Harder Still To Find A Surety

A perpetual problem for federal defendants that rarely makes the radar otherwise is that they’re unable to get any financially responsible person to sign off on their personal recognizance bond for release from custody. In most cases, the concern of potential sureties is that by signing a PRB for a defendant charged with a serious crime, which is most federal defendants, the surety will put a target on his back for federal agents, who will then conduct a financial, if not personal, colonoscopy to see what they can find with which to charge the surety.

Nobody wants that kind of attention, and many refuse to sign PRBs because as much as they trust the defendant not to violate the PRB, they don’t trust government agents not to raid their home. But these are in ordinary cases that don’t make the headlines. High profile cases are an entirely different matter, and Judge Lewis Kaplan in U.S. v. Bankman-Fried just made the problem far, far worse.

The release deal approved by the mag required two subsequent non-family FRPs in amounts to be determined, which were later agreed upon at $500,000 and $200,000. But now, the media is moving to learn the identities of these two non-family PRBs. Why?

The presumption of access is strong for “documents that ‘directly affect an adjudication’ and play a significant role in ‘determining litigants’ substantive rights.'”  Moreover, documents that “are usually filed with the court and are generally available” enjoy a stronger presumption of public access than documents for which “filing with the court is unusual or is generally under seal.”  By contrast, “documents that ‘play only a negligible role in the performance of Article III duties’ are accorded only a low presumption that ‘amounts to little more than a prediction of public access absent a countervailing reason.'”

The sureties aren’t witnesses, per se, to anything, but merely people willing to sign off on PRB’s for the notorious Sam Bankman-Fried. Their identities have no legal relevance to anything in the case, but for the salacious interest of the media on who would stand up for this hated defendant. And Judge Kaplan appears to recognize this.

At bottom, the strength of the presumption in this case, as it applies to the identities of the non-parental sureties, is not strong. The benefit to the public of knowing the identities of the non-parental sureties for the purposes of “monitoring the federal courts” is extremely limited at best despite the fact that there appears to be a lot of popular interest in who they are.

The presumption of access is purely generic here, a general presumption that finds no substantive need for the public and media to know their identities beyond feeding the public’s titillating bloodlust against a hated defendant. And yet, Judge Kaplan doesn’t see that as much of a countervailing factor.

The conclusion that there is a modest presumption in favor of public access to this information is not the end of the analysis. Courts must consider whether the presumption has been overcome. Relevant factors include but are not limited to (i) “the danger of impairing law enforcement or judicial efficiency” and (ii) “the privacy interests of those resisting disclosure,”  including the “nature and degree of injury”  resulting from disclosure.

While the first factor doesn’t come into play, the second is quite real.

More serious is defendant’s claim that he and his parents “have become the target of … harassment[ ] and threats … including communications expressing a desire that they suffer physical harm.”  While there is no evidence to that effect before me, I have no reason to doubt the assertion. But it does not follow that the non-parental sureties “would face similar … threats and harassment ….”  Defendant’s parents were subject to intense public scrutiny for their close relationship with defendant and their involvement with FTX well before co-signing his bail bond.  Indeed, defendant’s father “was a paid employee of the company for nearly a year prior to FTX’s collapse, connected FTX with at least one major investor, and participated in FTX’s meetings with policy makers and officials.”  In contrast, the amounts of the Individual Bonds—$500,000 and $200,000 —do not suggest that the non-parental sureties are persons of great wealth or likely to attract attention of the types and volume of that to which defendant’s parents appear to have been subjected. Thus, defendant’s claim that the non-parental sureties “would face similar intrusions” is speculative and entitled only to modest weight.

This is a shockingly shallow appreciation of what these two non-parental sureties face. First, that the court deems these sureties as not being “persons of great wealth” is wholly out of touch with reality. To most people, a few hundred grand to lose is a lot of money, great wealth indeed. And to suggest that they aren’t likely to attract attention flies in the face of the motion itself. Why else would the media be pushing so hard for their identities? They’re drooling over the chance to hold them out to dry as the people who backed the loathsome Bankman-Fried.

But the least justifiable holding is that these sureties wouldn’t be the targets of threats and harassment for having signed PRBs for the defendant. Of course it’s “speculative” until it happens, but who wants to take a bullet in the back from some outraged nutjob to prove the point afterward?

Nothing is certain until it’s certain, but the risk is both obviously real and, more to the point, while the two non-parental sureties are willing to risk the loss of money, are they willing to lose their lives, have their jobs or businesses put at risk, have their names and reputations destroyed in the newspapers because of their association with Bankman-Friend?

It’s hard enough to get non-parental sureties to take the risk, from which there is no personal benefit to them, to sign PRBs for a federal defendant. Make that a high-profile notorious defendant and the chance of getting anyone willing to be a surety falls from slim to none.

6 thoughts on “Harder Still To Find A Surety

  1. Mike V.

    As sure as the sun rises those sureties will have the media crawling over their lives with electron microscopes if they are identified. To pretend otherwise is insulting.

    1. SHG Post author

      Judge Kaplan is one of the most realistic judges in SDNY, which is why this out-of-touch decision is surprising.

      1. Grant

        This isn’t something that the judge could take judicial notice of, and the defense didn’t see fit to document it. The phrase “While there is no evidence to that effect before me,” is pulling a lot of weight in the opinion.

        The harm to the sureties something hard to prove because it hasn’t happened yet. If I were serious about opposing publicity, I would retain an expert and need a *lot* of research in the seedy underbelly of the internet to find where people are posting threats/conspiracy theories about the sureties.

        We all know what is going to happen, but the defense had to bring competent evidence and didn’t. It’s understandable why they didn’t. SBF’s lawyers have bigger fish to fry, especially if he is really down to his last $100k and about to take part in the time-honored tradition of stiffing his lawyers for the remainder of the criminal case.

        1. Miles

          Expert witness? Are you kidding? This should never have been a difficult issue. No need to make a federal case out of every tangential detail when something is as obvious as this. There really has to be a limit as to how much craziness every simple issue requires.

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