New York
Prosecutors: Bankman-Fried’s arguments to dismiss charges are meritless
NEW YORK (AP) — Sam Bankman-Fried’s lawyers made meritless arguments in a bid to convince a judge to toss out criminal charges alleging that the FTX founder stole from investors in his multibillion dollar cryptocurrency fund, federal prosecutors said Monday.
In papers filed in Manhattan federal court, prosecutors responded to early May filings in which Bankman-Fried’s lawyers insisted that the United States overreached in its case against Bankman-Fried, making federal crimes out of regulatory issues.
“These motions are meritless,” prosecutors wrote in a nearly 100-page filing. “The charges track the relevant statutes and the defendant’s alleged misconduct falls within the heartland of what these statutes prohibit.”
Bankman-Fried, 31, has been living with his parents in Palo Alto, California, after posting a $250 million personal recognizance bond after his December extradition from the Bahamas.
Bankman-Fried has pleaded not guilty to charges that he cheated investors and looted customer deposits on FTX to make lavish real estate purchases, donate money to politicians and make risky trades at Alameda Research, his cryptocurrency hedge fund trading firm. U.S. Attorney Damian Williams has called it one of the biggest frauds in U.S. history.
In March, new charges added to the indictment alleged that Bankman-Fried violated the anti-bribery provisions of the Foreign Corrupt Practices Act by directing the payment of $40 million in bribes to a Chinese official or officials to free up $1 billion in cryptocurrency that was frozen in early 2021.
In requesting all charges be dismissed, defense lawyers said eight counts in the original indictment were too vague and non-specific to proceed to trial and that additional charges were barred by an Extradition Treaty between the U.S. and the Bahamas that prohibited charges not approved at the time of extradition.
Prosecutors, though, asked Judge Lewis A. Kaplan to let all charges proceed. They said the claims against the original charges were legally sufficient and that permission is being sought from the Bahamas to permit the newest charges.
Prosecutors wrote that they expect Bankman-Fried’s lawyers to argue at trial that their client was not involved in Alameda’s day-to-day activities and was unaware that Alameda borrowed large sums from FTX to repay its lenders.
“The defendant’s spending of misappropriated funds on political donations is probative of the defendant’s motive for defrauding FTX’s customers and investors: the defendant wanted access to capital that he could use, in part, for political donations that would burnish his own image and improve the regulatory prospects of his business in the United States,” prosecutors wrote.
FTX entered bankruptcy in November when the global exchange ran out of money after the equivalent of a bank run. A trial is tentatively set for the fall.
Attorneys for Bankman-Fried did not respond late Monday to emailed requests for comment.
New York
Ruling clears way for Purdue Pharma to settle claims, protect Sacklers from lawsuits
A federal court ruling has cleared the way for OxyContin maker Purdue Pharma to settle thousands of legal claims over the toll of opioids. A three-judge panel of the 2nd U.S. Circuit Court of Appeals in New York on Tuesday overturned a lower court’s 2021 ruling that found bankruptcy courts did not have the authority to protect members of the Sackler family who own the company and who have not filed for bankruptcy protection from lawsuits. The concept is at the heart of Purdue’s plan to settle thousands of lawsuits in a deal that would include $5.5 billion to $6 billion from Sackler family members.
A federal court ruling cleared the way Tuesday for OxyContin maker Purdue Pharma’s settlement of thousands of legal claims over the toll of opioids.
The 2nd U.S. Circuit Court of Appeals in New York reversed a 2021 ruling that found bankruptcy court judges did not have the authority to shield from civil lawsuits members of the Sackler family who own Purdue and who have not filed for bankruptcy protection themselves.
Those protections are at the heart of the proposed deal that would end claims against Purdue filed by thousands of state, local and Native American tribal governments and other entities.
Under the plan, members of the Sackler family would give up ownership of Stamford, Connecticut-based Purdue, which would become a new company known as Knoa, with its profits being used to fight the opioid crisis. They would also contribute $5.5 billion to $6 billion in cash over time. A chunk of that money — at least $750 million — is to go to individual victims of the opioid crisis and their survivors.
Sackler family members have been clear: If they don’t get the legal protections, they won’t do their part of the deal.
Several states had been withholding support for the plan, but after a new round of negotiations this year, all of them came on board. That left just one high-profile objector: the Office of the U.S. Bankruptcy Trustee, an arm of the Justice Department.
A lawyer from that office told the 2nd Circuit in April 2022 that it’s a “fundamental inconsistency” that people who do not seek bankruptcy protection and have to give up most of their assets could be exempted from some lawsuits.
