Comment by jmyeet | Hacker News Reader

Comment by jmyeet | Hacker News Reader

I want to contrast SBF's treatment at the hands of the government to that of Carl Nelson. This is a name you probably don't know but let me summarize [1].

Nelson was an Amazon employee who worked on securing real estate deals for data centers. Based on an anonymous email sent to Jeff Bezos that Nelson was getting kickbacks on these deals where Amazon was being charged exorbitant leasing fees.

In 2020, the FBI showed up and seized (through civil forfeiture) the bank accounts and assets of Nelson, his wife, several associates and even his lawyers. What prompted this? It came to light later that Amazon's lawyers from a law firm named Gibson Dunn (who have been at the center of many controversies)met with the Department of Justice hundreds of times to get this outcome.

It turns out that the only way Amazon could get out of a bad deal was for someone to be charged with a felony. The one alleged here was deprivation of "honest services". It was on this basis the the FBI seized Nelson's assets. In doing so, Amazon falsely claimed they'd paid $16.5 million they had not paid.

After nearly 2 years and no charges being filed, the government returned a portion of the seized funds. It is alleged that Amazon made false represetnations (an actual crime) to the government and these formed the basis for the warrant to seize these assets. That warrant remains under seal. It's also alleged that Amazon lied about the leases they signed.

So, no charges filed (let alone a conviction) and all these assets seized under civil asset forfeiture, a regime that I personally think should be deemed unconstitutional as a clear Fourth Amendment violation. But alas, it remains the law of the land.

SBF has cleared stolen customer assets as CEO of FTX. Why exactly is the government not seizing every asset he owns, his parents own and his FTX associates own as here there is actually a good case that they are the proceeds of a crime?

[1]: https://www.bloomberg.com/news/newsletters/2021-03-15/the-st...

>Why exactly is the government not seizing every asset he owns

I find it utterly strange that people respond to injustice by asking why isn't more injustice being done, you know for equity?

I clearly stated I don't support the legal basis for civil asset forfeiture, particularly as its used in the US, specifically without filing charges or that the asset is the defendant so the government can launch a civil action against an asset for being suspected of being the result of a criminal action by its alleged owner.

It's even worse that law enforcement gets to keep the proceeds of seizing assets where there are no charges (let alone convictions) so we've added a profit motive for what should be unlawful search and seizure. Yay capitalism.

But that is the legal doctrine we operated under.

Unlike the Amazon case, there is a mountain of evidence against SBF, the new CEO has no doubt coopearted and provided ample docuemntation, there are 2 cooperating witnesses and charges have been filed. Through ownership of Bahamanian property (and who knows what else) there is a clearly evidence trail between FTX customer assets to SBF and SBF's parents and associates. It is all quite plausibly the proceeds of crime.

Basically, SBF walked into a bank, robbed it and then used the money he stole to post his bond.

SBF's case is not analogous to a bank robber paying his bail out of the duffle bag used in the robbery. It is plausible that SBF had assets prior to misusing customer funds. The presumption of innocence should not just be a nice story we tell ourselves.

That might be the logical position but it isn't the legal position when it comes to criminal proceeds in fraud and other cases.

Imagine you saved $100,000 from working and spending less than you earned, all completely legitimiately and legally. Now imagine that you make another $100,000 from, say, importing and selling a few pounds of cocaine.

You might think the government may come along and seize $100,000 from you. No, they'll seize everything. It's really difficult to separate money and the government won't even try. All of that could be forfeit.

Let me give you another example: imagine you're in charge of purchasing for a company. You send out and pay invoices on that company's behalf. Imagine you skim off the top and add $1,000 in charges or increased prices or fake items to a $20,000 invoice. You send out a $21,000 invoice, keep $1,000 and then pay the company $20,000. This is fraud. Imagine you get caught. You won't be on the hook for $1,000. You may be on the hook for the full $21,000. The entire invoice is fraud at that point.

Now this may seem unfair or unreasonable. I won't argue that. I'll simply say, that's not how it works. So once SBF committed fraud, which seems to be the case, he basically has the reverse Midas touch. Everything he touches from that point becomes tainted and the government and the courts are within their rights to seize it.

If his parents accepted any proceeds of that fraud, even unknowingly, the government can start seizing their assets too. In the Nelson case I talked about originally, the government seized the bank accounts from Nelson's lawyers. Think about that.

As others have commented correctly and more pithily than I have: the issue isn't is civil asset forfeiture justified (it isn't) but why those same rules are being applied inconsistently, much to SBF's benefit as he's walking free today.

