This text was created by a transcription service. This version may not be final and may be updated.
Caitlin Ostroff. It's 6:45 a.m. and we're standing in front of the Southern District of New York courthouse. We stayed here for about an hour and the sun finally came out, which was very nice. And I'm standing here with my producer, Rachel Humphreys.
Rachel Humphreys. Hi Caitlin.
Caitlin Ostroff. Hello Rachel. How are you on this beautiful morning?
Rachel Humphreys. I mean, I'm not used to early mornings in this part of Lower Manhattan, but considering that, I'm having a great time. I mean, this is the first day of Sam Bankman and Freed's trial.
Caitlin Ostroff. Rachel, why are we here? Why is this happening?
Rachel Humphreys. We are here because Sam Bankman-Fried, a former cryptocurrency spokesman, has been accused of fraud. He is accused of stealing billions of dollars from his clients. It will be very interesting. During this trial we will hear from people he worked with, people he was very close to, who will testify against him. And maybe we'll hear something from Bankman-Fried, even if it's with a big question mark. As a reporter who's been covering this story for so long, how does it feel to finally be here on the first day of the trial?
Caitlin Ostroff. Honestly, covering the entire FTX debacle is a fever dream. It only took a week and a half for all this to completely disappear from yet another major crypto exchange. I've spent a lot of time over the past year trying to figure out what happened next. I still have many questions that I hope to answer.
Rachel Humphreys. What will happen in court today?
Caitlin Ostroff. During jury selection today, Judge Lewis Kaplan, who is presiding over the case, is expected to select a jury of 12 jurors and alternates. The people of New York will decide whether Bankman-Fried is guilty or not. This is the trial of the golden boy of cryptocurrency. My name is Caitlin Ostroff.
Rachel Humphreys. And my name is Rachel Humphreys.
Caitlin Ostroff. Jury selection will take place soon. We talked a lot about Sam Bankman-Fried before this trial, but there is another man who will be at the center of this case. Who is this, Rachel?
Rachel Humphreys. The judge, of course, is Lewis Kaplan, who will be the judge on this case, and that's a name we'll be mentioning a lot on this podcast. He is very experienced. He has been a de facto judge for decades. He was nominated by Bill Clinton and became a U.S. District Court judge in 1994. As a federal court judge in New York, he is very busy. He manages many things. I actually found this video of him talking about his workload at a 2016 NYU Law School event.
Lewis Kaplan. On the day I took office in 1994, there was a note on my desk from my almost good friend, Judge John Martin. “Dear Liu, congratulations! There are 400 cases on your list this morning. On the day you die there will be 400 cases. Keep up the good work.
Caitlin Ostroff. This is quite a high-profile case for Kaplan. Has this already been taken care of?
Rachel Humphreys. Yes. It's a high-profile case, but given some of the cases he's worked on in the past, he's no stranger to significant media attention. He was a judge in the first federal trial of a Guantanamo Bay detainee and in the 2022 trial of Kevin Spacey, so I'm sure he's used to a lot of media speculation about his cases. In 2016, within this college, he actually discussed monitoring major legal issues.
Lewis Kaplan. I mean, sometimes important cases end up in court. Major criminal cases are usually tried in court. When it comes to a major crime, it's a lucky day indeed.
Caitlin Ostroff. In fact, we saw Kaplan in court several times during preliminary hearings before the trial itself. Kaplan has a very authoritative presence and allows absolutely no bullshit. I mean, what do you think about it?
Rachel Humphreys. Oh yeah. We would sit in these courtrooms and he would always lean back in his chair, but jump forward when he had to interrupt one of the lawyers. I was wondering what it would be like to be an attorney in Kaplan's courtroom, so I spoke with an attorney named Jennifer Keller. He represented Kevin Spacey in this trial in 2022 and told me about that experience.
Jennifer Keller. I would characterize Judge Kaplan as an experienced judge who has tried many high-profile cases over the years. He doesn't want any nonsense. When he asks you a question, he just wants an answer. There is no weakness in his court.
