Andy McCarthy’s Take on the Sam Bankman-Fried Case

BUCK: Got our friend Andy McCarthy with us now here on Clay and Buck. He’s, of course, of National Review and Fox News, where he’s a contributor. He’s got yet another piece out. He’s got fabulous pieces out on a regular basis at National Review, and he was a federal prosecutor for the Southern District of New York for over 20 years. Andy, great to have you back, sir.

MCCARTHY: Merry Christmas, guys. How are you?

BUCK: Merry Christmas. We’re good.

CLAY: Fantastic.

BUCK: We’re pretty good. And if you want to ask Clay a baseball question at the end, just to stretch his sports knowledge —

CLAY: (laughing)

BUCK: — because I know you’re a super baseball Andy loves baseball slash coaches baseball or, you know, takes his kids for the.

CLAY: Yankees or a Mets guy. You’re a New Yorker, right?

MCCARTHY: I’m not only a Mets guy, I’m like, I can’t tell you how enthusiastic I am that we spent $90 million on two, 40-year-old pitchers.

CLAY: Hey, you know what’s great about this is, you poor bastard, first of all, I’m a Braves fan, and it doesn’t matter what you guys spend, you’re still going to lose the Braves. But I can’t imagine living in New York and being a Mets guy.

MCCARTHY: So in the old days, New York was a National League City. You know that that changed, I think, in the nineties when the Yankees had their amazing run. When I was a kid —

BUCK: This is what happens when I open the I open the sports conversation. Andy, we want to get to the breaking news here.

MCCARTHY: This is Andy from the Bronx calling in!

BUCK: Yeah, we got Andy on line 5. Go!

MCCARTHY: (laughing)

BUCK: “The Curious Timing of Sam Bankman-Fried’s Arrest.” I mean, we want to know about “the curious timing,” which you wrote about in National Review, but also just what’s going on here. I mean, is this guy…? You used to know, Andy, is someone going away? Is he going away?

MCCARTHY: Well, it sure looks like that to me. But, you know, I think here’s an important part of this, Buck, that I hope that… What I’m worried about, I’m kind of agnostic on cryptocurrency. There’s really smart people who think it’s a Ponzi scheme. There’s other really smart people like George Gilder who write books about how it’s the future. So, I don’t know. But here’s what I do know. This was just standard fraud. I mean, it happens in the context of crypto currency, but this could have been like, you know, fiat currency or bonds or stocks or, you know, fine art.

This is just like a standard fraud scheme where somebody gets money from investors, sets up another vehicle, transfers the funds, and then converts it to his own purposes. That’s the allegation, and what I think… What I be concerned about here is, you know, the Biden administration, the SEC, Democrats, you know, they see something that they don’t think is regulated enough and they want to regulate it. And if they think there’s some catastrophe that gives them the, you know, the crisis, they need to come in and do their, you know, sort of suffocating regulation, they’ll do that. And I’d hate to see them do that to crypto, because I don’t think this is like a typical crypto scheme. You know, maybe crypto needs to be, you know, regulated on its own merits, but I wouldn’t do it in a hot panic because these guys are like, you know, desperate to regulate stuff.

CLAY: Andy, when you see these charges coming down and we know that Sam Bankman-Fried is still in control of Bahamian authorities; they haven’t yet brought him to the United States. What kind of jail time, in your experience, would charges like these typically sort of lead to and or what kind of expectation would you have?

MCCARTHY: Oh, you know, I think the last one of these I remember is I think Bernie Madoff, the judge, had to depart downward in the sentencing guidelines to get them down to about 30 years because the numbers were off the charts. And whenever you see these two words associated with financial crimes, “money laundering,” what that ends up doing is turbocharging both the prison exposure and the way the sentencing guidelines work. So, you know, if he gets convicted on… So far, they brought eight counts. I would seriously doubt this is the last indictment. I think this is the opening salvo to get him extradited. But, I mean, he’s going to be looking at potentially life in prison.

BUCK: Wow.

CLAY: That’s what I was going to ask. Would you expect that that legitimately and not one of those situations where you have like 40 different charges all adding up to life in prison? But I mean, based on what they are throwing at him, you think he could be staring down, as a 30-year-old guy, spending the rest of his life in prison?

