s armorer, Gutierrez-Reed, who would pass it along to Baldwin for the scene.

    Hutchins’ death amplified a wave of rallying cries for safer filming protocols on movie sets. Her family ultimately sued Baldwin and the film producers in February 2022 for wrongful death. The lawsuit was settled in October and the movie resumed filming with Matt Hutchins, the widower of Halyna, serving as an executive producer.

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  • FTX founder Sam Bankman-Fried to be released on $250 million bail, will live with his parents

    FTX founder Sam Bankman-Fried to be released on $250 million bail, will live with his parents

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    FTX co-founder Sam Bankman-Fried is escorted out of the Magistrate’s Court on December 21, 2022 in Nassau, Bahamas. 

    Joe Raedle | Getty Images

    FTX founder Sam Bankman-Fried will be released on $250 million bond while awaiting trial for fraud and other criminal charges, a New York federal judge ruled on Thursday.

    The terms of his personal recognizance bond were agreed to by prosecutors and Bankman-Fried’s lawyers. The 30-year-old will face his next hearing in New York City on Jan. 3. Bankman-Fried was expected to be released from federal custody on Thursday, a prosecutor said.

    A recognizance bond is a written commitment from the accused to appear in court when ordered. In return, Bankman-Fried’s camp would not be required to meet the full collateral requirements on the bail.

    The bond was secured by equity in his family home, and by the signatures of his parents and two other individuals with “considerable” assets.

    In addition to the $250 million package, which prosecutors called “the largest-ever pretrial bond,” the former crypto billionaire would also be required to wear an electronic monitoring bracelet, submit to mental health counseling, and restrict himself to the Northern District of California.

    Judge Gabriel Gorenstein said that Bankman-Fried would require “strict” supervision following his release to his parents’ home in California.

    His parents, both Stanford Law professors, were present in the courtroom. Bankman-Fried was flanked by two U.S. Marshals, dressed in a suit and tie.

    He did not speak except when answering the judge.

    The former FTX CEO would also be barred from opening any new lines of credit over $1,000 while awaiting trial over what federal regulators have called a “brazen” fraud at his bankrupt crypto empire.

    Bankman-Fried was the heart of “a fraud of epic proportions,” assistant U.S. attorney Nicolas Roos told the court. But he voluntarily returned to the United States, has no history of flight, and has significantly reduced financial assets.

    Bankman-Fried had previously claimed that he was down to a mere $100,000, a steep fall from grace for a man who was once at the head of a $32 billion crypto empire.

    Bankman-Fried stands accused of perpetrating a multibillion-dollar fraud on his investors, using customer funds to purchase properties, fund political donations, and backstop trades at his hedge fund Alameda Research.

    Federal regulators allege over $8 billion in customer funds is missing. FTX filed for bankruptcy protection in Delaware on Nov. 11. Bankman-Fried’s replacement, CEO John Ray, said he’d never seen such a “complete failure of corporate control.”

    Two of his top lieutenants, Caroline Ellison and Gary Wang, pleaded guilty to related fraud charges and are cooperating with law enforcement. Wang and Ellison’s plea deals were revealed on Wednesday.

    Bankman-Fried was indicted by the U.S. District Court in Manhattan on eight counts including securities fraud and money laundering, and was rendered from the Bahamas to New York Wednesday evening.

    Bankman-Fried’s bail dwarfs other federal white-collar bonds. Bernie Madoff posted a $10 million bond while awaiting trial on his multibillion-dollar Ponzi scheme. Jeff Skilling, former Enron CEO, posted a $5 million bond, while Elizabeth Holmes, Theranos founder, posted a scant $500,000.

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  • FTX founder Sam Bankman-Fried will fly to New York after days of courtroom chaos

    FTX founder Sam Bankman-Fried will fly to New York after days of courtroom chaos

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    FTX co-founder Sam Bankman-Fried is escorted by corrections officers to the Magistrate’s Court on December 21, 2022 in Nassau, Bahamas. 

