by Matthew Russell Lee, Patreon Book Substack
SDNY COURTHOUSE, April 14 – James Zhong took Bitcoin from Silk Road worth $3.3 billion.
On April 14, 2023 he was sentenced to a year and a day in prison, and to pay a $10,000 fine. He left the courthouse with a jacket over his head (video here). It echoed Sam Bankman-Fried, being treated with kids' gloves. Inner City Press is on it, thread here:
Nowentencing of Jimmy Zhong for taking Bitcoin from Silk Road in 2012 - his lawyer says unlike Ross Ulbricht and his "ill-gotten gains," Jimmy made money for the US.
Defense counsel: Jimmy ran it through a bittcoin mixer. But it was not particularly sophisticated. Zhong has two lawyers speaking for him at sentences: this second one wants no jail time.
Zhong's 2d lawyer is reading a quote from Judge Jed Rakoff. Then says, Jimmy Zhong is a good guy. His immigrant parents ignored him. His mother and sister don't even know he is being prosecuted in this case.
Zhong's lawyer: Jimmy is on the autism spectrum. He flashed Bitcoin and cash for that reason. (Pause). He is not trying to shift the blame. He gave away Jimmy Choo shoes. He bought a Tesla. His judgment was impaired.
Zhong's lawyer: JImmy was in college. Many people in college do foolish things. Maybe not as foolish as this. He now has a company that makes parts, a 3-D machine. There's no need to rehabilitate him. It would cost $40,000 a year to imprison him.
US Attorney's Office says that "on November 9, 2021, pursuant to a judicially authorized premises search warrant of ZHONG’s Gainesville, Georgia, house, law enforcement seized approximately 50,676.17851897 Bitcoin, then valued at over $3.36 billion"
Zhong's lawyer: What's most important to Jimmy Zhong is his dog Chad, who is sick right now.
Zhong himself: I discovered a flaw in the Silk Road platform and stole Bitcoin from Ross. I kept them for a decade
Zhong: I spent 2000 Bitcoin, trying to form a relationship. Now the only one I have is my dog. He has a feeding tube. Assistant US Attorney: We are asking for below Probation's recommendation of 24 months.
AUSA: Zhong used an overseas crypto exchange, and a VPN. [Echo of SBF, for whom the Office keeps arguing for freedom. Here, asking for less than 24 months for Zhong]
AUSA: We allowed Zhong to plead only to wire fraud, not money laundering. He pretended his Bitcoin came from mining, not from Silk Road. He lived an elaborate lifestyle.
Judge: Silk Road, held Bitcoin in escrow. Zhong bought cocaine on Silk Road
Judge: He double clicked and stole 50,000 bitcoin, into 9 wallets. Then came the hard fork... Bitcoin enjoined a meteoric rise. At the 2021 raid, along with bitcoin, Zhong had over $600,000 in cash as well as gold bars. Probation says there are no innocent victims
Judge: He discovered the glitch and then spent $16 million, on luxury cars. The US is the victim here. There is a crying need for general deterrence. I intend to sentence Mr Zhong to a year and a day in prison [and a $10,000 fine and 250 hours of community service.]
Courthouse exit video here.
More with analysis on Substack here
The case is US v. Zhong, 22-cr-606 (Gardephe)
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