Crypto fraudster Sam Bankman-Fried has new pursuit: Jailhouse lawyer

Former Honduran President Juan Orlando Hernández was advised by his lawyers not to testify at his 2024 trial in New York City.

But another prisoner at the Metropolitan Detention Center in Brooklyn who had grown close to the ex-president suggested otherwise.

Acting as an informal legal adviser, the prisoner, Sam Bankman-Fried, encouraged Hernández to testify on his own behalf, Bankman-Fried said in a Friday interview from prison.

Hernández had already been inclined to take the stand, and he followed the advice. It went poorly. Days later, he was convicted of conspiring to import more than 400 tons of cocaine into the United States.

Twenty months ago, Bankman-Fried was sentenced to more than two decades in prison and ordered to pay $11 billion in restitution in a case that upended the cryptocurrency industry. During the trial, he testified on his own behalf -- a risky move that did not pay off -- and appeared at odds with his own lawyers. But since then, he has become a prolific jailhouse lawyer himself, dispensing advice to his fellow prisoners, several of whom have since expressed their gratitude.

Carmine Simpson, a former police officer convicted of soliciting nudes from a minor, said that while his sentence was "unreasonable and excessive," he was "confident that I would be in a worse spot now if not for Sam's help."

Along with Simpson and Hernández, Bankman-Fried has given legal advice to people accused of intent to distribute drugs and gun possession. He has helped to draft legal documents and letters to judges. He contributed to motions for Guo Wengui, also known as Miles Guo, an exiled Chinese billionaire convicted of fraud on a massive scale.

He was a sounding board for Sean Combs, the music executive and producer better known as Diddy. Combs, who was originally charged with racketeering, conspiracy and sex trafficking, was housed with Bankman-Fried at the Metropolitan Detention Center while awaiting trial. The crypto maven told the rap mogul how to prepare for aspects of the prosecution and how to avoid being undone by its tactics.

He helped Combs in other ways: When Combs struggled to operate the prison's video conferencing platform inside the prison, Bankman-Fried was there to offer technical assistance. Combs, who had a high-powered legal team, was acquitted of the most serious charges against him but found guilty of two counts.

Bankman-Fried's role as a jailhouse lawyer and overall helpmeet for prisoners came into view after President Donald Trump abruptly pardoned Hernández this month. The move was applauded by Bankman-Fried's revived account on social media site X, which is operated on his behalf by a friend.

The week of the pardon, Hernández's wife took time away from celebrating her husband's freedom to thank Bankman-Fried directly "for your friendship" and "for standing by him during those difficult moments."

"I read your message where you said, 'Juan Orlando is the most innocent prisoner I've met,' and I couldn't agree more," she said in a social media post. Hernández himself expressed approval of Bankman-Fried, comparing him favorably to his legal team during a recent podcast.

In Friday's interview, Bankman-Fried, who is appealing his case from the California prison where he is now held while also angling for a pardon, acknowledged that there was plenty he did not know because he is not a lawyer. He said he tells other prisoners as much.

But, he said, the standard of federal defense for people who do not plead guilty is "really shockingly low." He said that he did not feel that he was replacing lawyers, but rather that lawyers were "not doing much to begin with."

Bankman-Fried stressed that there were many structural reasons for the lawyers' neglect: Many are overwhelmed professionals with overloaded dockets who simply do not have the time to give their clients the attention that he does.

The jailhouse lawyer is a familiar archetype, sometimes dreaded by defense lawyers, who resent the incursion of an amateur into the attorney-client relationship. With the advantage of proximity, the amateur can gain a foothold by bad-mouthing the lawyer.

"The jailhouse lawyer is the person we worry about the most -- especially a person like him," Sabrina Shroff, a longtime federal defender who was one of Hernández's lawyers, said of Bankman-Fried. "It's a worrisome and uninvited addition to the legal team. It's concerning, and you can't fight it."

