The Journal. - The Trial of Crypto’s Golden Boy: Jury Selection

Episode Date: October 4, 2023

On the first day of trial, Sam Bankman-Fried debuts a new haircut and the judge begins the process of selecting a jury. WSJ’s Caitlin Ostroff delves into the judge who will preside over this historic trial, and the jury who will determine Bankman Fried’s fate. Further Reading: - Sam Bankman-Fried’s Courtroom Look Spells a Personal Vibe Shift  - Crypto Could Be a Mystery to Jurors in Bankman-Fried Case  Further Listening: - The Trial of Crypto’s Golden Boy  Learn more about your ad choices. Visit megaphone.fm/adchoices

It's 6.45am and we are standing outside the Southern District of New York Courthouse. We've been out here for about an hour and the sun has finally risen, which is exciting. And I'm standing here with Rachel Humphries, my producer. Hi Caitlin. Hi Rachel, how are you on this part of the morning? I mean, I don't make a habit of coming to this part of Lower Manhattan at early hours of the morning, but considering that, I'm very well. I mean, it's day one of Sam Bankman-Fried's trial.

So, Rachel, why are we here? Why is this happening? We're here because Sam Bankman-Fried, who was formerly the face of crypto, he's accused of fraud. He's accused of stealing billions of dollars from his customers. And it's going to be very interesting. In this trial, we're going to hear from people that he worked with, people that he had very close relationships with, who are going to testify against him.

And we also may hear from Bankman Freit, although there's a big question mark over that. How does it feel for you as a reporter who's covered this story for so long to finally be here on the first day of this trial? It's like, it honestly, like covering the entire collapse of FTX is a fever dream. Like the, like it really took like a week and a half pretty much for the entire collapse of FTX is a fever dream. It really took a week and a half, pretty much, for the entire thing to go from the next big crypto exchange to completely gone. And so I've spent a lot of time in the last year

trying to unpick what happened and the aftermath of that. And there's a lot of questions that I still have that I'm just hoping get answered. And what is going to be happening here at the court today? Today is jury selection. So Judge Lewis Kaplan, who's presiding over this case, is expected to pick the jury, 12 jurors plus alternates. And they will be the New Yorkers deciding whether Bankman Freed is guilty or not guilty. This is the trial of Crypto's golden boy.

I'm Caitlin Ostroff. And I'm Rachel Humphries. Coming up, jury selection. Seth and Riley's Garage Hard Lemonade. A delicious classic with a vibrant taste of fresh lemons. The perfect balance of sweet and sour with a crisp, zesty edge. Welcome to The Garage, the place of refreshing hard lemonade. Available at the LCBO. Must be legal drinking age. Please enjoy responsibly. So we've talked a lot about Sam Bankman Freed ahead of this trial,

but there's one other person who's going to be very central to this case. Who is that, Rachel? The judge, of course, Lewis Kaplan, who is going to be the judge in this case and will be a name I think that we mention a lot on this podcast going forward. He's very experienced. He's been a judge for decades, actually. He was nominated by Bill Clinton and became a U.S. District Court judge in 1994. And being a judge in a federal court in New York, he's pretty busy. He deals with a lot of cases. And I actually found this clip of him speaking at an NYU law school event in 2016, where he talked about his caseload.

The day I reported for duty in 1994, there was on my desk a note from my good friend from practice, then Judge John Martin. Dear Lou, congratulations. There are 400 cases on your docket this morning. There will be 400 cases on your docket the day you die. Pace yourself. This is a pretty high-profile case for Kaplan. Has he dealt with those before? Yes, this is a very high-profile case,

but he's not unfamiliar to a lot of media interest considering some of the cases he's worked on before. So he was the judge in a first federal trial of a Guantanamo detainee and in the Kevin Spacey trial that took place in 2022. So I'm sure he's used to a lot of media speculation around his cases. And he actually spoke about overseeing big trials during that panel in 2016. I mean, occasionally big cases do go to trial. Big criminal cases usually go to trial. And so if it's a big criminal case, that is really a happy day.

