2.Evidentiary Hearing on All-Hands Meeting Clips

MS. KUDLA: Your Honor, for the next witness the government intends to offer a limited number of clips from the all-hands meeting that was recorded in reference on cross-examination, and I believe we had raised this in our motion in limine and provided two bases for the admission of those clips, pursuant to 801(d)(2)(D) as a statement of an agent and also 801(d)(2)(E) as a statement of a coconspirator. At the time your Honor deferred ruling on that until you could hear more further trial testimony.

We now believe that the record supports three independent and equal bases for admission of these clips, the two that I have just mentioned, and now that Ms. Ellison has cross-examined specifically as well, under 801(d)(1)(B) as a prior consistent statement. She has testified today that she learned about the investigation after the all-hands meeting.

In light of that, on November 9, the time that she talked to the employees, she discussed the situation and who was involved and named the people who were aware of the individuals who had knowledge of Alameda borrowing FTX customer deposits to repay its loans.

Now, your Honor, in the transcript, as a statement of an agent there has been ample evidence --

MS. KUDLA: Your Honor, in order for this exception to apply, there has to be the existence of an agency relationship, the statement was made during the course of the relationship, and it relates to the scope.

And here what we have is, we have the existence of an agency relationship. The principal here is Mr. Bankman-Fried, and his agent is Ms. Ellison. She has stated in the testimony that although she handled day-to-day decisions for any major decision, she would always run them by Sam, and she would always ultimately always defer to Sam if he thought that Alameda should do something.

Specifically with respect to this all-hands meeting, she said, with that, she consulted the defendant's input because she generally sought his input on important decisions at Alameda, and she thought like what to tell Alameda employees about what was happening was one of those important decisions.

The other important thing about this rule is that she just has to have the authority to take the action with which the statements relate. It does not have to be authorized by the principal itself.

And here Mr. Bankman-Fried, as Mr. Everdell has acknowledged, was aware that she was going to have this meeting with her employees. She has testified that this is a biweekly Alameda employee meeting and that it was going to happen. She was going to address all employees. He did not seek to remove her as CEO at that time. He did not seek to prevent her from addressing the group in the scope of her employment as CEO to address these employees. Instead, he provided input.

So at that point in time, when she was addressing these employees about what was going on, she was doing so within the scope of her employment at Alameda, as it has been described in the testimony.

MS. KUDLA: Correct. These are the clips that the government intends to play, government Exhibits 433A through F.

What you will notice here is that these clips are limited to very specific ways that Alameda had -- describing Alameda's borrowing of FTX customer deposits to repay the loans. It explains that that means of misappropriation was not through the spot-margin program, which has been alluded to by the defense, it goes to the fact of what Alameda used those customer deposits for, and then it goes to who knew that Alameda was using FTX customer deposits.

MS. KUDLA: I am going to focus right now on 801(d)(2)(E) for statements in furtherance of the conspiracy by a coconspirator.

The evidence at trial has already established that Mr. Bankman-Fried wanted to keep Alameda afloat, wanted to keep it going. One of the ways that that was occurring was by keeping Alameda employees at Alameda in processing customer withdrawals at that time.

We have evidence in the record talking about the fact that this was not the first occasion that had occurred in Alameda. Ms. Ellison testified that when she began her employment in 2018, she found out that there was a similar incident. Investors had left. Half of the employees had left. By not telling her that, she accepted employment. She continued to work at Alameda.

Now we are in 2022. We have testimony from Gary Wang saying, on November 12, that the defendant instructed him to transfer the remaining customer assets to the Bahamian authorities because, quote, they seemed friendly and seemed willing to let him stay in control of the company.

MS. KUDLA: Evidencing that Mr. Bankman-Fried's intent was to keep Alameda going.

And the statements that we see in Government Exhibit 414 is the single chat with Ms. Ellison and the defendant where he responds that she should add that there may be a future opportunity of some sort for those who are excited, and Ms. Ellison just testified that it would be helpful to have Alameda employees help wind down the company or -- and she also during this meeting referenced the points made by the defendant in this very text.

I think this goes to the fact that it is in fact coconspirator statements being used in furtherance of the conspiracy, which is to keep Alameda afloat while there are opportunities to ensure that potentially the Binance deal goes through, that the customers get paid back, which would lessen the chance of an investigation or anything else.

MS. KUDLA: Your Honor, Rule 106 is not a mechanism to basically bypass the hearsay rules on self-serving testimony, and that's what this is here. All of the clips that the government is introducing are firsthand knowledge from Ms. Ellison about Alameda's actions.

Here in this, which occurs an hour later from -- approximately an hour later from the first statements that you see in 433A, Ms. Ellison is being asked about the mindset of other crypto lenders. She is being asked to opine about their mindset, which is directly in conflict with your Honor's motion in limine ruling that the idea of the gullibility or negligence of the victims is simply not relevant to criminal intent here.

This does not complete in any way the clips that the government is choosing to put into evidence, and it's simply intended to go through to lenders such as Celsius or Three Arrows Capital, what they would have been looking at when lending money to Alameda. That's, you know, not within the clips that we are admitting.

MS. KUDLA: Your Honor, can we address 415B.

The government's position is that if this is being admitted to show Ms. Ellison's then existing mental state, she was on cross-examination for six hours. They clearly could have asked her about that. Now you are going to have a witness who cannot comment -- they can comment on her demeanor during the meeting, but they certainly cannot comment on her mental state. If they were going to elicit this, they should have done it on cross-examination.