4.Stipulation and Exhibit-Admissibility Hearing
82 lines(Witness excused)
JUDGE KAPLAN: It seems like a good time for a break.
Counsel, stay.
(Jury not present)
JUDGE KAPLAN: May I know why we just did that?
MR. RAYMOND: Your Honor, we had tried to reach a stipulation.
JUDGE KAPLAN: Mr. Everdell, why did we just do that?
MR. EVERDELL: Your Honor, it's really the government's case to put on. I assumed that they were going to introduce metadata that somehow showed something about how maybe my client interacted with certain documents, but he wasn't able --
JUDGE KAPLAN: And the metadata came in and you wouldn't stipulate to it.
MR. EVERDELL: Your Honor, he wasn't able to explain what the metadata meant.
JUDGE KAPLAN: Yes, I understood that. That only makes it worse.
Where did he fly in from?
MR. RAYMOND: Texas, your Honor.
JUDGE KAPLAN: This is a joke.
MS. SASSOON: Your Honor, the exhibits for the next witness, do you want to take it up at the end of the break?
JUDGE KAPLAN: No. We will do it now.
We had a witness this morning, who knew absolutely nothing and spent the time saying I had nothing to do with any of that, read documents that are public records. And this afternoon we fly somebody in from Texas to put in documents about what he knows nothing or next to nothing that are obviously stipulatable.
We have 18 people devoting time here to this case and it's really a crime, that part of it. Obviously, it's a serious case. Obviously, there are all kinds of important things to be determined. But lawyers are supposed to do a little better than this. I am talking to both sides.
What are the evidence problems here?
MS. SASSOON: Just to preview, we are going to be calling a law enforcement witness and admitting certain Twitter exhibits through that witness, and I do intend to have the witness explain certain things about the tweets and to read some tweets. I don't intend to belabor the point. We are going to finish this witness and another by the end of the day. We only have two more witnesses tomorrow, Can Sun and Boroujerdi, and we expect to end well before the end of the day tomorrow.
With respect to this witness, I handed you up several exhibits that the defense is objecting to. These are direct messages between the defendant and another Twitter user @KelseyTuoc. I think the defense has some objections they wanted to raise.
JUDGE KAPLAN: Let's hear them.
MR. EVERDELL: Yes, your Honor. This is Government Exhibits 803A through D. We both object on both relevance and 403 grounds.
Your Honor, if you look at these statements, these are all messages with this person Kelsey Tuoc with the defendant, they are all from a date of November 16, 2022. This is after the alleged conspiracies charged in the indictment were over.
And so it appears that the relevance of these documents, if any, are going to a state of mind at the time the statements were made, but that isn't relevant or probative of his guilt at the time that the conspiracy was going on.
In addition, your Honor, we think that the probative value is substantially outweighed by the prejudicial effect because these are communications he is making with someone who he knew for a decade, who he considered a friend, and these are just off-the-cuff musings about past events that we think were devoid of context that could be substantially misconstrued by the jury. We think that the first is really simply the defendant talking about how history may be written by the winners, but it contains some inflammatory language that we think is more prejudicial than probative.
JUDGE KAPLAN: This is 803(a)?
MR. EVERDELL: Yes, your Honor.
JUDGE KAPLAN: What are you talking about here?
MR. EVERDELL: This is part of the communication with Kelsey Tuoc. She is asking about some statements that Mr. Bankman-Fried has made in the past about -- there is some swear words in here, your Honor. I will block them out. It said: Doing something unethical, s-h-i-t, and what he said about doing that sort of thing in the past, and it then moves into a discussion with CZ, head of Binance.
JUDGE KAPLAN: Speak a little more slowly.
MR. EVERDELL: Yes, your Honor.
Then it moves into a discussion about CZ, the head of Binance, who there has been testimony about. He makes a statement here a month ago: CZ was a walking example of don't do unethical s-h-i-t, or your money is worthless.
JUDGE KAPLAN: I have heard it before.
MR. EVERDELL: I'm happy to say it out here. Unethical shit or your money with worthless. Now he is the hero. Is it because he's virtuous or because he had a bigger balance sheet.
JUDGE KAPLAN: Slower. I can't take it this fast.
MR. EVERDELL: I will slow down.
JUDGE KAPLAN: I listen to 33 RPM records, not 45.
