When Sam’s case was assigned to Judge Lewis Kaplan, a criminal defense attorney who practices in the SDNY said to me, “That was really bad luck. Kaplan is awful to criminal defendants. One of the two worst judges in the Southern District.” Of course, what it is bad for the defense is good for the prosecution, at least under the prevailing mortal combat view of criminal justice. But even the prosecutors in the FTX case seemed surprised by how lucky they got with Kaplan, and had to scramble to play catch-up, repeatedly, over the course of pretrial motions and the trial.
After a spate of pretrial rulings from Kaplan in June 2023 that all but guaranteed that Sam could not mount an effective defense and still with four months to go until the trial, I asked one of Sam’s lawyers if there was any hope. His answer was not reassuring. “Sure,” he said. “There’s always the appeal.”
Joe, Sam, and I may have been the only people in the courtroom not surprised when Kaplan sentenced Sam to 25 years. Sam had predicted 20 to 30 years. He was so confident that nothing anyone could say on his behalf would make any difference to Kaplan that he asked us not to solicit pre-sentencing letters on his behalf. “Anyone who writes a letter for me will just be exposing themselves to public shaming without doing me any good,” he said. We insisted on soliciting them nonetheless, knowing that Kaplan would pounce on the absence of letters to observe that Sam was so unredeemable a human being that he couldn’t get a single person to write on his behalf. Many of the letters are quite moving. Kaplan gave no indication of having read them.
People who have worked with Kaplan going back to his days as a partner at Paul Weiss have described him as smart, arrogant, and abusive. (By coincidence, I overlapped with him for a couple of years at Paul Weiss when I was a young associate and he was a litigation partner, but never worked directly with him.) But what he did to Sam was extreme even by his own measure. He clearly misread traits of Sam’s that are characteristic of neurodiversity—difficulty making eye contact, the need to clarify vague questions before answering them, a propensity to give very detailed and factually precise answers—as insolence and evasiveness. But Sam essentially didn’t open his mouth until two-thirds the way through the trial, ten months after Kaplan was assigned to the case and long after Kaplan had set his sights on destroying him.
Kaplan’s hatred of Sam was instantaneous, visceral, and immune to facts and reason. He was Captain Ahab and Sam was his Moby Dick, an avatar of evil rather than a real, live, human being. In his sentencing speech, Kaplan disclaimed thinking Sam was a villain. But everything else he said, along with the 25-year sentence he handed down, was more befitting a cold-blooded murderer than someone who had lived an unblemished life up until that point, devoted to doing good in the world, and was convicted, essentially, of failing to collateralize a loan appropriately, or maybe misrepresenting the full extent of the risks it posed to customers. In Kaplan’s bizarre comic-book version of the world, Sam was a Lex Luthor-like evil genius who kept Caroline Ellison in thrall (he was “your kryptonite,” as Kaplan said at her sentencing hearing), making her do the terrible things she confessed to doing as the price of obtaining a cooperation agreement from the government. However mad Ahab might have been to seek revenge on a dumb beast, at least he had a reason for picking his victim: Moby Dick had chewed off his leg on a whaling voyage forty years earlier. I don’t know why Kaplan picked Sam.
A few months after the trial, someone alerted me to another notorious Kaplan case, Chevron v. Donziger. The case, which dragged on for 12 years, finally concluded shortly before Sam’s trial. Kaplan’s conduct in the Donziger case was so outrageous, bordering on unhinged, that it provoked world-wide condemnation by lawyers’ groups and led both the Second Circuit and two Supreme Court Justices, in a rare move, to slap him down for two different lawless power grabs. The parallels to Sam’s case are striking: the same seemingly motiveless malignancy, the same iron determination to destroy the defendant, the same contempt for any legal and factual obstacles in his way.
Numerous books and articles have been written about the Donziger case. Here is a brief summary, drawing (among other sources) on the case study in Engstrom, Legal Ethics: The Plaintiffs’ Lawyer.