    Joe Raedle | Getty Images

    Sam Bankman-Fried is flying Wednesday night to New York, according to the office of the attorney general of the Bahamas, where he is later expected to be arraigned in U.S. federal court, concluding a days-long saga.

    Bankman-Fried, 30, was indicted in New York federal court on Dec. 9 and arrested three days later by Bahamas law enforcement at the request of U.S. prosecutors.

    His attorney, Jerone Roberts, reading from an affidavit signed Dec. 20, told the court that Bankman-Fried was consenting to extradition in part due to a “desire to make the relevant customers whole.” Bankman-Fried was “anxious to leave,” Roberts told the court.

    It is unclear how his return would help plug the $8 billion balance sheet hole that, according to federal complaints, came as a result of risky trading and extravagant spending by FTX executives.

    Bankman-Fried will face arraignment and bail proceedings after he lands. Unlike other white-collar cases, however, Bankman-Fried faces a particular set of challenges.

    “This is obviously not the typical case,” former federal prosecutor Renato Mariotti told CNBC. “He is facing decades in prison. And he doesn’t have ties to the community in SDNY like a typical defendant would and also has ties to a foreign jurisdiction. So prosecutors have a shot at getting the judge to order detention unless the defendant posts property or a significant cash bond.”

    Throughout the extradition waiver process, Bankman-Fried’s Bahamas legal team and U.S. lawyers have appeared to be at loggerheads. His legal team initially stated that it would fight extradition attempts, but on Saturday a person familiar with the matter told CNBC that the crypto billionaire had changed his mind and would return to the United States.

    On Monday morning, Bankman-Fried’s Bahamas counsel said the former billionaire wouldn’t return to the United States without viewing a copy of his indictment, with the lawyer telling a Bahamas magistrate that he was “shocked” to even see Bankman-Fried in court.

    Chaos ensued as reporters and attorneys for Bankman-Fried attempted to pin down whether the former crypto billionaire would be rendered back to the United States for arraignment in federal court.

    Finally, on Tuesday, a Bahamas prison official and a source familiar with the matter confirmed that Bankman-Fried had signed extradition paperwork and would appear for his final hearing in Nassau on Thursday.

    When Bankman-Fried lands in New York, the so-far atypical proceedings should take on a more familiar tenor. In a typical federal case, the accused “would be taken to the detention center for processing before the initial detention hearing/arraignment,” former CFTC trial attorney & Kennyhertz Perry partner Braden Perry told CNBC.

    “But again, if arranged in advance with the magistrate in charge of the detention hearing, the court may allow a hearing before processing, but that is unlikely. His attorneys could also waive the detention hearing, at least for now, and request a more detailed evidentiary hearing to ensure their best arguments are made with proper evidence for detention, as it’s usually a one-time shot at getting out before trial,” Perry continued.

    Bankman-Fried stands accused by federal law enforcement and financial regulators of perpetrating what the SEC called one of the largest and most “brazen” frauds in recent memory. Replacement CEO John J. Ray described a “complete failure of corporate control” at the company.

    Federal regulators have alleged that Bankman-Fried used that $8 billion worth of customer assets for extravagant real estate purchases and vanity projects, including stadium naming rights and millions in political donations.

    CNBC’s Kate Rooney contributed to this report.

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  • Jan. 6 committee sends DOJ historic criminal referral of Trump over Capitol riot

    Jan. 6 committee sends DOJ historic criminal referral of Trump over Capitol riot

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    The Jan. 6 select House committee in a unanimous vote Monday referred former President Donald Trump to the Department of Justice for criminal investigation and potential prosecution for his efforts to overturn his loss in the 2020 election.

    The committee’s historic referral says there is sufficient evidence to refer Trump for four crimes: obstructing an official proceeding, conspiracy to defraud the government, making knowingly and willfully materially false statements to the federal government, and inciting or assisting an insurrection.