Presumably the government would then return the assets to the creditors. Do you think this is unjust?

It's not that they want the same injustice happening both ways, it's that injustice seems to only happen to poorer less well-connected folk. The justice system is not supposed to favour people based on connections and/or wealth.

There's a reason people say crimes that are punished with a fine are laws that only apply to poor people.

Yes, and there are two ways we can respond to such a discrepancy. But the trend is that people seem more concerned about equity of punishment rather than improving the system for everyone. The words people use when calling out the bias do matter. Instead of asking why this rich person is getting special treatment, we should ask why aren't these poor people also being treated humanely.

But it's not about his wealth, it's about his political connections.

If he was a wealthy donor to Trump in an identical case he'd be rotting in Rikers with no hope of bail.

You're seeing inconsistent treatment but you're mistaking the cause. SBF gave significantly to both Democrats and Republicans in the last election cycle. He was just more vocal about his Democratic Party contributions. Many (including me) seem to think there's no principle involved in any of this. It was simply an attempt to influence policy and get legislation that favored FTX and hampered or killed his competition. It's cCapitalism 101.

Take the Chevron case I mentioned in another comment. Deputizing an oil and gas law firm to criminally prosecute someone in the US for what they did in Ecuador began in the Trump administration. Biden's DoJ could intercede in the case and dismiss it. But they haven't. So there's no difference here between the two parties.

You'llsee that a lot. When it comes to any issue like this the government (including the White House, Congress and the courts up to and including the Supreme Court) will side with the wealthy most of the time.

Go back and look at any issue you might think is a partisan issue where you think someone is getting persecuted politically and really examine it through the lens of who has the money in that situation. That will determine who these institutions side with more often than not and way more than any supposed political leanings.

The reality is that SBF is getting the kid glove treatment because of his connections.

Posters here are merely pointing that out.

>law firm named Gibson Dunn (who have been at the center of many controversies)

Gibson is one of the most respect law firms in the United States. It is certainly possible that they took some sort of nefarious action, but I find that unlikely, and see no suggestion of proof here.

An article quotes this:

>>Carleton Nelson denies the allegations. His lawyers have said in court that broad allowances for outside work in his Amazon employment contract gave him leeway to do business with Amazon clients and customers.

Well, sounds to me like Nelson took the kickbacks and the argument is whether he did a good enough job papering them to look like real transactions.

https://www.geekwire.com/2022/former-seattle-entrepreneur-an...

As for no damages:

>> Amazon notes that its initial calculation of damages included damages attributable to inflated rents and fees it had agreed to pay to lessors that were controlled by the defendants.... Amazon has now been able to negotiate amendments to the leases, which has mitigated, but not completely eliminated these damages

So seems like the problem was resolved because the fraud was discovered and remedied, not that there was no fraud to begin with.

https://twitter.com/Amy_K_Nelson/status/1489227415108919297/...

> Gibson is one of the most respect law firms in the United States

Notable cases [1] includes:

> The firm is representing Chevron in its long-running, $27 billion environmental dispute in Ecuador

This is the case of Steven Donziger. I highly recommend you look into it because it's another travesty of justice. Donziger helped the Ecuadorian government secure a multi-billion judgement against Chevron for pollution. Chevron responded by finding a judge to appoint Gibson Dunn to engage in private criminal prosecution alleging fraud in the US for a case in Ecuador. Donziger spent years in home detention and had an $800,000 bond for misdemeanour in refusing to turn over his laptop to that court even though said laptop was clear work-product (and thus covered under attorney-client privilege) with the Ecuadorian case.

> The firm represented George W. Bush in Bush v. Gore

Okay...

Here is perhaps the most disturbing entry:

> Gibson Dunn is representing the plaintiffs in Haaland v. Brackeen pro bono in seeking to overturn the Indian Child Welfare Act.

The law firm isn't even paid on this one. Free of charge they are trying to end tribal sovereignty [2].

> Well, sounds to me like Nelson took the kickbacks

Why does it sound that way? No, seriously. Amazon has seemingly made false statements regarding money paid ($16.5m) and kickbacks received without providing any evidence. Any claims they have made would be documented in the affidavit, which both Amazon and the DoJ have fought to keep sealed.

And if that's the case why were no charges ever filed?

This is an opportunity for introspection here. Please, for your sake, ask yourself why your kneejerk reaction here is to side with Amazon.

[1]: https://en.wikipedia.org/wiki/Gibson_Dunn#Notable_cases

[2]: https://lakotalaw.org/news/2021-09-17/icwa-sovereignty

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