In 2003, a group of environmental lawyers led by New York lawyer Steven Donziger filed a class-action lawsuit against Texaco (later merged into Chevron) in Ecuadorian courts for extensive environmental damage and serious health problems alleged to have resulted from Chevron/Texaco’s drilling operations in Ecuador from the 1960s to the 1990s. In 2011, the plaintiffs obtained a $8.6 billion judgment against Chevron, in what was heralded as a landmark environmental victory. Anticipating an unfavorable ruling by the Ecuadorian court, in 2010 Chevron filed suit against Donziger in the SDNY in a preemptive move to discredit him and any unfavorable decision that might issue from the Ecuadorian court. Kaplan was assigned to the case. In a discovery order that one appeals court described as “unique in the annals of American judicial history,” Kaplan granted Chevron access to all of Donziger’s legal files—some 200,000 pages in all—as well as his tax returns, bank account information, and personal computers. When an attorney for Donziger protested that this meant that Chevron’s lawyers had access to his private communications with his wife as well as many other matters unrelated to the case, Kaplan responded, “He doesn’t have any other matters. . . . This is his life.”
Just as he coached the prosecution on arguments to make in Sam’s case, Kaplan recommended to Chevron’s lawyers that they consider bringing a retaliatory RICO action against Donziger. They obliged. As soon as they did, he issued a world-wide temporary injunction preventing Donziger and his fellow attorneys from enforcing the Ecuador court’s judgment anywhere in the world while the RICO suit was pending. Chevron Corp. v. Donziger, 768 F. Supp. 2d 581 (S.D.N.Y. 2011). That last step was too much for the Second Circuit, which dissolved the injunction in a decision that called out the audacity of Kaplan’s order: “Nothing in the New York statute, or in any precedent interpreting it, authorizes a court to enjoin parties holding a judgment issued in one foreign country from attempting to enforce that judgment in yet another foreign country.” Chevron Corp. v. Naranjo, 667 F.3d 232, 244 (2d Cir. 2012).
In March 2014, after a lengthy bench trial on Chevron’s RICO claim against Donziger, in which Kaplan repeatedly disparaged Donziger and expressed open sympathy for Chevron, he found Donziger guilty of a massive racketeering scheme involving coercion, bribery, witness tampering, and money laundering. Concluding that the Ecuadorian courts were all corrupt, Kaplan permanently enjoined enforcement of the $8.6 billion judgment against Chevron in the US.
But what really outraged lawyers was what happened next. Kaplan ordered Donziger to surrender all of his personal electronic devices and digital accounts to a forensic expert for imaging, pay Chevron $3.4 million in attorneys’ fees, and surrender his passport. When Donziger refused to comply, citing various violations of his legal rights, Kaplan referred the matter to the SDNY, recommending that they prosecute Donziger for criminal contempt—virtually unheard of in a case of this nature. SDNY declined to prosecute, whereupon Kaplan drafted a six-count criminal contempt charge himself and, in another unprecedented move, appointed a private law firm, Seward & Kissel, to prosecute it. Seward & Kissel, it turned out, had represented Chevron as recently as the previous year. The partner in charge of the prosecution, Rita Glavin, consulted privately with Chevron’s lawyers, Gibson Dunn, throughout the fall as she prepared the case. Gibson Dunn insists that it “donated” the hours it spent in consultation with the Glavin team about the criminal prosecution. As Harvard Law Professor Charles Nesson remarked, “Chevron and Gibson Dunn have carried out their war against Donziger for years. The idea that Gibson ‘donated’ time is almost laughable.”
Kaplan had to recuse himself from the criminal contempt case because he was an interested party. But instead of allowing the new judge to be appointed by random assignment as required by SDNY rules, Kaplan handpicked a colleague, Judge Loretta Preska, to take over. Picking up where Kaplan left off, Preska ordered Donziger to post an $800,000 bond and placed him under pretrial house arrest with a GPS monitor—again unheard of for a Class B misdemeanor. Rejecting Donziger’s request that she withdraw from the case because her appointment had violated SDNY rules, she stated that “a court’s failure to follow the . . . prescribed procedures gives parties no basis for relief.” After a bench trial in which she found Donziger guilty of criminal contempt, she sentenced him to six months’ imprisonment—the maximum allowable sentence—on top of his by then two-year pretrial detention. In a statement worthy of Kaplan himself, Preska explained that “only the proverbial two-by-four between the eyes will instill in him any respect for the law.”
Donziger appealed his criminal contempt conviction to the Second Circuit. This time the court blinked, upholding the conviction in a 2-1 decision, with a blistering dissent from Judge Menashi. United States v. Donziger, 38 F.4th 290, 306-314 (2022). On a writ of certiorari to the Supreme Court, the Court declined to hear the case. In another blistering dissent, Justices Gorsuch and Kavanaugh wrote:
“However much the district court may have thought Mr. Donziger warranted punishment, [Kaplan’s actions] . . . broke a basic constitutional promise essential to our liberty. In this country, judges have no more power to initiate a prosecution of those who come before them than prosecutors have to sit in judgment of those they charge. Our Constitution does not tolerate what happened here.”
