| For North
Korea Trial Virgil Griffith Bid To Delay
Trial Due to Late OFAC Docs Is Denied
By Matthew
Russell Lee, Pod
Exclusive Patreon
BBC
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UK - Honduras
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Source
SDNY COURTHOUSE,
Sept 23 – Virgil Griffith,
charged with violating North
Korea sanctions in connection
with a crypto-currency
conference there, faced a bail
review proceeding - in person
- on July 20. He lost and was
remanded. Inner City Press was
there, and live tweeted, here
and below (podcast here)
On
September 14, in the run up to
the trial scheduled to start
on September 27, there was a
final pre-trial conference
replete with rulings. Inner
City Press live tweeted it here
and below.
On
September 22, Judge Castel
denied Griffith's sealed
motion to depose the Ethereum
Foundation's general counsel
Tju Liang Chua, or to allow
him to testify by video. Order
on Patreon here.
On other grounds - late
produced discovery -
Griffith's lawyers asked
for a week continuance in the
trial.
On September 23,
initially without Griffith
present, Judge Castel held a
hearing then denied the
request for delay. Inner City
Press live tweeted it here:
Assistant US
Attorney: There is no basis
for an adjournment of the
trial. They are not requesting
to exclude, it seems.
Judge Castel: The parties
agreed the US would make trial
exhibit available on a rolling
basis up to Sept 17? AUSA: We
did not agree to end then
It's 3:15
pm and... "It's the MCC, I
have Virgil here."
Virgil: Hello.
Judge Castel: Welcome.
Proceeding
on ex #Ethereum developer
Griffith's request to postpone
his trial continues Griffith's
lawyer: On August 29 we were
told the discovery production
would commence ASAP - and
would conclude on Sept 17 with
the actual exhibits. But
giving us 100 exhibits after
Sept 17 is not amending...
Assistant US
Attorney: Earlier this week we
asked for more documents from
OFAC, and gave them to the
defense. There is no Brady
material in these documents.
Judge
Castel: The defendant has
moved for a postponement of
trial for belated disclosure
of OFAC documents... As the
Court reads Section 3550, it
is not empowered to order the
government to produce this
early. This is not civil
litigation.
Judge
Castel: From what I have seen
here, the Government was
careful, used caveats. I don't
see gamesmanship here. It's
just the chaos in the days
leading up to a trial. It was
sub-optimal but not wrong.
Judge Castel: If
this transcript is ever read,
I hope it's on a sunny day
with face masks a thing of the
past. We resumed jury trials
on a limited basis less than a
year ago. From now until
December 2021 there is no date
this can be adjourned to.
Judge
Castel: Since Sept 29, 2020
we've had 60 jury trials.
Here, I have a detained
defendant. The application for
an adjournment is
denied. Griffith's
lawyer: What about Jan 2022?
Judge Castel:
I've ruled. See you Monday.
Watch this site.
On
September 21 Griffith's lawyer
submitted a proposed order
that would allow them to
access his Coinbase account
for their fees. They argue
that "the only reason the
government ever articulated to
deny Mr. Griffith access to
his assets was the desire to
mitigate flight risk, which
cannot now be a concern given
that Mr. Griffith is
incarcerated. Indeed,
transferring the balance of
this account to counsel would
further mitigate any such
concern." Watch this site.
On September 17
the US Attorney's Office
submitted sworn declaration of
non-abuse of the Palantir
platform from, among others,
FBI Tactical Specialist
Juliana Aragon, Investigative
Analyst Alec Bugg, Supervisory
Special Agent Matthew L.
Charles, Special Agents
Bradford Coyle, Caroline
Jordan, Raymond Yi, Brandon
Cavanaugh, SDNY paralegal
specialists Charlotte Cooper,
Shawn Milone, AUSAs Michael
Krouse, Kimberly J. Ravener,
and Kyle A. Wirshba.
From
September 14: Judge Castel:
The Grand Jury indicted him
for participation in a
conspiracy to violate IIEPA
sanctions on North Korea, by
providing services to the DPRK
and evade requirements of US
law in connection therewith.
But the US want to get info in
outside the time frame
Judge Castel: The
US wants to get into evidence
an email about openness to
supporting the Ethereum
Foundation. I'm going to have
to reserve on that, and decide
when it comes up. Griffith's
statements would come in as
party statements, and CC-5 for
context
Judge Castel: The
email says South Korea seems
to be allowed to violate the
sanctions... That comes in as
a party statement. CC-5
replies, That's sensitive. I
don't think that comes in.