But from the perspective of the incarcerated, the jailhouse lawyer can play an essential -- and sometimes lifesaving -- role.

Michael Jones, 64, was found guilty of murder 35 years ago in the New York City borough of Brooklyn. Initially hopeless, he was held in a New York prison next to a jailhouse lawyer named Abdul, who insisted he learn the law.

Jones, who is known as Swell, said working on his case gave him purpose, and he began helping others. His work contributed directly to the early release of two defendants who had been convicted of murder but who had insisted on their innocence. One has since been exonerated.

Jones, who was released last year and now works as a paralegal in Brooklyn, said that the jailhouse lawyer gives hope -- and a different perspective than that of professionals.

"Sometimes, we see things that they don't see," he said. "They think within the four corners of the law, but sometimes you've got to think outside the box."

Jones also said that it took him a long time to become proficient, in part because his bitterness at his own conviction made it difficult to view the law objectively. Asked how long it took him to do so, he did not hesitate. "Seven years," he said.

Bankman-Fried, who has been behind bars for more than two years, has a complicated relationship with lawyers. His parents, Barbara Fried and Joseph Bankman, are both prominent professors at Stanford Law School, and Bankman-Fried testified that he was reliant on the lawyers at his crypto exchange, FTX.

But he also broke from standard legal advice, giving frequent interviews before the trial and testifying on his own behalf -- which legal commentators generally agreed went badly.

Speaking before his trial at a New York Times conference about his engagement with the press, he acknowledged that "the classic advice is, 'Don't say anything, recede into a hole.'" But, "that's not who I am, and that's not who I want to be," he said.

And in an interview with a video podcaster, Tiffany Fong, he was even harsher on his lawyers, saying that he had told them to pound sand -- but using a ruder expression -- when they had given him certain legal advice.

One of his legal advisers, David Mills, was similarly cutting, telling Bloomberg that Bankman-Fried may have been "the worst person I've ever seen do a cross-examination." Mills added that the case had been "unwinnable" and that he believed in Bankman-Fried's innocence.

Bankman-Fried's jailhouse pro bono work seems a natural continuation of the qualities that defined his public persona from the outset. As a believer in "effective altruism," a philanthropic movement devoted to amassing money only to give much of it away, generosity was the basis of his image.

His father, asked for comment for this article, said: "Sam gave most of his income to charity every year he had income. Now all he has is his time to give."

Bankman-Fried was convicted in 2023 after prosecutors argued that he had used customers' money to propel himself into a world of celebrity and political influence, spending extravagantly all the while.

He has always maintained his innocence, saying that the collapse of FTX was effectively the result of a mammoth accounting error.

Before his sentencing, his mother noted Bankman-Fried's legal advice to other prisoners. She wrote in a letter to the trial judge that half of her conversations with Bankman-Fried were taken up discussing the cases of two other inmates.

"He has put in hours and hours helping them organize the relevant facts, research the relevant law and write up summaries of the case for their (newly hired) lawyers," Fried wrote.

Simpson, the former police officer who is appealing his conviction and 23-year sentence from federal prison in Petersburg, Virginia, said in an email that he had met Bankman-Fried in summer 2023.

"The unit we were housed in was protective custody and was filled mostly with career criminals who were currently testifying for the government and thus only facing mere months in prison," he said. "The other inmates like Sam, former Honduran President Juan Hernández and I were the outliers. We mostly stuck together."

He said that he and Bankman-Fried bonded quickly, in part because "each of us had dedicated our lives to helping others, and since we now were both behind bars we felt as if our lives were being wasted."

"Even though Sam was overwhelmed with his own defense, he dedicated a lot of his time to help me jump start my own defense," he said, adding that Bankman-Fried had helped him get a new counsel appointed after his old one, whom he called incompetent, persuaded him to take an unfavorable plea deal.

He said he was optimistic about his appeal but "would prefer to still be cellmates with Sam so he could help me more."

Source: EconomicTimes
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