But the FTX co-founder is now locked up inside Brooklyn’s Metropolitan Detention Center, a notorious facility for defendants awaiting trial on federal charges. Bankman-Fried’s $250 million bail package was revoked last week after Judge Lewis A. Kaplan in Manhattan found he likely attempted to tamper with two witnesses.
The change will be a major adjustment for the 31-year-old, who as recently as December was living in a $40 million beachside penthouse in the Bahamas. It will also present a challenge for his legal team, who have leaned on Bankman-Fried on a daily basis to sift through company documents and explain the complex, inner-workings of his former cryptocurrency exchange.
Bankman-Fried, who has pleaded not guilty to fraud, is accused of orchestrating a multibillion scheme at FTX and misusing customer funds to splash on property, political donations and high-risk trading. His spokesperson declined to comment Monday.
The latest misstep was enough to land Bankman-Fried in jail last week. Dressed in a suit and tie in federal court on Friday, Bankman-Fried twisted a yellow post-it note between his fingers as the judge revoked his bail. US Marshals approached him as Kaplan left the room, instructing him to take off his jacket, tie and shoelaces.
Bankman-Fried’s mother Barbara, who was seated in the public gallery, tried to approach her son but was told to stand back. She cried, comforted by her husband, as Bankman-Fried emptied his pockets and was taken out a side door.
Building His Defense Case
After a six-mile drive with authorities that night, Bankman-Fried arrived at the MDC, which the judge conceded was “not on anybody’s list of five-star facilities.” One of almost 1,600 inmates, Bankman-Fried will likely be confined in a dormitory-style cell in one of 28 housing units.
Asking to keep Bankman-Fried out of the facility, his attorneys said the lack of internet access was a major problem. Bankman-Fried had to prepare his own defense and to do that he needed a laptop to review the “voluminous and complex” materials in the case, attorney Christian Everdell wrote in an Aug. 1 letter to the judge.
“This is not about white-collar defendants getting ‘special treatment’ because their cases involve numerous documents, as the government claims,” Everdell wrote. Although judges can make an order that Bankman-Fried to keep his laptop, he can only use it in the visitor’s area. Everdell said that a staffing crisis at the MDC, however, meant inmates were routinely locked in their cells.
Kaplan suggested Bankman-Fried keep his own hard drives in his prison cell as an alternative to using the internet to access discovery. But the government said transferring the data could take “weeks” due to the sheer volume of information. Kaplan also said he would also “entertain an application” for Bankman-Fried to spend time at his attorney’s offices. But that is fraught with security risks, the government warned.
Another option is to move Bankman-Fried to the smaller Putnam County Correctional Facility in upstate New York. The medium-security prison, in the town of Carmel Hamlet, houses fewer than a tenth of the inmates as the MDC. The state-run facility would allow him to keep an internet-enabled laptop, federal prosecutor Danielle Sassoon said last week.
Kaplan sent Bankman-Fried back to jail after repeated complaints from prosecutors about his conduct, including attempts to tamper with potential witnesses. Prosecutors say he sent messages via the Signal app to FTX’s former US general counsel to “vet things with each other” and leaked diary notes by former Alameda Research Chief Executive Officer Caroline Ellison to the New York Times in an attempt to discredit her. Bankman-Fried denied witness tampering.
Peanut Butter, Grits
The move to the MDC and status as a white-collar defendant has put a spotlight on the harsh conditions lesser known inmates are subjected to every day at the facility.
A sprawling industrial site in Brooklyn’s Sunset Park that was home to British socialite Ghislaine Maxwell throughout her sex-trafficking trial, the MDC has had its fair share of controversy. Maxwell fought for months to be released from the facility, complaining of starvation and mistreatment.
In 2019, inmates had to endure freezing conditions for days after an electrical fire sparked a power outage. Two years later, in response to an inmate’s “disgusting and inhuman” treatment at the MDC and the now-shuttered Metropolitan Correctional Center in Manhattan, former chief judge Colleen McMahon said the facilities were “run by morons.”
“The single thing in the five years that I was chief judge of this court that made me the craziest was my complete and utter inability to do anything meaningful about the conditions at the MCC, especially at the MCC and the MDC,” she said at 2021 hearing.
After they have been vetted by authorities, his parents and a handful of friends will be allowed to see him at the MDC for one-hour visits. Money deposited into his inmate account can be used to buy small luxuries, like peanut butter, instant grits and playing cards. On Monday his attorneys asked for a court order forcing the MDC to give Bankman-Fried his daily medications.
