By Matthew Russell Lee, Patreon Maxwell Book
SDNY COURTROOM, May 11 - In the U.S. District Court for the Southern District of New York on December 27, 2022 a complaint was ordered unsealed charging Avraham Eisenberg with commodities fraud. He was arrested in Puerto Rico.
Inner City Press is covering the case(s), often as the only media in the Mag Court. Related Mag Court live-tweeted thread (more on Patreon here) vlog here
On January 9, Inner City Press came across the CFTC case against Eisenberg, just filed (still with no title in PACER) and put it out on Patreon here.
More on Substack here.
On June 14, the judge held a proceeding to pick a trial date. Inner City Press covered it, thread here.
Inner City Press covered the trial (below) and on April 18 Avi Eisenberg was convicted. The US Attorney's Office announced "EISENBERG, 28, of Puerto Rico, was convicted of commodities fraud, which carries a maximum penalty of 10 years in prison; commodities manipulation, which carries a maximum penalty of 10 years in prison; and wire fraud, which carries a maximum penalty of 20 years in prison. The statutory maximum penalties in this case are prescribed by Congress and are provided here for informational purposes only, as any sentencing of the defendant will be determined by a judge. EISENBERG is scheduled to be sentenced on July 29, 2024."
But on May 11, Eisenberg's lawyer wrote in seeking to delay sentencing to the week of September 30 and consolidate it with sentencing on the CP charges they added on, as in US v. Josh Schulte (and US v. James Garlick). The US may still seek consecutive sentences.
Back on July 27 Eisenberg moved to dismiss and to suppress; he submitted a 7-page affadavit including "In the evening of December 26, 2022, I arrived by airplane at The Luis Munoz Marin International Airport in Carolina, Puerto Rico, just outside of San Juan. 3. I disembarked the airplane with my luggage, a backpack and a suitcase. 4. I walked to the United States Customs counter. There, I was questioned by a United States Customs and Border Protection ("CBP") agent regarding the purpose of the trip I had just completed and general questions about the contents of my luggage. 5. The CBP agent directed me to a specific area several feet away from the Customs counter for additional questioning, and there another CBP officer opened the suitcase and backpack. I recall the agent pulling out the laptop and asking me to turn it on" - full affidavit on Patreon here.
Watch this site.
The complaint is on Patreon here
On February 3, Eisenberg in a yellow jump suit and feet shackled was brought into Magistrates Court at SDNY. He had, at least for the proceeding, the same lawyer Ethereum developer Virgil Griffith had in the North Korea sanctions case he pled guilty in: Brian Klein.
His parents were in the gallery and he looked at them, from two rows away. The prosecutor said that (unlike on Sam Bankman-Fried) they were seeking detention, and that he was consenting at least for now. Here is Inner City Press' thread.
There's more detail on Patreon here.
On February 14, there was a very brief arraignment, thread here
On November 2, 2023 Eisenberg's counsel wrote it seeking to push the December 4 trial to March or April. They said Eisenberg was moved from Essex to the MDC, and not allowed to bring his discovery material with him. The SDNY prosecutors acknowledge that's a problem, but want only a one-week delay to December 11 - or to April, citing an unrelated murder trial.
On November 3, it was moved to April 2024. And on November 21, Judge Amit Subramanian set out questions to be answered in early December, including "Whether any transaction involving USDC, even where it is used as a medium of exchange to purchase something that is not a commodity, is nevertheless a “contract of sale of any commodity” given the statutory and regulatory definitions (see Dkt. 37 at 5-6); Whether the indictment alleges manipulation as to the price of USDC, deceptive conduct affecting the USDC market, or deceptive conduct otherwise “in connection with” a contract of sale of USDC (see Dkt. 37 at 7–8); Whether the indictment alleges a manipulative device “in connection with . . . any swap” where Eisenberg was the party on both ends of the MNGO Perpetuals" - full order and questions on Patreon here.
On March 14, 2024, there was a hearing on motions in limine and experts. Inner City Press live tweeted here
AUSA: We're getting toward a "code is law" inference...Question as to terms of service, in defi, who the duty is between... They will be arguing Mango Markets should have seen this coming Eisenberg's lawyer: What he did was not criminal.
On March 28 there was the final pre-trial conference, and Inner City Press went, here:
OK - now in criminal crypto case of US v Avi Eisenberg, at final pre-trial conference. He was brought in by US Marshals
Judge: What about they Touhy request?
Defense: The Government only gave us their objections yesterday... They are trying to use our client's tweets against him. AUSA: We have been making nightly disclosures of 3500 material
There was some back and forth on logistical issues - will Eisenberg come forward to sidebars with the judge? Defense: No, that would be a circus [the Marshals would go up with him, highlighting that despite the suit he is in detention].
We will continue to cover the case.
In a parallel civil case, on February 24, 2023 there was an hour and a half argument in Mango Labs v. Eisenberg before Judge Lewis J. Liman. Inner City Press live tweeted...
Ultimately Judge Liman extended the TRO for two weeks, after for two letters by Tuesday, and said he will rule on March 10.
On March 10, Inner City Press was there, thread here
On March 27, one of Eisenberg's counsel wrote in supporting his subpoena of Mango Markets founders Dafydd Durairaj and Max Schneider, noting that Durairaj "is expected to be a critical government witness."
On April 8, just before 5 pm, the 12 jurors and 3 alternates were selected. Inner City Press was there, observing from the gallery as Eisenberg whispered in the ear of one then another of his five lawyers, going over exhibits of text messages on the laptop before him. Judge Subramanian approved the defense's request to bring their client snacks, but deferred judgment on a number of exhibits.
On April 9 the trial began in earnest. Here were the opening arguments, thread.
On April 10, US expert witness Jain got grilled, amid more serious talk of DeFi, thread.
On April 11, the US evidence got more specific, and moved toward endgame, thread
On April 17, the defense closing and beginning of jury deliberation, thread
Watch this site.
Inner City Press will have more on these cases.
The criminal case is US v. Eisenberg, 23-cr-10 (Subramanian)
The stayed CFTC case is Communities Futures Trading Commission v. Eisenberg, 23-cv-173 (Schofield)
The Mango Labbs civil case is Mango Labs, LLC v. Eisenberg, 23-cv-665 (Liman)
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