    “We propose to the committee advancing referrals where the gravity of the specific offense, the severity of its actual harm, and the centrality of the offender to the overall design of the unlawful scheme to overthrow the election, compel us to speak,” said Rep. Jamie Raskin, D-Maryland, as he addressed his fellow panel members.

    “Ours is not a system of justice where foot soldiers go to jail and the masterminds and ringleaders get a free pass,” Raskin said.

    While the Justice Department, which is already conducting an investigation of Trump, takes criminal referrals seriously, it is not obligated to charge anyone with a crime.

    CNBC Politics

    Read more of CNBC’s politics coverage:

    However, the House panel’s referral underscores how seriously the committee views Trump’s actions after the election, in the weeks leading up to the Jan. 6, 2021, invasion of the halls of Congress by a mob of his supporters.

    The nine-member panel is comprised of seven Democrats and two Republicans, Reps. Liz Cheney of Wyoming and Adam Kinzinger of Illinois. Cheney was defeated in the GOP primary earlier this year, losing to Rep.-elect Harriet Hageman, while Kinzinger did not seek re-election this year.

    Trump, who has denied any wrongdoing, has not been charged with any crimes related to the 2020 election and the attack on the U.S. Capitol.

    Five people died as an immediate result of the riot, one of them a Capitol Police officer, Brian Sicknick. Nearly 140 other Capitol and Washington, D.C., police officers were injured in the attack, and several cops took their own lives on the heels of the riot.

    If Trump were to be charged and convicted of insurrection, he theoretically could be barred from holding federal office again under the 14th Amendment of the U.S. Constitution. Trump last month announced that he will seek the Republican nomination for president in 2024.

    The committee on Monday also recommended that the DOJ investigate and potentially prosecute Trump’s election law attorney John Eastman for his role in advancing a plan to overturn the election results. Eastman’s referral was for his alleged violation of two criminal statutes: impeding an official proceeding of the United States government, and conspiring to defraud the United States.

    Eastman was the author of a two-page memo that outlined a plan for then-Vice President Mike Pence to refuse to certify several states’ Electoral College electors when Congress met for that purpose on Jan. 6.

    U.S. Rep. Jamie Raskin (D-MD) carries the comittee’s final report as he departs after the final public meeting of the U.S. House Select Committee investigating the January 6 Attack on the U.S. Capitol, on Capitol Hill in Washington, U.S., December 19, 2022. 

    Jonathan Ernst | Reuters

    Panel member Rep. Jamie Raskin, D-Maryland, said the committee would refer four members of Congress “for appropriate sanction by the House Ethics Committee for failure to comply with lawful subpoenas.” He did not name them, but House Minority Leader Kevin McCarthy is among the members who defied a subpoena from the committee.

    As it made its referrals, the committee released a 154-page executive summary of its investigation.

    The committee’s actions Monday come after nearly 18 months of investigation, which included more than 1,200 witness interviews, the examination of hundreds of thousands of documents, the issuance of more than 100 subpoenas, and public hearings.

    The DOJ already is conducting a criminal probe of Trump for those actions, which involved an effort to reverse his losses to President Joe Biden in several swing states, and to pressure Pence to refuse to accept Congress’ certification of Biden’s victory in the Electoral College.

    The members of the U.S. House Select Committee investigating the January 6 Attack on the U.S. Capitol sit beneath a video of former U.S. President Donald Trump talking about the results of the 2020 U.S. Presidential election as they hold their final public meeting to release their report on Capitol Hill in Washington, U.S., December 19, 2022. 

    Jonathan Ernst | Reuters

    The DOJ also is separately investigating him for his removal of government documents from the White House when he left office in January 2021.

    House Speaker Nancy Pelosi, D-California, in a statement Monday lauded the committee’s work.

    “With painstaking detail, this executive summary documents the sinister plot to subvert the Congress, shred the Constitution and halt the peaceful transfer of power,” Pelosi said, adding that she respects the panel’s findings.

    “Our Founders made clear that, in the United States of America, no one is above the law,” Pelosi said. “This bedrock principle remains unequivocally true, and justice must be done.”