And we've actually seen Kaplan in court a couple of times at the pre-trial hearings ahead of the actual trial. And Kaplan has this very authoritative presence and like takes absolutely no nonsense. I mean, like, what have you made of him? Oh, yeah. You know, we've been sat in those courtrooms and he sort of always leans back very far in his chair, but then immediately sort of like jumps forward when he needs to interrupt one of the lawyers. And I wonder what it would be like to be a lawyer in Kaplan's courtroom. So I spoke to an attorney called Jennifer Keller. She represented Kevin Spacey during that trial in 2022 and gave me an insight into what that experience is like. I would describe Judge Kaplan as an extremely experienced judge who has had many, many high profile cases

over the years. He doesn't want any BS. When he asks you a question, he wants a direct answer. There's no loosey-goosey-ness in his court. Is it ever intimidating in his courtroom as a lawyer? He can be a little intimidating. Why are you laughing? It's just that when you're in his courtroom, you know you're in a federal court in front of a federal judge with a lot of power. There are some judges who let the lawyers walk all over them. He's not one of them. Is there a certain look he gives where you know to back off a bit or not push him too far? He has both a stare and an upraised eyebrow that tells you, stop.

I also asked Jennifer about Bankman-Fried's case. Now, as you know, Bankman-Fried was sent to jail in August ahead of the trial, and that was after he'd shared the diaries of Caroline Ellison, the former CEO of Alameda, with the New York Times. Now, government prosecutors had argued that that amounted to witness tampering, and the judge ended up siding with them. And I asked Jennifer what that might mean for Magman Freed ahead of his trial. Well, I don't think Judge Kaplan is likely to let that slop over into his rulings.

He's pretty good at compartmentalizing those things. But I think that the biggest effect is it's much more difficult to defend yourself when you're in custody. Just much more difficult. And among other things, even staying awake in the courtroom is hard because they wake you up at ungodly hours. You're fed horrible food. You're in a situation where there's a lot of clamor around you. It's hard to sleep. And it's hard for the lawyers because your lawyers, every time they want to meet with you, have to get into the jail to do so, which is time-consuming and burdensome. But that's just not the ideal circumstance. So

Mr. Bankman-Fried really did himself no favors by getting his bail revoked. But before we go into Bankman-Fed too deeply and the start of his trial, there's one other group of people we need to talk about, and that's the jury. Judge Kaplan has to pick 12 people, 12 New Yorkers, to be Bankman Freed's peers and decide whether he is guilty or not guilty based on the evidence presented. So the government's lawyers and Sam's defense attorneys have kind of been arguing back and forth a little bit over what questions Judge Kaplan should be asking of this group of people. So we've gotten a preview of what some of those are, including have you heard or read anything about Sam Bankman Freed?

Do you have a negative opinion of cryptocurrency? Have you ever lost money on crypto? And the questions kind of give this window into what the lawyers and what the judge is going to try and find, which is a group of people who don't kind of have any strong opinions one way or the other about, you know, kind of the main premises of this trial. And, you know, that of the main premises of this trial. And, you know, that might be very challenging to do. Which was why, which got us thinking about actually how hard it could be to find someone for this jury, someone who doesn't have any

biases towards Bankman-Fried or indeed towards crypto. So we took some of those questions that Bankman-Fried's lawyers want the jury to be asked and we decided to put them to the people of Brooklyn. All of Sam's potential peers right out there on the street. So we printed out a photo of him and we showed it to passersby. Do you know who this person is? You ever see this guy before? Do you know who this person is? You ever see this guy before?

One of the people I spoke to was Devin Collins and Devin didn't know who Bank Winfried was. I don't. I'm sorry. I don't. Do you know anything about crypto and have any opinions on crypto? I know about it. I avoid it as much as possible. I really, I don't have the energy to get dabbling to that. And it was at this point I thought devin might be an okay juror but then i gave a few more details about the case his name is sam bankman free guilty why do you say guilty everyone i know who's into crypto is like the most insufferable insufferable person i know people who are into like crypto, like NFTs, you know, all that jazz.

They're just, they have an idea in their head that they're just like superior to everyone else. And, you know. So as a hypothetical juror, Devin didn't really know much about Bankman Freed. But Devin did have very strong opinions about crypto, which actually we found amongst a few people that we spoke to. opinions about crypto, which actually we found amongst a few people that we spoke to. Yeah. And we did even find some people who knew about Bankman Freed, including Anthony Padomo. He was throwing scaffolding in the back of a truck when we spoke to him. Do you know who this is by any chance? Yes. The NFT guy, right? The guy that got caught?