The settlement must still be approved by a bankruptcy court judge before it can be finalized. There’s also a chance the new ruling could be put on hold, pending an appeal to the U.S. Supreme Court.
Purdue is perhaps the highest-profile player in the opioid industry. But several other drugmakers, distribution companies and pharmacies also have been sued by state and local governments. While a handful of cases have gone to trial, many also are being settled.
The total value of proposed and finalized settlements in recent years is more than $50 billion. Companies that have reached deals include drugmakers Johnson & Johnson and Teva; distribution giants AmerisourceBergen, Cardinal Health and McKesson; and pharmacy chains CVS, Walgreens and Walmart. Most of the money is required to be used to fight the opioid crisis, which has been linked to more than 500,000 deaths in the U.S. over the past two decades.
South Carolina
Group wants high court to rename Brown v. Board of Education
SUMMERTON, S.C. (AP) — Civil rights leaders in South Carolina plan to petition the U.S. Supreme Court to rename the landmark Brown v. Board of Education decision that outlawed segregation of public schools across the country.
Over the next three months, a group representing past plaintiffs and their descendants plans to file paperwork asking the high court to reorder the set of five 1954 cases that led to the Brown ruling, The Post and Courier reports. The group, which has teamed up with a lawyer in Camden, South Carolina, wants to replace Brown v. Board of Education of Topeka with a South Carolina case that was filed earlier but is lesser known.
Briggs v. Elliott is a South Carolina case named after Harry Briggs, one of 20 parents who brought a lawsuit against Clarendon County School Board President R.W. Elliott.
The group sees the name change as a way to restore South Carolina as the cradle of the movement to desegregate public education.
“Everyone else lays down and says you can’t do this,” said prominent South Carolina civil rights photographer Cecil Williams, who has been at the forefront of the effort.
“Many will call it crazy,” he added. “It might be laughed out of court.”
To Williams and the 20 families who signed their names to the Briggs case, it is worth the effort to try to right what they view as an injustice.
“If this country is going to ever reconcile with its history, this is a good place, upon the 70th anniversary of Brown v. Board of Education,” Williams said.
The Briggs case, filed in May 1950, was the first such case to be taken to federal court. The Brown case came nearly nine months later.
Massachusetts
Lawsuit by man who said he was sexually abused by bishop settled
A lawsuit brought by a former altar boy who said he was raped as a child in the 1960s by a now-deceased Roman Catholic bishop in Massachusetts has been settled, the sides announced Friday.
The plaintiff identified in court papers as John Doe alleged in the suit filed in February 2021 that not only was he abused by former Diocese of Springfield Bishop Christopher Weldon as well as two other clergy, but also that the church engaged in a yearslong coverup to protect the bishop’s reputation and legacy.
The suit also said that even after abuse allegations against Weldon were found to be credible, diocesan officials as late as 2019 denied them.
The diocese’s current bishop in a statement announcing the settlement apologized.
“Mr. Doe’s allegations were determined to be credible, therefore, any public statement made on behalf of the Diocese in May or June of 2019 that is inconsistent with that is withdrawn,” Bishop William Byrne said. “We apologize to Mr. Doe for any harm those statements caused. We regret that interaction with the Diocese and civil litigation, often the last stop in trying to resolve these cases, can leave survivors feeling revictimized.”
Terms of the settlement were not disclosed.
The alleged abuse occurred when the plaintiff was an altar boy at St. Anne Parish in Chicopee, Massachusetts when he was from 9 to 11 years old. Weldon served as bishop from 1950 until 1977 and died in 1982.
Before the lawsuit was even filed, a retired Superior Court judge hired by the diocese found that claims of abuse regarding Weldon were “unequivocally credible,” and that there was a “reluctance to fervently pursue an evaluation of allegations against (Weldon) due to his prominence and revered legacy in the religious community.”
“The fact that Mr. Doe was forced to pursue litigation in the face of the report prepared by retired Judge Peter A. Velis, confirms the Church’s continuing failure, despite protestations to the contrary, to accept responsibility for the atrocities committed,” Nancy Frankel Pelletier, a lawyer for the plaintiff, said in a statement.
Bishop Byrne commended the plaintiff for coming forward and said the church has learned how to better respond to abuse allegations. Concealing or dissuading anyone from reporting abuse will not be tolerated, he said.
“It is Mr. Doe’s hope that Bishop Byrne’s statement will be heeded, and that no other survivor will be revictimized for speaking their truth,” Pelletier said.
The diocese fought to have the suit dismissed based on charitable immunity and the doctrine of church autonomy, derived from the First Amendment, even taking their case to the state’s highest court. The Supreme Judicial Court, however, last July ruled in the plaintiff’s favor.
