by Matthew Russell Lee, Patreon Book Substack
SDNY Exclusive, Sept 24 – A man charged with financial and cryptocurrency fraud, whose son as already pleaded guilty, was arrested and presented on July 5 before U.S. District Court for the Southern District of New York Magistrate Judge Jennifer E. Willis. Inner City Press was there, the only media in the courtroom. Thread.
AUSA: He and his son victimized 20 people for over $10 million, offering crypto through other family members' bank accounts. He has a history of mental health issues and oxy use, living a nomadic lifestyle
AUSA: He serially opened free 1 month gym memberships in variations of his name.
Defense: He has A.D.D. and used fentanyl only once, by mistake, in 2021. He is not affluent - look, he is here in short and a T-shirt.
Judge Willis has returned to the bench and notes that defendant didn't flee after son's plea. He is being released tonight, with no GPS yet, with 2 days to come up with a co-signer.
Jump cut to August 7 - the conditions still no yet, Austin reappeared in Mag Court. Inner City Press went, thread:
OK - now Eugene Austin is in Mag court, in a track suit. Conditions of bail not met.
Judge Gorenstein: why didn't you seek an exrension? Defense counsel (by phone) US wanted this hearing. Because of publicity, no one will sign.
Judge: He could be remanded right now. Did you see my email? When can you come in person?
Defense: Tomorrow afternoon?
Austin is sitting at defense table in his track suit.
Judge comes down off bench to look at big View Sonic computer monitor, says Maybe the email wasn't sent. Or, it was in my order.
Defense lawyer: I couldn't open my email. Judge: It's an order on ECF. Defense: I want a modification, not an extension.
Judge: Lot of mysteries here. I'm on the brink of remanding him, but I'd like you to be present if I do. Do you hear me? Defense: No, there is an echo.
Now judge speaking softly directly into phone.
Defense: I'm leaving the country Thursday at 10 am.
Judge: Wednesday at noon. Have the Marshals present.
Afterward Austin said he left his phone at home because he thought he'd be remanded today. So the non-appearance (in person) and non-filing may have won him two days - or more.
On August 8, the US opposed Austin's motions for more time, acknowledging that a potential co-signer had been served with a grand jury subpoena but adding that "the defendant does not allege that the Government threatened this co-signer." His sister Margaret Cherpak "apparently has been unwilling to post her home to securte the defendant's appearance in court."
On August 9 Austin and his lawyer were in the Mag court in person, as was Inner City Press. Thread:
OK - Accused crypto fraudster Hugh Austin, last here Monday in a tracksuit, is back in SDNY Mag court in a blue Oxford cloth shirt, untucked.
Defense: His sister has no equity in her Port Jefferson house. Austin: She's working with lawyers.
Judge: The money is not important. You need two more co-signers. Defense: Give him two weeks. AUSA: He can seek them from a phone in jail.
AUSA: He's reaching out to victims. Judge: I'll give him, to find 3 co-signers, until August 23, 11 am. No co-signers, expect remand.
Question: But can the Magistrate Judge on duty on August 23 be bound by this?
Apparently not. When Austin showed up at 11 am on August 23, Inner City Press was there. Austin's lawyer said Austin's ex-wife had been about to sign until her new husband got involved. He was given until August 25 at 10 am. Thread:
Austin has not found the co-signer. His ex-wife was going to, defense says, until her new husband got involved. Judge: He's been given time....
Judge: If he finds one, he could be released. Defense: Just a few more days. Judge: What will change?
Defense: One day we'll be before a judge who won't take any more. Judge: This may be the day. I may be the judge.
AUSA: We may interview a prospect on Friday. Defense: How about his former mother in law, now that Ms Walker backed out.
Judge: I'll give you to Friday 10 am - satisfy the bond or remand, no hearing needed.
Next, after a continuance in the interest of justice, Austin was indicted on October 4, and the case assigned to Judge Jennifer H. Rearden.
On October 11 it was reassigned to Judge P. Kevin Castel, to whom Austin's counsel wrote on November asked for Hugh Austin to meet without counsel present with his son Brandon who has pleaded guilty and is set to be sentenced on February 22, 2024 - by Judge Castel.
On December 7, Judge Castel approved two in-person meetings a month, outside the presence of counsel.
On July 24 Brandon Austin's Federal Defender asked to delay his surrender from July 30 to August 8 so Brandon can responded to the government's subpoenas "in connection with Hugh Austin's upcoming trial."
The son's case is US v. Brandon Austin, 23-cr-199 (Castel)
On July 29 the US Attorney's Office filed its motions in limine, including arguing that "evidence of the defendant's failure to file tax returns or report income from the charged crimes is admissible as direct evidence or pursuant to Rule 404(b)." There is be testifying victims 1, 2, 3, 4, 10 and 16.
On September 11, Judge Castel addressed motions in limine, Inner City Press was there, from the thread:
AUSA: He didn't file tax returns for years, in one year he filed he made $1. Defense: They had a problem with their accountant. He didn't show tax returns to clients [Note is passed at defense table]
Judge: Not filing fraudulent income with the IRS can show consciousness of guilt - I find that the evidence is admissible
Judge Castel then brought up US v. Saint Clair, another of his cases which Inner City Press covered....
On September 18, from thread:
Defense lawyer: Wasn't it Brandon Austin who sent you the fake wire transfer documents? Witness: Yes. Defense: And my client Hugh Austin reached out to you saying he'd try to pay you back? Witness: No, I reached out to him first
Next witness is in from California, from a failed "social music streaming" service. She identifies the defendant, says she met him in the Napa Valley in 2019 and he claimed to have a network of "super high net worth individuals" including athletes to invest
On September 19, document after document went into evidence, with stipulations about whose cell phone and email address was whose.
On September 20, a cooperator was on the witness stand. Thread
On September 23, a show of texts from victims, cross about who really sent the replies, and then they rested. Thread
back in US v Austin crypto fraud trial, prosecutor questioning Special Agent about blockchain data, transfers of Bitcoin to Coinbase account. AUSA: What is this? Special Agent: It's a chart of data from the ethereum blockchain, in Tether, tracking the US dollar. Judge: We'll take a break.
We're back. Shown to jury, an email from the defendant claiming that the current witness was the receiver on a Bitcoin transaction. AUSA: Were you? Witness: No.
5:13 PM update - both sides have just rested in US v Austin
On September 24 the jury returned guilty verdicts on all three counts; sentencing was set for February 20, 2025 at 11 am.
The case is US v. Austin, 23-cr-508 (Castel)
More including on son's case on Substack here
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