CC-5 has not been shown to be
part of the conspiracy.
Judge Castel:
Also Griffith's emails to a
DPRK account about attending
the conference, that comes in,
subject to connection, subject
to being stricken if the
declarant was not a member of
the conspiracy.
Judge Castel:
Griffith's statements at the
conference are direct proof of
the conspiracy [Note: this is
a rule that the statements
come into evidence, not an
indication of Judge Castel's
view of the merits, which will
be up to the jury in any
event]
Judge Castel:
Similarly Griffith's
statements to law enforcement,
they are party statement. The
May exchange about 'you should
get your taxes in order'
normally would not come in,
but for his response
indicating consciousness of
guilty...
Judge
Castel: The statement about
forgetting to file taxes in
2015 and 2018 is excluded, the
probative value is outweighed
by potential prejudice. That's
where I am. I have some
sympathy for the defense
saying they don't know the
full context. I could be
persuaded
Judge Castel:
What about NorthKorea's crypto
currency capabilities?
Griffith's lawyer: This trial
is about the block chain in
#NorthKorea. We want to show
that DPRK had tremendous
capability before Mr. Griffith
visited
Judge
Castel: Here's a hypothetical.
Country A is subject to these
sanctions. A technician there
downloads a manual on how to
repair a Dell laptop. 20
technicians learn out to do
it. Thereafter a US citizen
goes there to fix one - and
that's still services
Griffith's
lawyer: My client did not go
to #NorthKorea and fix
anything, physically. And the
information he provided was
publicly available.
Judge Castel: I'm not deciding
that at this time.
AUSA: We want to
have an expert testify about
Juche. Judge Castel: That
seems allowable, I'm probably
mis-pronouncing it, JuJu.
AUSA: We are all working on
pronouncing it. [Note:
North
Korea's Juche was improvised
in the 1950s]
Judge Castel:
Griffith's statement, I'll try
to become wealthy enough to
pay my bail *is* relevant, I'm
not going to exclude it. On
TOR and the Dark Web, the
government is not going to be
permitted to wander there but
some specifics, on his c.v.,
yes
Judge
Castel: Griffith wrote an
Ethereum colleague he would
not work on a DPRK node
because if he did the
President would get a memo
that Ethereum was helping
#NorthKorea nukes. AUSA: But
he went ahead and tried to get
someone else to do it, using
GoFundMe
Judge
Castel: I'm going to exclude
CC-3 sending Griffith a
newspaper article about
avoiding travel to North Korea
due to the sixth nuclear test
- it's prejudicial. Griffith's
lawyer: Using the term nuclear
would be like dropping a
nuclear bomb in this courtroom
Judge Castel: If
there's been misconduct, it
could result in acquittal if
he's convicted. If the
prosecution did not access the
material [on Palantir], I'm
prepared to go forward with
the trial.
Griffith's
lawyer: We're also asking to
suppress all the evidence that
was put on Palantir -- Judge
Castel: If you persuade me
it's outrageous, I supposed I
could jump to dismissing the
indictment. Griffith's
lawyer: We don't have to show
outrageous conduct.
Virgil
Griffith proceeding winds up
with questions on how to get
phones in, clothes while in
jail, and attendance by his
family, who would travel up
from Alabama.
Inner City Press
will cover the trial
On
September 13, an order
was docketed that has the
potential to link Griffith's
case to the type of
prosecutorial actions
criticized - and leaving to
vacatur of conviction - in the
US v. Nejad case: "ORDER as to
Virgil Griffith: In connection
with defendant's motion to
dismiss emailed to the Court
at 11:42 p.m. on Friday,
September 10, 2021 the
government is ORDERED as
follows: 1. By September 17,
2021, file declarations from
each member of the prosecution
team, including AUSAs and
agents, stating whether from
after September 14, 2020 to
the present the individual
conducted or directed another
to conduct a search of
material deemed to be not
pertinent to the search
warrant and further whether
the individual has knowledge
of any other member of the
prosecution team having done
so. 2. By the close of
business on September 13,
2021, provide the Court with
copies of the initial report
and any follow-up report made
to Judge Nathan as directed in
the Opinion & Order of
February 22, 2021 in United
States v Nejad, 18 cr 224
(AN). 3. By the close of
business on September 13,
2021, set forth why the Court
ought not order the government
to produce the three
categories of information and
documents sought by the
defense on pages 20-21 of its
memorandum of law. (Signed by
Judge P. Kevin Castel on
9/12/2021)." Watch this site.
