Court updates and discovery news
Additionally, Hill’s attorney mentioned a letter from US Senators Cynthia Lummis and Ron Wyden, which criticized the DoJ’s interpretation of the Financial Crimes Enforcement Network (FinCEN) statute. The correspondence contended that the DoJ’s position on unlicensed money transmission was inconsistent with the statute’s original intent. Based on this, Hill’s lawyer filed a motion to dismiss the charge. However, the judge rejected the motion and set a follow-up hearing for December 17, 2024, at 10 AM ET.
In the latter part of the court session, Rodriguez’s legal representatives aimed to alter the terms of his bail, specifically asking for the removal of his home detention and to ease restrictions on his cryptocurrency transactions. The defense claimed that home detention was excessively stringent, particularly since Rodriguez had already shown he was not a flight risk. They highlighted two instances when Rodriguez could have fled but opted to comply with his bail conditions. His attorney further asserted that the limitations on cryptocurrency transactions were hindering Rodriguez from accessing funds, some of which originated from Samourai Wallet, needed to manage his escalating legal fees. According to Zack Shapiro, a Legal Fellow at the Bitcoin Policy Institute (BPI), the request to modify crypto restrictions was partially driven by Rodriguez’s need to liquidate bitcoin to finance his defense.
The prosecution, however, vehemently opposed the request, contending that home detention was essential to guarantee Rodriguez’s continuous presence at trial. They stressed the severity of the charges, which carry a possible sentence of up to 25 years in prison. The prosecution also introduced evidence that raised doubts about Rodriguez’s intentions, including handwritten notes discovered at his residence. These notes allegedly detailed an escape plan, which included multiple passports, cash, a burner phone, an unused SIM card, and mnemonic phrases for accessing cryptocurrency assets. The prosecution argued that this was not merely a general emergency plan, as the defense maintained, but an active escape strategy that Rodriguez could employ at any moment.
The prosecution initiated the session by detailing advancements in the discovery phase, asserting they had supplied the defense with “extensive batches of discovery.” The initial batch, delivered in mid-June 2024, consisted of business documents, emails, and data from social media accounts. A subsequent batch, shared in mid-August 2024, included information extracted from devices taken from both developers. Thus far, the DoJ has managed to retrieve data from 15 of the 44 devices seized from Rodriguez and 25 of the 27 devices taken from Hill. The prosecution also noted that a third, smaller batch of discovery would be accessible soon, and they expressed readiness to proceed with the trial.
In today’s session at the Southern District of New York, Samourai Wallet creators Keonne Rodriguez and William Lonergan Hill made their first public appearance together since the US Department of Justice (DoJ) charged them in April 2024. The accusations involve conspiracy to carry out money laundering and running an unlicensed money transmitting operation. This marks the first court appearance for both developers since Hill’s bail release in July and Rodriguez’s initial hearing in May.
Bail modification motion and escape plan apprehensions
Rodriguez’s lawyer contended that it was premature to establish a trial date, as the defense had yet to fully analyze the discovery received in August. The defense also emphasized that they had found no evidence suggesting that either Rodriguez or Hill operated an unlicensed money transmitting business.
Despite the defense’s claim that the notes were simply components of a wider emergency preparedness strategy, the judge favored the prosecution. The judge voiced concerns regarding the potential flight risk and denied the request to amend Rodriguez’s bail conditions. The court also urged both parties to accelerate the proceedings, considering the substantial quantity of discovery evidence and the intricate nature of the charges.
Source: bitcoinmagazine.com
Hill’s lawyer discussed the immense volume of data they had received—totaling 8 terabytes, which he likened to 75% of the contents housed in the Library of Congress. He stressed the challenge of reviewing such a vast amount of information, equating it to piling paper “to the moon and back 22 times.”