Kaplan’s reputation as a smart lawyer and a law-smart judge has, I suspect, insulated some of his more dubious decisions, including this one, from reversal by the Second Circuit. But cleverness is not the same as wisdom or an ethical compass. Based on the evidence of these two cases, Kaplan has lost his grip on both of those virtues. He also seems to have lost interest in dressing up what amounts to a brute power play in the respectable language of the law. Kaplan made some half-hearted, fitful efforts to justify his more outrageous rulings in Sam’s case, particularly when he realized (belatedly) that he might be courting reversal—what Sam’s appellate attorney colorfully described as “putting lipstick on a pig.” But most of the time he didn’t bother. He rubber-stamped every motion from the prosecution, never questioned their many facially implausible claims, and, in blocking most of the defense’s proffered evidence, defaulted to the conclusory assertion that exposing the jury to the evidence would be “more prejudicial than probative.” Judging by the evidence he blocked, what Kaplan meant by “prejudicial” was that it might lead the jury to conclude that Sam was innocent.
The list of Kaplan’s egregious conduct in the FTX case goes on and on, and explains why Sam’s appellate attorney made the rare request to the Second Circuit that if they overturn Sam’s conviction and order a new trial based on Kaplan’s many legal errors, a different judge be assigned to the case.
Among his many outrageous moves, Kaplan subjected Sam to an unprecedented and unconstitutional deposition in the middle of the trial. The purported reason—to provide Kaplan with the information necessary to decide whether to allow the defense to introduce evidence of FTX lawyers’ extensive involvement in setting up the financial arrangements the government was now alleging were fraudulent—was clearly pretextual. Defense counsel had already provided Kaplan with far more information than he needed to rule on the question or was entitled to ask for, and, in retrospect, it is clear he had already decided to bar the evidence. The only thing the hearing accomplished—and it was huge—was to give the prosecution a free preview of the defense’s case and a free practice run at cross-examining Sam. When defense counsel lodged a wholesale objection to the hearing at its conclusion, Kaplan gleefully announced that they had waived the objection by not raising it beforehand (something he had effectively prevented them from doing).
Kaplan announced late in the trial that he would not give the jury any instructions on on a crucial issue of UK law because defense counsel had failed to introduce any evidence concerning it. Sam’s lawyer immediately protested, “I don’t want to keep belaboring the point, your Honor, but . . . it is our view that there was a . . . submission with respect to the meaning of English law.” Kaplan responded, “Yes, I know there was.” That was it. No explanation, no apology, and no offer to reconsider his decision, given that the premise for it he now acknowledged to be false. Just “Yes, I know.” L’etat, c’est moi.
As trial observers reported, Kaplan “couldn’t or didn’t hide his disdain” for Sam from the jury. He repeatedly criticized Sam’s demeanor, made clear to jurors that he thought Sam was lying, and all but declared his guilt. He derided Sam’s claim that he did not run Alameda after stepping down as CEO as “a joke.” After a prosecutor described a tweet Sam sent as a misrepresentation, he stated, “Of course it is. It’s a misrep, no matter what [Bankman-Fried] says.” When discussing jury instructions, he quipped that the wire fraud standards “ought not to be much of a problem for the government because god knows there’s more than sufficient evidence.”
In justifying the 25-year sentence he imposed, Kaplan described Sam as having committed “the biggest political financial crime in history,” notwithstanding that the government withdrew the campaign finance charge before trial, and also cited to Sam’s lack of remorse. In the year and a half following FTX’s collapse, Sam had shown nothing but remorse for his management failures—so much so that a South Park episode made fun of him for it. What he hadn’t done was to admit guilt for the crimes he was charged with, because he knew he was innocent. After noting Sam’s lack of remorse, Kaplan immediately caught himself and added that of course he wasn’t referring to the fact that Sam had steadfastly maintained his innocence. That was his constitutional right and all that. But it is hard to conceive what else Kaplan could have meant by lack of remorse. Finally, Kaplan explained, the long sentence was necessary “for the purpose of disabling him . . . for a significant period of time” so that he would not be “in a position to do something very bad in the future.” What kind of human being thinks this is an appropriate reason to sentence a first-time, 32-year-old nonviolent offender to 25 years in prison?