MR. EVERDELL: I'll slow it way down, your Honor. My apologies.
JUDGE KAPLAN: Nobody listens to records.
MR. COHEN: I may be the only one who remembers 33, your Honor.
JUDGE KAPLAN: You may remember 78s. We both do.
MR. EVERDELL: I hate to swear yet again, but I will do it slower this time.
A month ago, CZ was a walking example of, quote, don't do unethical shit, or your money is worthless.
JUDGE KAPLAN: We are talking about the guy from Binance.
MR. EVERDELL: That's correct, your Honor.
Now he's a hero. Is it because he's virtuous or because he had a bigger balance sheet, and so he won.
The discussion continues about this sort of thing.
This seems to be just a reflection, sort of musings on nothing more than the concept of history being written by the winners, let's call it, but it has enough inflammatory language in here that I think it's prejudicial to the defendant to put this in front of the jury when they are discussing topics like unethical shit.
So I think that the topic of the conversation has very little probative value, but the rhetoric and the language used has prejudicial effect, and it's all after time period.
JUDGE KAPLAN: That's 803A, several exhibits.
MR. EVERDELL: Correct, 803A.
JUDGE KAPLAN: Next.
MR. EVERDELL: 803B is, again, more sort of musings about the past and about just his sort of -- the issue here is that they are speaking in terms of -- Kelsey Tuoc says: Did they feel, Gary and Nishad, ashamed and guilty because all the customer deposits are gone?
We are using the word guilty. It is not in the sense of legal guilt. It's in the sense, I guess, of some sort of personal feelings of guilt.
Again, these are sort of just abstract musings after the fact, your Honor, after the alleged conspiracy is over. And because you have the word guilt, guilty in this tweet or in this Signal, I guess, it's very prejudicial and it is again not very probative of the defendant's state of mind.
JUDGE KAPLAN: How does it stack up against the fact that they both pleaded guilty to multiple felonies and that's before the jury?
MR. EVERDELL: Understood, your Honor. This is, of course, the defendant making a comment on these facts himself.
JUDGE KAPLAN: What you just read to me I thought was Kelsey Tuoc. Is that wrong?
MR. EVERDELL: If you follow the thread --
JUDGE KAPLAN: At one point your client says that Nishad is the same, then guilty. That's really prejudicial in light of the fact that Nishad just got off the stand and pled guilty to six felonies or seven.
MR. EVERDELL: Understood, your Honor.
JUDGE KAPLAN: What about the next one?
MR. EVERDELL: So this, your Honor, is a discussion about interactions with regulators and regulations. Kelsey Tuoc says: You said a lot of stuff about how you wanted to make regulations, just good ones. Was that pretty much just PR too? There is some statements at the beginning, and then at the end it says: Yeah, just PR. I'll say another swear word, because I'm sure you've heard it before, your Honor. Fuck regulators.
This, I think, again, is Mr. Bankman-Fried after the fact expressing some frustration about regulators at the time. I believe the government might want to use this to show that his efforts at engaging with regulators prior to this was all a sham, which it wasn't.
JUDGE KAPLAN: Which might gain some support from his saying, yeah, just PR in relation to his efforts with regulators.
MR. EVERDELL: Your Honor, it's being spoken at a time after the conspiracy at a time when he may have developed some frustration with what had happened before, but it doesn't reflect his honest intent at the time when he was engaging with the regulators. This is an after-the-fact statement maybe about his mental state on November 16, but it's not probative of his mental state prior to November 16 and it could be taken out of context, and the jury could use it inappropriately against my client.
JUDGE KAPLAN: Let me hear from the government, please.
MS. SASSOON: Your Honor, these are admissions by the party opponent. And just to take one obvious example, courts routinely admit postarrest statements which are after the fact where a defendant is making admissions.
The fact here that, as defense counsel said, he's talking to someone he trusted in what he thought was a private context is highly probative that what he's saying here is truthful.
The government has offered evidence of the defendant's public representations. This shows the falsity of many of those representations. The fact that it's prejudicial is because it's inculpatory, but that does not make it unfairly prejudicial.
And keep in mind too that although this is after the collapse of FTX, contemporaneous with these messages, the defendant is going out and making public statements saying, I did nothing wrong, and here he is simultaneously in these private communications showing a very different face in private. It's highly probative of his guilt and it's admissible under the hearsay rules.