    Jack Smith, who was appointed special counsel for the DOJ last month to handle its investigations of Trump, said at the time of that appointment, “I intend to conduct the assigned investigations, and any prosecutions that may result from them, independently and in the best traditions of the Department of Justice.”

    Smith added at that time: “The pace of the investigations will not pause or flag under my watch. I will exercise independent judgement and will move the investigations forward expeditiously and thoroughly to whatever outcome the facts and the law dictate.”

    Trump has called the investigations into his conduct after the 2020 election “witch hunts,” and defended his actions as legitimate.

    He has falsely claimed he won the election, and that Biden’s victory was the result of widespread voter fraud in the swing states he lost.

    Trump also has claimed that Pence had the authority to reject the Electoral College votes of those contested swing states. However, Pence concluded he did not have that power, a conclusion that is backed by a wide array of constitutional scholars and others.

    A Trump spokesman over the weekend told NBC News in a statement,  “The January 6th un-Select Committee held show trials by Never Trump partisans who are a stain on this country’s history.”

    “This Kangaroo court has been nothing more than a vanity project that insults Americans’ intelligence and makes a mockery of our democracy,” the spokesman said.

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  • Sam Bankman-Fried will now surrender himself for extradition before Bahamian court Monday: Source

    Sam Bankman-Fried will now surrender himself for extradition before Bahamian court Monday: Source

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    FTX founder Sam Bankman-Fried (2nd L) is led away handcuffed by officers of the Royal Bahamas Police Force in Nassau, Bahamas on December 13, 2022. 

    Mario Duncanson | AFP | Getty Images

    FTX founder and former CEO Sam Bankman-Fried will no longer contest extradition to the U.S., an about-face just days after he was remanded to Bahamian jail pending a hearing, a person familiar with the matter told CNBC.

    The former crypto billionaire will appear in Bahamian court this Monday to formally waive his extradition rights, paving the way for federal authorities to secure his return to the U.S.

    Extradition between the Bahamas and the U.S. is codified by a 1991 treaty. In practice, the process takes months, if not years, to complete because the accused have numerous chances to appeal. Bankman-Fried’s legal team had initially said that it planned to fight extradition. The change of heart would move up the timeline for Bankman-Fried’s federal trial significantly.

    The 30-year-old MIT graduate was originally scheduled for his next hearing in February 2023.

    A representative for Bankman-Fried declined to comment.

    Bankman-Fried was indicted in New York federal court on Monday, on charges of wire fraud, securities fraud, conspiracy to defraud the United States, and money laundering. If sentenced, he could face the rest of his life in prison. The former FTX CEO also faces concurrent charges from the Securities and Exchange Commission and the Commodity Futures Trading Commission over similar allegations that he worked to defraud FTX customers of billions of dollars since 2019, the year the exchange was founded.

    At the heart of Bankman-Fried’s empire was Alameda Research, a crypto hedge fund that federal regulators allege used FTX customer money to engage in trading which lost billions of dollars.

    FTX’s collapse was precipitated when reporting by CoinDesk revealed a highly concentrated position in self-issued FTT coins, which Bankman-Fried’s hedge fund Alameda Research used as collateral for billions in crypto loans. Binance, a rival exchange, announced it would sell its stake in FTT, spurring a massive withdrawal in funds. The company froze assets and declared bankruptcy days later. Charges from the SEC and CFTC indicated that FTX had commingled customer funds with Bankman-Fried’s crypto hedge fund, Alameda Research, and that billions in customer deposits had been lost along the way.

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  • Sam Bankman-Fried has been arrested following FTX collapse. Here’s what happens next

    Sam Bankman-Fried has been arrested following FTX collapse. Here’s what happens next

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    Tom Williams | CQ-Roll Call, Inc. | Getty Images

    Sam Bankman-Fried’s arrest in the Bahamas on Monday marks the beginning of a new chapter in the FTX saga, one that will pit the former crypto billionaire against the Southern District of New York.