Rachel Humphreys. As a lawyer, have you ever been intimidated by the courtroom?
Jennifer Keller. This can be a little scary.
Rachel Humphreys. Why are you laughing?
Jennifer Keller. When you are in a courtroom, you just know that you are in federal court before a very powerful federal judge. There are judges who let lawyers do their thing. He's not one of them.
Rachel Humphreys. Is there a look in his eyes that lets you know you should hold back or not back down too much?
Jennifer Keller. His gaze and raised eyebrow tell you to stop.
Rachel Humphreys. I also asked Jennifer about the Bankman-Fried case. As you know, Bankman-Fried was sent to prison in August on the eve of his trial. This comes after she shared the diary of former Alameda CEO Caroline Ellison with the New York Times. Prosecutors argued it was witness tampering, and the judge ultimately sided with them. Before the trial, I asked Jennifer what this meant for Bankman-Fried.
Jennifer Keller. I don't think Judge Kaplan will take that into account in his decisions. He's very good at sharing these things. But I think the biggest impact is that defending yourself while in custody is much more difficult, but much more difficult. And besides everything else, it’s even difficult to sleep in the courtroom. By staying up at odd hours and eating terrible food, you find yourself in a situation where there is a lot of noise around you and you have difficulty falling asleep. And it's difficult for lawyers, because every time your lawyers want to meet with you, they have to go to jail, and that's time-consuming and stressful. But this is not an ideal situation. Mr Bankman-Fried really did himself no favors by revoking the bail.
Caitlin Ostroff. But before we get into the details of the Bankman-Fried trial, we need to talk about one more group of people: the jury. Judge Kaplan must select 12 people, 12 New Yorkers, as Bankman-Fried's partners and decide whether he is guilty or not based on the evidence presented. The government's lawyers and Sam's lawyers sparred briefly over what questions Judge Kaplan should ask the jury. We've got a rundown of some of them, including Have You Heard or Read Anything About Sam Bankman-Fried? Do you have a negative opinion about cryptocurrencies? Have you ever lost money using cryptocurrency? The questions provide insight into what lawyers and judges are trying to figure out, especially a group of people who don't have a strong opinion one way or another based on the decision. This can be a big problem.
Rachel Humphreys. This got us thinking about how difficult it would be to find someone on the jury who wasn't biased against Bankman-Fried or even against cryptocurrencies. We took note of some of the questions Bankman-Fried's lawyers wanted to ask the jury and decided to address them to the people of Brooklyn. This...
Caitlin Ostroff. All of Sam's potential partners are on their way.
Rachel Humphreys. We printed out his photograph and showed it to passers-by. Do you know who this person is? Have you ever seen this guy? One of the people I talked to was Devin Collins, but Devin didn't know who Bankman-Fried was.
Devin Collins. Me: Sorry, no.
Rachel Humphreys. Do you know anything about cryptocurrency and have your own opinion about it?
Devin Collins. I know about it. I avoid this as much as possible. I don't have the strength to do this.
Rachel Humphreys. At that moment I thought Devin might make a good lawyer, but then I told him some of the details of the case. His name is Sam Bankman Freed.
Devin Collins. Guilty.
Rachel Humphreys. Why are you to blame?
Devin Collins. Everyone I know who is interested in cryptocurrency is the most eager person I know. People who are into cryptocurrency and NFTs and all this stuff have this idea in their heads that they are just superior to everyone else.
Caitlin Ostroff. As a hypothetical juror, Devin knew little about Bankman-Fried.
Rachel Humphreys. But Devin had very strong opinions about cryptocurrency, which we learned from some of the people we talked to.
Caitlin Ostroff. Yes. And we even found people who knew Bankman-Fried, including Anthony Pidelmo. When we spoke, he was laying scaffolding on the back of a truck. Hello (inaudible). Do you know who this is?
Antoine Pidelmo. Yeah, yeah: the NFT guy is right, the one who got caught.
