By Matthew Russell Lee, Patreon Maxwell Book
SDNY COURTROOM, June 14 - 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. The 21-page civil complaint is, as is often the case, more detailed...
On April 12, the US Attorney's Office filed a motion to intervene and stay the Mango Labs v. Eisenberg case, saying that neither side opposed the stay. The US seeks a "full stay until the conclusion of the parallel criminal case."
More on Substack here.
Later on April 12, Judge Liman approved the stay - and asked for a report... in one year: "ORDER: granting [53] Letter Motion to Stay re: [53] MOTION to Stay and Intervene. Accordingly, the case shall be stayed pending the criminal proceedings against the Defendant. The Government is directed to provide a status update to the Court in twelve (12) months and every six (6) months thereafter as to the status of the criminal case and whether the stay should be lifted. The Clerk of Court is respectfully directed to close Dkt. No. 53. And as set forth herein. SO ORDERED. (Signed by Judge Lewis J. Liman on 4/12/2023)."
On June 14, Judge Berman held a proceeding to pick a trial date. Inner City Press covered it, thread here:
AUSA: The government obtained a search warrant for Mr. Eisenberg's phones and one of his computers. They have the images - but they have some contraband on the devices... We'd like to set a trial schedule, and briefing schedule for any motion to dismiss
Judge Berman: We are thinking April 2, 2024 for trial.
Defense: How about December? Judge Berman: If something else were to fall out.
2d Defense counsel: I have another trial in the EDNY. But the defendant is out. So we'll take December and I'll move EDNY trial
Judge Berman: Any pre-trial motions? Defense: We anticipate a motion to suppress in mid July. And motions to dismiss.
Judge Berman: OK. How long a trial?
AUSA: Our case, a week and a half.
Judge Berman: I exclude time until the Dec 4 trial date.
Watch this site.
Back on March 13, in light of the criminal case, the CFTC and SEC cases were ordered stayed: "MEMO ENDORSEMENT granting [14] Motion to Stay re: [14] MOTION to Stay . ENDORSEMENT: For substantially the reasons stated in the Government's memorandum of law, the motion by the United States to intervene in both matters is GRANTED, and both matters are STAYED, including for purposes of discovery, until the conclusion of the criminal case, United States v. Eisenberg, 23 Crim. 10. By two weeks after the conclusion of the criminal case, the parties in each case shall file a joint letter and a proposed civil case management plan and scheduling order as required by the Order scheduling the initial pretrial conference. The initial pretrial conferences scheduled for March 29, 2023 are ADJOURNED sine die.. (Signed by Judge Lorna G. Schofield on 3/13/2023)."
The same day the criminal complaint was unsealed, Inner City Press repeatedly checked the SDNY Magistrates Court but it was locked. But the complaint in this case charges that Eisenberg "engaged in a scheme involving the intentional and artificial manipulation of the price of perpetual futures contracts on a cryptocurrency exchange called Mango Markets... which has its own native crypto token called MNGO."
The unsealed complaint is now on Patreon here
On January 30, 2023, District Judge Liman held a hearing on Mango Labs LLC's order to show cause - but no one was there for Eisenberg. In fat, Inner City Press was the only person in the courtroom gallery. Here's some tweets 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:
OK- now at arraignment of Avi Eisenberg, who unlike Sam Bankman-Fried is in detention, brought in by Marshals in a yellow prison jumpsuit.
Judge Berman: How do you plead?
EISENBERG: Not guilty.
Klein (who repped Virgil Griffith): We are being retained. Judge: March 14 at 1 pm. That's it.
This next session, now described as a bond hearing, came up on February 24 during an hour and a half argument in Mango Labs v. Eisenberg before Judge Lewis J. Liman. Inner City Press live tweeted, thread here:
OK- now in Mango Labs v Avi Eisenberg, preliminary injunction argument. Mango Labs accuses EIsenberg of "unlawful threat."
Judge Liman: This is about tokens, but could just as easily be about securities. Couldn't the individual tokenholders have sued?
Mango Labs' Morrison (MoFo) counsel: it was duress. They were skitish he would just run off
MoFo: He used the passport of a Ukrainian woman to open an account on a third party exchange to pump the price of Mango. He is a criminal - Judge: He is presumed innocent
Eisenberg's lawyer: At first we didn't know much about Mango Labs...We still question their standing.
MoFo: Eisenberg is a bot trader, the assets can move even though he's locked up in Essex [Eisenberg's civil counsel says bond hearing March 14]
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:
OK - now in court for ruling in Mango Labs v Avi Eisenberg, empty gallery unlike for #SBF in an hour.
All rise!
Judge Liman: I will give you my decision on the requested injunction, orally. Of $114 million, he returned $67 million. There are 4 causes of action: fraud, duress. There is a criminal case and defendant is detained. The US seeks forfeiture.
Judge Liman: The Court ordered service on defendant Eisenberg upon his arrival in NY [from detention in Puerto Rico]. DOJ has also been notified by Mango Labs, but has not intervened. I find Mango Labs has standing...
Judge Liman: The settlement agreement with Mango DAO does not preclude Mango Labs' standing. NY law applies here. On the preliminary injuction factors, I find plaintiff has NOT shown a likelihood of success on the merits. [NOT- Mango Labs failed on factor 1]
Judge Liman: Can the settlement be voided as the product of duress? No - the token holders rejected an initial proposal. They exercised their free will. And it was later ratified, constructively.
Judge Liman: Eisenberg's alleged use of a Ukrainian woman's identity does not change the duress or fraud analysis. [But may be used in criminal prosecution]
Judge Liman: Nor has there been a showing of irreparable harm. [Mango Labs' "Big Law" counsel has chin in hands. On the courtroom coat rack, a red scarf emblazoned LFC - Liverpool Football Club. Come on, you reds]
Judge Liman: All three factors fail. Preliminary injunction is denied. Mango Labs' lawyer: Continue TRO 7 days, to tell DOJ? We may appeal
Judge: OK- until March 15. And next conference April 17.
More with analysis on Substack here
Watch this site.
Inner City Press will have more on these cases.
The criminal case is US v. Eisenberg, 23-cr-10 (Berman)
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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