    The indictment is expected to remain sealed until Tuesday morning. U.S. prosecutors haven’t commented, and neither the Attorney General of the Bahamas nor the Royal Bahamas Police Force would confirm the nature of the charges against Bankman-Fried.

    The New York Times reported that the charges against Bankman-Fried included conspiracy to commit wire fraud and securities fraud, as well as standalone charges of securities fraud, wire fraud and money laundering.

    The SEC has initiated a separate set of charges against Bankman-Fried, relating to “violations of our securities laws, which will be filed publicly tomorrow in the Southern District of New York,” enforcement director Gurbir Grewal said in a statement on Monday.

    A spokesperson for the SEC declined further comment.

    The charges could land Bankman-Fried in prison for decades, legal experts told CNBC. But before he ever serves time, U.S. prosecutors have to secure an extradition from the Bahamas back to New York.

    An effort to extradite

    “It is inconceivable to me that the Justice Department would have charged this case unless they were confident that they could extradite him,” Renato Mariotti, a former federal prosecutor, told CNBC.

    Mariotti anticipates an extradition will take weeks to complete.

    “The statement by the Bahamian government suggests that they’re going to cooperate,” Mariotti said.

    Read more about tech and crypto from CNBC Pro

    The U.S. and the Bahamas have had an extradition treaty in place since 1931, with the most recent iteration codified in 1990. Because Bankman-Fried hasn’t been convicted in the Bahamas yet, U.S. prosecutors had to secure an arrest warrant and provide sufficient evidence to the Bahamians that he had committed a crime.

    Extradition is the first step in a process that could take years to finish. Given the magnitude of Bankman-Fried’s alleged crimes, prosecutors and regulators will be pursuing concurrent cases around the world.

    A trial in the U.S. “may not occur for years,” Mariotti said.

    “The more that they charge, the bigger that the case is, the more time they’re going to need to get in motion,” he said. “I would say late 2023 is the earliest a trial would occur.”

    Prosecutors could argue that FTX breached its fiduciary duty by allegedly using customer funds to artificially stabilize the price of the company’s self-issued FTT coin, Mariotti said.

    Intent is also a factor in fraud cases, and Bankman-Fried insists he didn’t know about potentially fraudulent activity. He told CNBC’s Andrew Ross Sorkin at the New York Times DealBook conference that he “didn’t knowingly commingle funds.”

    “I didn’t ever try to commit fraud,” Bankman-Fried said.

    In prepared testimony for the House Financial Services committee, new FTX CEO John Ray confirmed that commingling of funds had occurred between FTX and Alameda Research, Bankman-Fried’s hedge fund.

    The risk of an FTX crypto contagion

    Other legal trouble

    Beyond the criminal charges set to be unveiled Tuesday morning, Bankman-Fried is also facing civil action, which could be brought by the SEC, the Commodity Futures Trading Commission and state banking and securities regulators, said Richard Levin, who chairs the fintech and regulation practice at Nelson Mullins Riley & Scarborough.

    The CFTC and lawmakers have begun their probes into FTX and Bankman-Fried, who told Sorkin he was down to his last $100,000.

    Shortly after Bankman-Fried’s arrest, the SEC appeared to confirm that the agency would pursue a separate set of charges from the criminal indictment.

    Lawmakers also expressed their satisfaction at Bankman-Fried’s arrest. Senator Sherrod Brown (D-Ohio), who chairs the Senate Committee on Banking, Housing, and Urban Affairs, applauded both the Justice Department and Bahamian law enforcement “for holding Sam Bankman-Fried accountable.”

    Rep. Maxine Waters (D-Calif.), the chairwoman of the House Financial Services Committee, echoed that sentiment, but expressed disappointment that Bankman-Fried was arrested before his House testimony, which was scheduled for Tuesday.

    “I am surprised to hear that Sam Bankman-Fried was arrested in the Bahamas at the direction of the United States Attorney,” Waters said in a statement.

    “[The] American public deserves to hear directly from Mr. Bankman-Fried about the actions that’ve harmed over one million people,” Waters continued.