Caitlin Ostroff. Oh, it must be Sam Bankman-Fried.
Antoine Pidelmo. Yes, I forgot his name. Yes, he deceived everyone... But people are still fools to believe all these stories, mysterious and otherwise. You need to be able to see and touch something and know what it does. I mean, this is just a guess, but Jesus Christ, at least let me see it and touch it.
Rachel Humphreys. These were people we talked to on the street, and they didn't lead me to believe that it was easy to find jurors who didn't have an opinion. But when I spoke with Kevin Spacey's lawyer, Jennifer Keller, I asked her how difficult it would be to find a jury with a high-profile defendant like Bankman-Fried. He explained to me that it's not so much that people have opinions, but what those opinions are and the depth of them.
Jennifer Keller. I think every one of our judges knew who Kevin Spacey was. Most of them had heard about the charges. Several jurors said they had heard about the charges in our case, but said they could set that aside and rely solely on the evidence they heard in the courtroom. I know it seems almost impossible, but they did it. If someone were to say, “Yes, I've heard all about this case and have formed a preconceived opinion about it,” they would simply forgive the person involved, but Judge Kaplan goes a little further.
Rachel Humphreys. Sam Bankman-Fried then appears in court and Judge Kaplan begins jury selection. Okay, Caitlin, day one is over. We're out of court. It's about 5:45 p.m., so we've been here for almost 12 hours. What surprised you most today? What caught your attention?
Caitlin Ostroff. First. When Sam Bankman-Freed walked into the courtroom, he looked nothing like himself. “The unruly, frizzy, unruly hair that was cut is gone,” one of the other inmates heard at the prison where he was being held. Apparently, he lost weight during his arrest. He was wearing a baggy black suit that he bought at Macy's. Just a completely different image of the man Bankman-Fried used to be.
Rachel Humphreys. The first day of the trial was devoted to jury selection. How would you say it went?
Caitlin Ostroff. Jury selection is a strange process. You'll just find out the most random details about people, what's on their calendar for the next few weeks, what weddings they'll be attending, and whether they have an opinion on cryptocurrency.
Rachel Humphreys. Looking ahead, how would you describe Bankman-Fried's role in all of this?
Caitlin Ostroff. Sam Bankman-Fried has been a little nervous during previous auditions, and certainly not this time. There was a laptop in front of him. We searched in different places to try what it did on this laptop, but to no avail. He seemed much more focused and calmer than in the previous session. At one point in the hearing, Judge Kaplan asked her to stand and appear, essentially posing for the jury so they could see what she looked like. Mainly to see if anyone had interacted with him but may not have known his name. It was a little weird when he stood up for a second and modeled.
Rachel Humphreys. What now, Caitlin? What will happen next?
Caitlin Ostroff. Tomorrow morning we will complete jury selection. There are 50 potential jurors who are being vetted, which we've been doing all day. Tomorrow morning, 18 people will be selected from them, 12 jurors, six alternates - and this will be the jury. And then we'll move on to opening arguments for the defense and the government. And from there we will begin to collect evidence and witnesses.
Rachel Humphreys. The process really begins.
Caitlin Ostroff. The trial of Sam Bankman-Freed begins.
Rachel Humphreys. I'll meet you there... I'll take a look.
Caitlin Ostroff. See you in court.
Rachel Humphreys. See you in court. That's all for today, Wednesday, October 4th.
Caitlin Ostroff. Golden Boy's essay on cryptocurrency is part of The Journal, a joint project between Spotify and the Wall Street Journal. My name is Caitlin Ostroff.
Rachel Humphreys. And my name is Rachel Humphreys. This episode was produced by Enrique Perez de la Rosan and edited by Catherine Whelan.
Caitlin Ostroff. Additional reporting by James Funnell and Corinne Remy.
Rachel Humphreys. Our sound engineer is Peter Leonard, the theme song is by So Wiley, and the remix is by Peter Leonard. Additional music on this release by Peter Leonard.
Caitlin Ostroff. Thank you for your attention. Come back here for testing.