Bernie Madoff’s Former Attorney on FTX Implosion

FX founder Sam Beman Fried is scheduled for a hearing at 11 a.m. Eastern today in Bahamas court. He is reportedly expected to waive his right to extraction after a very confusing appearance Monday, that presiding judge then at the time deemed it was a waste of time joining us. Now to discuss is Bernie Madoff's former attorney, Ira Lee Sorkin, who is currently a partner at Mince and Gold. Ira. Thank you for joining us this morning. Do you think this time, do you think this time Sam Beri and his legal team have their act together? Do you think this extradition might actually be happening today? Well, I can't predict when it'll happen. It's up to the courts in the Bahamas, but the fact that he's waived extradition uh will move this along uh rather quickly. He will come to the United States. He will appear before a federal judge bail will be set. He'll be arraigned on the charges that are set forth in the indictment and then they will determine um uh more significantly for him at this point, the bail issue. Uh There was an article in the Times this morning uh that there are negotiations taking place between his counsel and the US Attorney's office in Manhattan uh to determine his bail conditions and uh the bail conditions will, I'm sorry, go ahead. Is, is this though quite a bit of a anomalous situation in terms of, you know, Monday, he went to court the, his bohemian lawyer said he was unfamiliar with the US extradition against his client and then asked to see it. There's a lot of confusion in the court. The judge said it was a waste of time. How would you interpret this situation? I interpret that because he hadn't made up his mind. He probably has had limited discussions with his US counsel. Uh Mark Cohen of the con of the Firm of Co and Gresser. Uh But he changed his mind. Uh I think inevitably he was going to be extradited. I don't believe that he has any chance of not having been extradited. And so to move things along rather than spend time, perhaps even for weeks and months in a rather not very pleasant jail. Uh In the Bahamas, he chose to waive extradition come to the United States. Um And they're in the process now of negotiating his bail conditions. Uh The uh bail will be determined based upon the statute uh in the uh federal, the federal statute, if he is um a threat to the community, that's one factor the judge will consider on his bail conditions. Uh And, or he is a risk of fleeing. In other words, that there's a threat that he's gonna skip the jurisdiction. Uh, then the judge will consider, uh, whether or not he should be given bail and the bail can make very, uh, it's, it's fashioned in several different ways. He could be confined to home confinement confinement. In other words, he's got to stay home two. They might, uh, certainly want to put an ankle bracelet on him that will bing bing bing if he decides to leave a particular place that'll be monitored 24 7. Um, he will certainly have the ability, uh, to hire. Uh, well, I'm not gonna say he has the ability. Uh, in, uh, the Madoff situation, there were private investigators, uh, who, uh, uh, watched him 24 7 to make sure he didn't flee. Uh, but, uh, my suspicion based upon the Madoff situation, there will be enough cameras and press, um, and, uh, satellite dishes are surrounding where he's staying that there's no way at all that he could possibly sneak out and skip. So they're negotiating that and that's what's gonna happen when he comes back to the United States. I, I in the month or so between the time they filed for bankruptcy and the time he was arrested in less than a month, um, he went on a, uh, on a massive media tour on an apology tour of some sort. II, I don't know how to describe it. He was out there. He was doing interviews, he was uh being he got a standing ovation from the New York Times uh audience. And uh i it, when asked about it, he said, well, my lawyers, I in, in a nutshell, he said, uh he, his lawyers would not have been pleased why as an attorney who has dealt with a case, a very famous case similar to this, what kind of things did he or could he have done in this process of, of this immediate tour that would, would you say, would you recommend against it? Um, what could he have done wrong and will any of it be used against him now? Well, the short answer is when I was first interviewed by a reporter, my first reaction is that if I spoke to him, I would say shut up, uh, the only individuals or entities that cared about what he was saying were the regulators and the prosecutors. Uh, if he was out there trying to sell the, uh, his activities as being lawful and, uh done because he was stupid and he made some mistakes and so forth. Uh, the only uh audience he could possibly be addressing is a potential jury. Um, and the public really doesn't care and doesn't follow it. But, uh, he should have kept quiet because as I said, the only people who are interested in what he had to say, uh, or have any meaning are the prosecutors and the regulators uh, why he went and did what he did. No lawyer worth his salt is gonna tell him, go out and hold press conferences and speak to groups. Keep your mouth shut. Uh, and that's why you hire lawyers to help you. So, he made a terrible mistake in my view. Why do you suppose his attorneys, uh, allowed it, or at least, uh, you know, why didn't they? I don't think they allow it and eventually he had new ones. Yeah, I mean, why, why wouldn't they threaten to? Quite like my guess is, uh, I've known his present us lawyer for many, many, many years. And as I said, no attorney who's involved in this process would ever say to him, uh go out and tell the world that you made a mistake and you were negligent and so on. You keep your mouth shut because as I said, bear with me for repeating the only people interested in what he had to say were the prosecutors and the regulators. And yes, in response to your question, could that be held against him? Certainly, depending upon what he said. Um There you see Sam Bakeman freed as a mini Bernie Madoff. Are there similarities and difference? I don't think there's any similarity. Uh There's been a lot of comparisons. Bernie Madoff continued according to the government, uh his Ponzi scheme for over 30 years. Um and he had investors and he would get an investor, the investor would give him money and then he would send that money out to individuals who he made promises to that. Uh, they would get uh high interest bearing securities. Uh, and in his particular case, um, the money uh was transferred from A to B to C to keep the Ponzi scheme going here based upon the allegations that the government has, uh brought against him through the indictment. Um He used investors money to enrich himself. That was not necessarily true of Madoff. Um Madoff, uh did not really uh live as expensively as I understand it that uh uh Bank and Fried lived. Uh but it's a different type of case. Uh It's, it wasn't a Ponzi scheme, it was just him. That's also the case. Sam has been making as well. He's saying that he had an actual business but in his case, he was just, uh allegedly stealing, customers have had an actual business and he may have had an actual business, but the essence of the allegations against him is that he took investors money and used it for his own personal use in Alameda. He just took the money out and spent it and made political contributions uh to the GOP and to the Democrats. All right. I wonder what kind of advice would you give Sam if you were his attorney? And, and how do you see this ending? Um I see it ending with the government bringing additional charges against him if you look at the indictment. The indictment is interesting because it charges a number of different conspiracies. Uh You cannot be charged with conspiring with yourself. Conspiracies require two or more people. And so my uh educated speculation is that there will be what we call a superseding indictment that will be in another indictment which will name him and other uh who uh the government will call coconspirators or unindicted co conspirators. I suspect um also against educated speculation that there are a number of people cooperating with the government. There were a number of people cooperating with the government before and after the bankruptcy. Um And um uh the government now is putting together a stronger indictment and probably naming other individuals who assisted him uh in the alleged scheme.