Of all the mike-drop moments in the case, Kaplan’s order revoking Sam’s bail seven weeks before trial stands out for its thuggishness. The Bail Reform Act of 1964 creates a close to irrebuttable presumption that nonviolent defendants have to be released on bail pending trial. The reasons for it are many, and compelling. Whatever we call pretrial detention and however we justify it, we are putting people in prison who are presumed to be innocent. The public will construe the fact that a defendant is imprisoned prior to or during a trial as confirmation of his or her guilt. Finally and most significantly for many defendants, including Sam, it is close to impossible to prepare an adequate defense from prison, because of severe limits on access to lawyers, critical documents, and basic research tools. Thus, pre-trial detention always poses a serious threat to a defendant’s Sixth Amendment right to defend himself at trial, and thus is restricted to cases where release would pose an imminent, serious threat to the safety of the community.
From Sam’s second appearance in Kaplan’s court in January 2023, two weeks after his arraignment, Kaplan was clearly itching to revoke Sam’s bail. He finally got his chance—or more precisely manufactured it—six months later, when a New York Times reporter reached out to Sam for comments on a story he was writing based on excerpts from Caroline Ellison’s diaries that had just been leaked (almost certainly by the government in violation of their own internal rules.) Sam agreed to be interviewed and shared excerpts of some emails between himself and Ellison with the reporter. Unlike the documents the government leaked, the emails were rightfully under Sam’s possession and control, and he was entitled to share them if he wished.
When the Times article came out, the prosecution asked Kaplan to impose a gag order on Sam, arguing that the information Sam shared with the reporter was designed to intimidate Ellison out of testifying against him at trial. The government could not possibly have believed its own argument. Caroline knew she would face decades in prison if she reneged on her cooperation agreement. Faced with the choice nine months earlier, she chose to testify against Sam to save herself. There was no possibility that mildly embarrassing revelations from Sam would cause her to reconsider, and no possibility that Sam could have thought it might.
A day later, Kaplan notified both sides he was scheduling a hearing on July 26th on the government’s proposed gag order, but also asked them to be prepared to address whether Sam’s bail should be revoked instead.
This was one of many times that the prosecution had to scramble to catch up to Kaplan, concocting some explanation for why it had changed its mind in the five days since it filed the request for the gag order and now believed that “there is no set of conditions short of detention to assure the safety of the community.” The ostensible explanation for their change of heart? They were shocked, comma, shocked to discover while going over phone logs that were always in their possession that Sam had vigorously exercised his First Amendment rights to speak to the press over the previous six months. Not that there was anything wrong with that, they hastened to add, but it tells you you are dealing with someone who cannot be trusted to obey an order not to talk to the press going forward, should such an order be issued. That was good enough for Kaplan. Anything would have been good enough for Kaplan.
Kaplan scheduled a follow-up hearing on Aug. 11th on the prosecution’s belated motion to revoke Sam’s bail. There was little doubt after the July 26th hearing how he was going to rule. Having to sit through the Aug 11th hearing as Kaplan and Danielle Sassoon, the lead prosecutor in the case, rehearsed their reinvention of Sam as the anti-Christ was a Kafkaesque experience. For the prosecution, it was all theater. I’m skeptical Sassoon believed anything she said. I am certain that whether she did or not was irrelevant to her decision to say it. But Kaplan was a true believer. He knew he was crippling Sam’s ability to defend himself—he acknowledged it in various ways, including describing the detention center he was sending Sam to as a hell-hole—and he didn’t care. To the contrary, I presume that was the point of it from his perspective, as it was the point of the unbroken string of evidentiary rulings he issued blocking Sam from introducing virtually all exculpatory evidence in the case.
In support of his conclusion that Sam was a hardened criminal who could not be trusted to abide by a gag order—notwithstanding that as he and the prosecution both acknowledged, Sam had complied with every bail restriction placed on him to date—Kaplan cited the following incident.
In mid-February 2023, two months into Sam’s house arrest, Sam watched the Super Bowl from our home in California on an internet service he had paid for. As both the prosecution and Kaplan conceded, his doing so did not violate any bail restrictions placed on him at the time. His sin? The contract he signed with the internet provider restricted users from accessing the service outside the Bahamas, yet here he was accessing it from California. Here is Kaplan’s argument that this transgression justified revoking his bail:
“It’s certainly true . . . that his use of the VPN to watch a football game over an account that he wasn’t entitled to watch it over from the United States didn’t violate any of his bail conditions. It wasn’t even a big deal in and of itself, but there it is. He subscribed to this service from the Bahamas, then used a VPN to log into it as if he were in the Bahamas, when he was sitting in Palo Alto and could have watched the game on public television. It says something about the mindset.”