On September 2 a
sealed letter and proposed
order, with account numbers
and and monetary balances, was
filed - but not available to
the press or public. On
September 3 Judge Castel
ruled: "ORDER as to Virgil
Griffith: The application to
seal the letter of September
2, 2021, together with the
proposed order, is granted in
part and denied in part. The
letter and proposed order are
sealed but redacted versions
of the letter and proposed
order shall be filed forthwith
by defendant on the public
docket, redacting only unique
identifiers and/or account
numbers, date of birth and the
believed balance in the
account. SO ORDERED. (Signed
by Judge P. Kevin Castel on
9/3/2021)."
Now a redacted
letter by Griffith's lawyer,
for permission to get paid
from Griffith's Coinbase
account.The US Attorney's
Office is opposed.
Late on August 27
Griffith's lawyers filed his
motions to limine, seeking to
exclude evidence at trial
including about his "purported
personal wealth and
cryptocurrency holdings..
involvement with Tor / 'Dark
Web'... DPRK's nuclear program
and any implication that Mr.
Griffith was involved in said
program." Watch this site.
On August 24 the
US Attorney's Office
acknowledged that at least
four FBI agents not on the
case accessed the search
warrant returns from
Griffith's accounts:
"(1) On May 4,
2020, a now-retired FBI agent
conducted a search on the
Platform and then, based
on the returns from that
search, viewed at least some
portion of the Search
Warrant Returns.
(2) On April 6,
2021, and April 19, 2021, an
FBI analyst ran three searches
on the Platform and viewed at
least some portion of the
Search Warrant Returns.
(3) On May 27,
2021, an FBI analyst conducted
a search on the Platform and,
as a result of that
search, viewed at least some
portion of the Search Warrant
Returns.
(4) As described
above, on August 11, 2021, an
FBI analyst conducted a search
in the Platform and
viewed at least some portion
of the Search Warrant Returns.
She shared those results with,
among others, an FBI agent
also not on the prosecution
team, who emailed them
to the FBI case agent." Full
letter on Inner City Press'
DocumentCloud here.
On August 13, the
US Attorney's Office filed its
motions in limine, including
that Griffith "forwarded
CC-4's email to the co-founder
of the Ethereum Foundation and
Griffith's ultimate boss
('Individual-1') and another
Ethereum Foundation leader."
The US wants to use these
individuals, and
communications, against
Griffith at trial. Watch this
site.
From July 20:
Judge Castel has entered: All
rise. Two prosecutors, 1
pre-trial services officer.
Griffith and 2 lawyers.
AUSA: The
defendant tried to access his
crypto accounts, using a 3d
party, evading computer
monitoring condition.
AUSA: His
mother impersonated him. The
defense counsel's involvement
does not mitigate the risk of
flight. "He's a millionaire
with ties abroad."
Judge
Castel: How much time might he
face? AUSA: 20 years. Judge
Castel: Were the funds frozen?
AUSA: Coinbase said they would
not release them... He was
thrown out of hotel in LA,
after bragging about North
Korea and crypto, he told
staff, Read about me.
AUSA: The
defendant has violated his
bail conditions. Judge Castel:
Mr Klein?
Ms Axel: It's a
misunderstanding. He's only
banned from cold wallets. His
father is here. [True: here in
courtroom gallery with Inmer
City Press]
Judge
Castel hands out law of 2d
Circuit on advice of counsel
as a defense. [Note:
There are no US Marshals in
the courtroom now.]
Ms Axel seems to
acknowledge that Mrs Griffith
made it appear to Coinbase
that she was her son. Judge
Castel: Did he email Coinbase?
Seems so. Judge Castel
reads Judge Broderick's Jan 2,
2020 bond order. Axel: You
modified it. Judge Castel: So
it's my fault...
Axel cites Docket
92, allowing emails with non
attorneys. Judge Castel: The
no-crypto provision was not
modified. You have a problem
here, Ms. Axel.
Judge Castel: His
mother's Internet use was on
hid behalf, and in his name.
Axel: His father put Virgil's
name in his phone to get in
today. Judge Castel: Is
Ethereum paying for any of his
defense? Klein: Not in public.