    Bankman-Fried had also been invited to appear before the Senate prior to his arrest. That hearing will occur on Wednesday.

    It’s unclear whether the SEC or the CFTC will take the lead in securing civil damages.

    “The question of who would be taking the lead there, whether it be the SEC or CFTC, depends on whether or not there were securities involved,” Mariotti told CNBC.

    SEC Chairman Gary Gensler, who met with Bankman-Fried and FTX executives earlier this year, has said publicly that “many crypto tokens are securities,” which would make his agency the primary regulator.

    But many exchanges, including FTX, have crypto derivatives platforms that sell financial products like futures and options, which fall under the CFTC’s jurisdiction.

    “For selling unregistered securities without a registration or an exemption, you could be looking at the Securities Exchange Commission suing for disgorgement — monetary penalties,” said Levin, who’s represented clients before both agencies.

    Investors who have lost their savings aren’t waiting. Class-action suits have already been filed against FTX endorsers, like comedian Larry David and football superstar Tom Brady. One suit excoriated the celebrities for allegedly failing to do their “due diligence prior to marketing [FTX] to the public.”

    FTX’s industry peers are also filing suit against Bankman-Fried. Failed lender BlockFi sued Bankman-Fried in November, seeking unnamed collateral that the FTX founder provided for the crypto lending firm.

    FTX and Bankman-Fried had previously rescued BlockFi from insolvency in June, but when FTX failed, BlockFi was left with a similar liquidity problem and filed for bankruptcy protection in New Jersey.

    Bankman-Fried has also been sued in Florida and California federal courts. He faces class-action suits in both states over “one of the great frauds in history,” a California court filing said.

    The largest securities class-action settlement was for $7.2 billion in the Enron accounting fraud case, according to Stanford research. The possibility of a multibillion-dollar settlement would come on top of civil and criminal fines that Bankman-Fried faces.

    FTX testimony this week is going to be very telling, says CEO of Bitfury Group, it sounds like a scheme

    A life behind bars

    If the DOJ were able to secure a conviction, a judge would look to several factors to determine how long to sentence him.

    Based on the size of the losses, if Bankman-Fried is convicted on any of the fraud charges, he could be behind bars for years — potentially for the rest of his life, said Braden Perry, a partner at Kennyhertz Perry who advises clients on anti-money laundering, compliance and enforcement issues.

    But the length of any potential sentence is hard to predict, said Perry, who was previously a senior trial lawyer for the CFTC, FTX’s only official U.S. regulator.

    Federal sentencing guidelines follow a numeric system to determine the maximum and minimum allowable sentence, but the system can be esoteric. The scale, or “offense level,” starts at one, and maxes out at 43.

    A wire fraud conviction rates as a seven on the scale, with a minimum sentence ranging from zero to six months.

    But mitigating factors and enhancements can alter that rating, Perry told CNBC.

    “The dollar value of loss plays a significant role. Under the guidelines, any loss above $550 million adds 30 points to the base level offense,” Perry said. FTX customers have lost billions of dollars.

    “Having 25 or more victims adds 6 points, [and] use of certain regulated markets adds 4,” Perry said.

    That means Bankman-Fried could be facing life in federal prison, without the possibility of supervised release, if he’s convicted on just one of the offenses that prosecutors will reportedly pursue.

    If convicted, his sentence could be reduced by mitigating factors.

    “In practice, many white-collar defendants are sentenced to lesser sentences than what the guidelines dictate,” Perry said. Even in large fraud cases, that 30-point enhancement previously mentioned can be considered punitive.

    By way of comparison, Stefan Qin, the Australian founder of a $90 million cryptocurrency hedge fund, was sentenced to more than seven years in prison after he pleaded guilty to one count of securities fraud.

    Roger Nils-Jonas Karlsson, a Swedish national accused by the United States of defrauding over 3,500 victims of more than $16 million, was sentenced to 15 years in prison for securities fraud, wire fraud and money laundering.

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