What it says about the mindset is that Sam is indistinguishable from 99.9 percent of people who subscribe to internet services, who either don’t know about any geographic restrictions in their licensing contracts that are not automatically enforced through technological barriers, or disregard them. Sam had a better excuse than most, since he had no other means of watching the Super Bowl. Contrary to Kaplan’s assertion, he could not have watched it on our TV, because Kaplan had ordered us to remove the TVs in our house a month earlier on the thought that an evil genius like Sam would figure out a way to deploy them to no good end. Kaplan’s shamelessness and bad faith in even raising this episode as a justification for revoking Sam’s bail says something about the mindset, to borrow his phrase. What it says is that, as in the Donziger case, he believed that the end—destroying Sam—justified the means.
As predicted, Sam’s incarceration all but destroyed his ability to mount a defense. His attorneys were able to meet with him only sporadically and could not transfer files in a secure fashion unless it was done in person. Sam never had the time or resources to go through the vast amount of discovery material the prosecution had turned over at the last minute, and was denied access to a computer for most of the time, without which he could not review the discovery material or prepare his lawyers for trial—something they desperately needed in a case involving financial arrangements that were beyond the ken of most lawyers.
Some of these constraints were the unavoidable result of incarceration, which is the reason that Kaplan’s decision to revoke Sam’s bail was a clear violation of the spirit if not the letter of the Bail Reform Act. Others Kaplan could have done something about but repeatedly refused to. At the Aug. 11th hearing, Kaplan, in a nod to Sam’s Sixth Amendment right to a fair trial, instructed the prosecution to take whatever steps were necessary to ensure that Sam could work on his defense while incarcerated. The prosecution falsely represented that such arrangements were already underway. In response to repeated letters and motions from defense counsel informing him that no such arrangements had been made, Kaplan did nothing.
At the Aug. 11th hearing, Kaplan had held out the possibility that if Sam could not adequately prepare for trial from the MDC, he would consider releasing him under supervision. But he denied both defense requests that he do so. The second one came on the eve of trial, when defense counsel requested that Sam be released for the duration of the trial and housed in a secure location with 24-hour supervision (at our expense), which would allow him and his lawyers to confer on an ongoing basis. The arrangements they proposed would have made it physically impossible for Sam to speak publicly about the case—the ostensible justification for revoking his bail. Kaplan denied the request. As a result, for the duration of the trial Sam was awakened every morning at 4 am to be transported from prison to the courthouse, allowed to meet with his lawyers for 30 minutes before the trial started, denied access to them during lunch or after adjournment, and then kept in a holding cell at the courthouse for hours without access to a computer or any other materials until marshals arrived to transport him back the MDC at 9 pm, only to begin the whole thing again seven hours later. His lawyers were in fact desperately underprepared to cross-examine the government’s witnesses, and Sam, who could have prepped them down to the smallest detail, was essentially prevented from communicating with them.
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One of the defense counsel’s letters to Kaplan in August 2023 requesting that he intervene with the BOP to get them to dispense Sam’s prescribed medications was redirected to a Magistrate Judge, because Kaplan was unavailable. She called a hearing and requested that Sam be present. She asked him a lot of questions, listened to the answers, and treated him with kindness and respect. At the end, she said, “I don’t have the power to order a federal judge to do anything, but I promise you that as soon as I get back to my chambers I will call the BOP myself and see what I can do.” Bending the rules, the marshal who had brought Sam to the hearing allowed Joe and me to talk to him for a minute before he took him back to prison. Leaning over the railing separating us, I said to Sam, “What might have been . . . .” He nodded, his eyes pooled with tears. The next morning, Sam had his medications.
In Chapter 132 (“The Symphony”), which many regard as the finest chapter in Moby Dick, Captain Ahab stands alone on the deck of the Pequod on the morning of the final fatal chase, staring at the calm seas and azure sky. Thinking of the family he abandoned in Nantucket in his 40-year quest for revenge, for one brief moment he regains his sanity and his humanity, and orders his faithful mate Starbuck to turn the ship around and sail for home. In the end, he cannot shake the “cruel, remorseless thing” that has commandeered his cantankerous soul and countermands his order, but not before he sheds a single tear into the ocean. “Nor did all the Pacific contain such wealth as that one wee drop,” writes Melville.
Not this Ahab.