2 months ago
Prosecutors successful the Samourai Wallet lawsuit person denied accusations that they suppressed captious grounds successful their transgression lawsuit against the crypto mixing service’s 2 co-founders, Keonne Rodriguez and William Lonergan Hill.
In a missive to the tribunal filed Friday, prosecutors urged Judge Richard Berman of the Southern District of New York (SDNY) to contradict Rodriguez and Hill’s caller question for a proceeding to litigate the government’s tardy disclosure of a speech betwixt prosecutors and the Financial Services Enforcement Network (FinCEN). In that conversation, which took spot six months earlier charges were filed, FinCEN officials told prosecutors that Samourai Wallet didn’t conscionable their explanation of a wealth transmitting concern and frankincense didn’t request a licence to operate.
Despite FinCEN’s guidance, prosecutors went up with their case, charging some Rodriguez and Hill with 1 number each of conspiracy to perpetrate wealth laundering and conspiracy to run an unlicensed wealth transmitting business. Through Samourai Wallet, prosecutors person alleged that the 2 men “intentionally and successfully laundered implicit $100 cardinal successful transgression proceeds of each types” and explicitly marketed their services to “Dark/Gray Market Participants” including hackers and fraudsters.
By not telling the defence astir their connection with FinCEN until past month, lawyers for Rodriguez and Hill accidental the authorities violated owed process — a alleged Brady violation, named for the landmark Supreme Court lawsuit Brady v. Maryland successful 1963, successful which the tribunal held that the authorities indispensable manus implicit immoderate exculpatory oregon worldly grounds (basically, thing suggesting that the suspect isn’t really blameworthy of the transgression they’ve been charged with) to the defence successful a timely manner.
However, prosecutors person denied that they’ve committed immoderate Brady violations successful the Samourai Wallet case. In their missive to the judge, they laid retired a big of reasons that the timing of their disclosure of the FinCEN speech was just play. First, they argued that their speech with the FinCEN employees represented their “individual, informal and caveated opinions” connected whether Samourai Wallet would person been required to registry arsenic a wealth transmitting business, alternatively than a ceremonial uncovering by the regulator itself.
“Courts person repeatedly held that these types of ineligible opinions — oregon opinions of immoderate benignant — are not Brady material; facts are Brady material,” prosecutors wrote.
Prosecutors besides said that, adjacent if the worldly were applicable to the defense’s case, they had turned it implicit to the defence 7 months up of trial, writing: “There is nary request for tribunal involution erstwhile the defendants person received find materials sufficiently successful beforehand of proceedings to efficaciously usage the information.”
In their ain missive to the tribunal earlier this week, lawyers for Samourai Wallet said that their clients had been unfairly prejudiced by the government’s deficiency of disclosure, arguing that it could person impacted the magistrate judge’s bail determination oregon the court’s ruling connected an aboriginal question to disregard the lawsuit entirely.
Prosecutors pushed backmost against this argument, saying that the bulk of the lawsuit against Samourai Wallet was not tied to the wealth transmitting complaint and was alternatively tied to Rodriguez and Hill’s alleged wealth laundering strategy — the much superior of the 2 charges against them, carrying a hefty 20 twelvemonth maximum situation sentence.
The back-and-forth implicit the imaginable Brady usurpation comes aft the defence asked prosecutors to driblet their lawsuit nether the auspices of the alleged Blanche Memo, a recent memo from Deputy Attorney General Todd Blanche, ordering U.S. Department of Justice (DOJ) unit to constrictive their crypto enforcement priorities. Under the Blanche memo, prosecutors were ordered to halt pursuing litigation against crypto exchanges oregon mixing services for the actions of their extremity users.
Following the request, prosecutors met with the defence to see the petition connected April 10. Nearly a period later, the authorities inactive has not reached a determination either way, which immoderate erstwhile SDNY prosecutors person characterized arsenic antithetic successful conversations with CoinDesk.
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