MCCARTHY: So what the federal law tries to do is end the ability of prosecutors to get people long sentences by stacking counts. So, you know, what the guidelines do is they try to implement what they call “real offense sentencing.” So that no matter how many counts there are, what matters is the guidelines calculation. But the thing is, with financial fraud, once you get to nine digits, that’s like, you know… (laughing) I mean, that’s through the ceiling.

CLAY: Yeah.

MCCARTHY: And then there’s all kinds of enhancements to the fact that you’re the one who designs the fraud. And if you run something that’s got, you know, five or more people in it. There’s all kinds of stuff that they could raise this on. So he’s looking at lots of time if he gets convicted of these charges.

BUCK: We’re speaking to Andy McCarthy, Fox News contributor, National Review writer, and Southern District of New York career prosecutor. Andy, what about this defense that I’m assuming — and I think most folks paying attention to this trial are assuming some version of this based on Sam Bankman-Fried statements, which, you know… Right? Usually when someone’s, you know, facing the kind of charges, the kind of, wait, this guy’s facing, they don’t go around on a press tour, but he’s basically been doing that. But what about this defense, Andy, “It’s just super complicated, I got over my head, and I didn’t mean anyone any financial harm”?

MCCARTHY: Yeah. You know, one of the reasons that I made the point at the beginning about this not being so much steeped in the esoterica of cryptocurrency is I really think this is not going to be a hard fraud for people to understand. You know, you take money from people. You make certain representations to them about why you’re taking it from them and what they should expect. And then you convert it to your own use. And if what the Justice Department says in the charging documents is true, what he did throughout the scheme was little accounting tricks within the system that they did their bookkeeping both for FTX and for his other, you know. side thing that he shoved everything over to, Alameda. Those are the kinds of things that get people convicted because they’re, you know, they show consciousness of guilt. And he’s not helping himself, obviously, by doing this. The store, as you say, you know, it’s highly unusual for somebody to do a press tour under these circumstances where you’re like the main suspect in a big fraud. But it usually doesn’t happen to someone whose parents are Stanford law professors. So I’m a little puzzled.

CLAY: So, Andy, would you expect that there will be other people indicted based on what’s going on here? Would you expect that there will be a lot of people who will flip and testify against him? In your experience, what would a prosecution end up looking like given the voluminous nature of this alleged fraud?

MCCARTHY: Yeah, I think that that’s like the main thing to take away from these indictments, because if I’m counting… If I’m remembering right, it’s either three conspiracy charges of four conspiracy charges. And everything in the indictment is played as a scheme which usually implies more than one people. But under federal law, in any law, in fact, you can’t conspire by yourself. It takes two to tango, as they say. Right? So the fact that they brought at least three conspiracy charges indicates to me that they already have identified people who have to be coconspirators. So I would expect if you don’t see more indictments, it could be because people are cooperating already and you’ll see, you know, guilty plea agreements and that sort of stuff. But it just seems like it’s inescapable that if they’re charging conspiracies, you don’t want to give him a defense that, you know, he can’t be guilty of conspiracy because there’s no other conspirators. Right? So they have to have other people.

BUCK: Andy, I know you’re not a deejay at a wedding taking requests here, but can we for the next time we have you all, will you take a look at what’s going on…? Because Clay and I are really focused in on Idaho and this this case of the four murders there, because we want to have you, after you’ve done a deep dive, come back and tell us what you think is going on. Because I know you’ve handled a lot of violent crime stuff at the Southern District. So can we put that request in with you?

MCCARTHY: Oh, yeah. No, I’d be. I’m glad that your producer raised it with me, and I’m glad he did because I haven’t… I’ve been running around a little bit. So this is the first —

BUCK: There’s this one. I mean, people are literally being kept up at night in Idaho overnight. I mean, they’re terrified given what happened there. And there’s just right now nothing in terms of leads, nothing in terms of any kind of break in the case. So we’d love to bring your expertise to that one and everybody should go read Andy on Sam Bankman-Fried and the collapse of FDX over National Review. Andy, always appreciate you, my friend. Thanks for being with us.

MCCARTHY: Thanks, guys. Appreciate it.