JUDGE KAPLAN: What was the date of the bankruptcy?
MS. SASSOON: The 11th.
JUDGE KAPLAN: I'll let you know when I come back downstairs.
We have one other one, don't we, 881?
MR. EVERDELL: Very quickly, your Honor, and this is related.
Government's 881 is the opening page of Kelsey Tuoc and it's a hearsay document, your Honor.
MS. SASSOON: Your Honor, we are seeking to admit this for its effect on the listener. The final exhibit relating to Kelsey Tuoc is a message from the defendant saying: I thought that was all off the record, can you please take it down. And that's because Kelsey Piper, the journalist associated with this account, published an article that quoted many of these messages.
JUDGE KAPLAN: I don't see that in the exhibit.
MS. SASSOON: It says: Kelsey Piper, senior writer at Vox's Future Perfect.
The defendant was corresponding with this person on Twitter and, therefore, would be aware that she was a writer at Vox and it puts in context his statement to her saying, I thought this was off the record. You can't understand his message without appreciating that he understood her to be a reporter.
JUDGE KAPLAN: Where do I find the statement, I thought this was off the record?
MS. SASSOON: I believe that's 803D.
Just one more comment on the messages about Nishad being guilty. Obviously, the message sent by Kelsey Tuoc in the form of a question, the defendant adopts it when he writes back: Yeah.
JUDGE KAPLAN: I'll let you know.
(Recess)
JUDGE KAPLAN: I have reviewed 803A, B, C, D, and I think there is a fourth, 881.
MR. EVERDELL: Yes, your Honor.
JUDGE KAPLAN: And the defense objections are overruled.
Let me say a minute about what happened a moment ago.
Ms. Katz was called by the government this morning. It was perfectly obvious, and she made it clear in response to almost every question, whether it was responsive or not, that she knew nothing with anything that happened here, nothing whatever, and she was called essentially as a manikin to read to the jury documents in evidence and the transcripts of videotapes in evidence, and that was a waste of her time, it was a waste of the jury's time, and it was a waste of everybody else's time. I expect different behavior from counsel.
And then we are treated to this Mr. Gaddis being hauled up here from Texas to authenticate metadata on, I believe it was five documents, maybe it's seven or eight, as to which there was no dispute at all to get them into evidence.
Now, the defense was supposed to have had all of the government's exhibits a long time ago.
Did you have them, Mr. Everdell?
MR. EVERDELL: Your Honor, this particular metadata we only got very recently.
JUDGE KAPLAN: When?
MR. EVERDELL: It was produced a few days ago.
JUDGE KAPLAN: But you had it, you knew what it was, and I assume you were asked to stipulate to the admissibility of the metadata.
MR. EVERDELL: We were not, your Honor.
JUDGE KAPLAN: You were not.
MR. EVERDELL: No.
JUDGE KAPLAN: Did you offer it?
MR. EVERDELL: Your Honor, the issue of metadata was being -- let me step back.
We have had discussions about metadata before. I see the government is shaking their head. I want to be accurate about this. There were discussions about stipping to metadata before. We got new metadata. We did not have discussions about stipping to the new metadata. I didn't know exactly what the testimony was going to be because it wasn't clear from the 3500 material whether there were things that could be disputed.
JUDGE KAPLAN: Did you ask? Did you ask? I expect lawyers to talk to each other. Frankly, earlier in this case that was going fine, and I appreciate that, and I expressed that thought earlier more than once.
But the idea of hauling this guy up here from Texas and treating the jury to whether those exhibit numbers could be read three times or four times, or whatever it was, was just unreasonable. Obviously, there is some fault on both sides, now that I hear you, but these people are giving up weeks of their lives, and I care about that, and in the abstract I'm sure you all do too. But it's a hard-fought case. But you got to get over that and that goes for both sides.
MR. EVERDELL: Understood, your Honor.
JUDGE KAPLAN: We are not going to do this again.
Let's get to the next witness.
MS. SASSOON: The government calls Shamel Medrano.
(Jury present)
JUDGE KAPLAN: Defendant and the jurors -- SHAMEL MEDRANO, called as a witness by the government, having been duly sworn, testified as follows:
JUDGE KAPLAN: The defendant and the jurors all are present, as they have been throughout.
Ms. Sassoon, you may proceed.
MS. SASSOON: Yes, your Honor.
The government calls Shamel Medrano.