Oh, that's Sam Bankman Freed. Yeah, I forget his name. Yeah, he duped everybody with the... But people are stupid anyway for believing in all that crap, crypto and all of that. You got to be able to see a thing and touch a thing and know what it's used for. I mean, it's all speculation, but Jesus Christ,

at least let me see it and touch it, you know? So that was some people that we spoke to on the streets, which didn't fill me with confidence that it's going to be easy to find a jury that doesn't have any opinions. But when I spoke to Jennifer Keller, the attorney in the Kevin Spacey case, I asked her about how difficult it is to find a jury

in a case with a high-profile defendant like Bankman-Fried. And she explained to me that it's less about the fact that people have opinions, it's about what those opinions are and how deep those opinions might go. I mean, almost all of our, I think every one of our jurors knew who Kevin Spacey was. Most of them had heard that there had been allegations. We had a couple jurors who served who said they had heard about the allegations in our case, but they felt that they would be able to put that aside and just go by the evidence they heard in the courtroom. I know that sounds like something that would be almost impossible to do, but they did it.

If somebody said, oh yeah, I've heard all about this case and I've formed some preliminary opinions about it, would simply excuse the person. But Judge Kaplan just goes a little deeper than that. Coming up, Sam Bankman-Fried appears in court and Judge Kaplan begins selecting a jury. We understand that your business is unique, so your business insurance should be too. Whether you're a shop owner, a pet groomer, a contractor, or a consultant, you can get customized coverage for your business. Contact a licensed TD Insurance advisor to learn more.

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What stood out to you the most today? What caught your attention? So first things first, when Sam Bankman Freed entered the courtroom, he had a drastically different look to him. Gone is the unruly, curly, untamed hair, which has been sheared off, we heard, from one of the other inmates of the jail he's being held at. He seems to have lost a little bit of weight while in custody. And yeah, he was wearing this black suit that he got from Macy's that kind of hung off him a little bit. And so just very different image of a person than, you know, Bankman Freed has really been up till now.

The first day's proceedings was jury selection. How would you say it went? Yeah, so jury selection is a weird process. You just learn the most random details about people, finding out what's on their calendar for the next couple of weeks, weddings they're going to, like if they have opinions on crypto. Yeah. And as that was going on, how would you describe Bankman Freed's role in it all? So Bankman Freed in past hearings has been a little bit fidgety, and he definitely wasn't this time. He had a laptop in front of him. We were squinting at various points trying to see what he was doing on that laptop, unsuccessfully, might I add.

And so he seemed much more focused, much more calmer than in past hearings. And at one point in the questioning, Judge Kaplan asked him to stand up and show himself, do almost a pose for the jury so that they could see what he looked like very well. And that was to basically find out if anyone had interacted with him but maybe didn't recognize the name.

But it felt a little bit strange to be watching him just stand up and model for a second. So now what, Caitlin? What happens next? So tomorrow morning, we're wrapping up jury selection. There are 50 prospective jurors who have been bulletproofed through this line of vetting that we've gone through all day. And among them, 18 people will be picked tomorrow morning, 12 jurors, 6 alternates, and that will be the jury. And then after that we're going to go into opening arguments for the defence and the government

and from there we're going to start getting evidence and witnesses. The trial really gets underway. The trial of Sam Eggman-Fried starts. See you in the... well, you'd call it a line, I'd call it a queue. So I'll see you. See you in court. See you in the, well, you'd call it a line, I'd call it a queue. I'll see you. See you in court. See you. Cool.

That's all for today, Wednesday, October 4th. The Child of Crypto's Golden Boy is part of The Journal, which is a co-production of Spotify and The Wall Street Journal. I'm Caitlin Ostroff. And I'm Rachel Humphries. This episode was produced by Enrique Perez de la Rosa, and it was edited by Catherine Whalen. Additional reporting from James Finelli and Corinne Ramey. Our engineer is Peter Leonard,

and our theme music is by So Wiley and remixed by Peter Leonard. Additional music in this episode by Peter Leonard. Thanks for listening. Check back here for trial updates.