[Sidebar with white noise]
Klein comes into
gallery and whispers with
Virgil's father, returns to
sidebar with Judge Castel and
prosecutors.
Axel: We
spoke with pre-trial services
officer Carl in Alabama...
Virgil's parents are
upstanding members of the
Tuscaloosa community. Judge
Castel: Pre-Trial works for
the Court. Inner City Press
@innercitypress · 54m Two US
Marshals have come into the
courtroom. One goes forward
and sits directly behind
Griffith. Axel is still
talking.
Judge Castel:
Last word to the government.
AUSA: They knew accessing
crypto currency accounts was
forbidden. These are just post
hoc justifications.
AUSA: He's told
No, then tries to circumvent.
He's an expert in the Dark
Web, and searching it. On Aug
7, 2019 he said, The Americans
let you get away with it once.
Judge Castel: I
don't have to find a
violation. This is a bail
review. Axel: Dissidents use
the Dark Web. He has PhD, he
could do this. Doctor Evil
does this with a burner from
Starbucks, not through his
mother.
Judge Castel:
He's charged in a single IEEPA
count. Trial is near. The
circumstances have changed.
Ether has gone up by ten
times. It changes the
calculus. Bond Paragraph 14
was violated.
Judge
Castel: My concern is risk of
flight. The defendant is
remanded.
He is awaiting
trial in September 2021 in the
U.S. District Court for the
Southern District of New York.
On July 9 the US
Attorney's Office wrote to
SDNY Judge P. Kevin Castel
saying Griffith attempted to
access one of his frozen
cryptocurrency accounts
containing assets of nearly $1
million. They went a hearing,
and they want him remanded
(jailed). Full letter on
Patreon here.
On July 13, this:
"MEMO ENDORSEMENT as to Virgil
Griffith on re: [119] LETTER
MOTION filed by USA addressed
to Judge P. Kevin Castel from
AUSAs Kimberly Ravener and
Kyle Wirshba dated July 9,
2021 re: Violation of Bail
Conditions. ENDORSEMENT: A
bail review proceeding will be
held on July 20, 2021 at 2:00
p.m. in Courtroom 11D. The
defendant shall appear in
person."
On July 16,
Griffith's lawyers argued
that his parents accessed
Coinbase, given the run up in
ETH price, to pay for counsel:
"Given the impending trial
date, Mr. Griffith may need to
sell certain assets to fund
his legal defense. Mr.
Griffith consults closely with
his family on financial
matters and did so even
prior to his arrest. In
connection with their strategy
to assess and access necessary
resources to fund his
defense, and after consulting
counsel, his mother made an
online request to access a
U.S.- based and regulated
cryptocurrency exchange,
Coinbase... As the Court
knows, Mr. Griffith was an
employee of the Ethereum
Foundation and was paid
in Ether (ETH), a
digital asset used on the
Ethereum blockchain. At
the time Mr. Griffith
was arrested in November
2019, he held some ETH and
some ETC (a related
cryptocurrency) in a Coinbase
account worth less than
$100,000. Since then, one ETH
has risen from about $150 to
about $1,900. The government
states that the account assets
are currently worth almost
$1 million. Neither Mr.
Griffith nor any family member
acting on his behalf has had
access to that account since
his arrest. With the
September trial date quickly
approaching, and given ETH’s
current value, Mr.
Griffith has wished to
know the exact contents of his
Coinbase account and the value
of his assets, so he
could consider transferring or
selling all of part of his
cryptocurrency held there to
pay trialrelated expenses. As
is their family culture, Mr.
Griffith’s father, Dr. Robert
Griffith, has been
involved and consulted in
matters regarding assets and
plans to pay defense counsel."
Full letter on Patreon
here.
Griffith's
lawyer have said the
prosecutors tried to mislead
Judge Castel by omitting from
their quote of email to
Coinbase the line that the
company could contact
Griffith's lawyer; they say
this shows no risk of flight.
On February
11, Judge Castel held a
proceeding about who knew what
before and at the conference
Griffith spoke at. A
stipulation or agreement has
been proposed, essentially
that some people know, but the
DPRK / Kim government as such
did not. Inner City Press live
tweeted the first proceeding,
here.
And on
February 23 the second
proceeding, in two parts, here.
The case is US v.
Griffith, 20-cr-15
(Castel).
***
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