Prosecutors in the case of Samaurai’s wallet have refused accusations that they have stopped critical evidence in their criminal case against two co-founders of Crypto Mixing Service, Keonne Rodriguez and William Lonergan Hill.
In a court letter filed on Friday, prosecutors encouraged Judge Richard Berman of the Southern District of New York (SDNY) to refuse Rodriguez and Hill’s recent movement for a hearing to overlook the government’s tardy disclosure of a communication between prosecutors and the Financial Services Enforcement Network (FINANCIAL SERVICES ENFORCEMENT NETWORK (FINCEN). In that conversation, which took place six months before the charges were filed, Fincen officials told prosecutors that the Samaurai Wallet did not meet their meaning of a business that sends money and thus does not require a license to operate.
Despite Fincen’s guidance, prosecutors preceded their case, charging Rodriguez and Hill with a number of each conspiracy to make money in launching and conspiracy to operate an unlicensed business -sending business. Through the Samaurai Wallet, prosecutors said the two men were “intentionally and successfully -laundered by more than $ 100 million in all kinds of crimes” and explicitly sell their services to “dark/color -colored market participants” including hackers and fraud.
By not telling the defense about their conversation with Fincen until last month, lawyers for Rodriguez and Hill said the government violated the appropriate process-a so-called Brady violation, named for landmark Supreme Court Brady V. Maryland in 1963, where the court took place the government should give any crime way.
However, prosecutors have denied that they have committed any violations of the brady in the case of the Samaurai wallet. In their letter to the judge, they laid down a host of factors that the timing of their disclosure of Fincen talk was fairly playing. First, they argue that their conversation with Fincen employees represents their “individual, informal and caveated opinion” if the Samaurai wallet is required to register as a business that sends money, rather than a formal search of the regulator itself.
“The courts have repeatedly held that these types of legal opinions – or opinions of any kind – are not material brady; the facts are Brady material,” the prosecutors wrote.
The prosecutors also said that, even though the material was related to the defense case, they returned it to the defense of seven months in advance of the trial, writing: “There is no need for court intervention when the defendants received the detection materials in advance of the test to effectively use the information.”
In their own court correspondence earlier this week, lawyers for the Samaurai wallet said their clients were not fairly prevented by the lack of government disclosure, which focus on the decision of the judge’s judge’s bail or the court’s decision on an early movement to eliminate the case.
The prosecutors pushed back against this argument, saying that most of the case against the Samaurai wallet was not tied to the money sending the charge and instead tied to Rodriguez and the alleged money laundering scheme – the more serious of the two charges against them, carrying a heavy 20 -year maximum prison.
Brady’s back and forth potential violation came after the defense asked prosecutors to drop their case under auspice of the so-called Blanche Memo, a Recent memo From the Deputy Attorney General Todd Blanche, who ordered the staff of the Department of Justice (DOJ) to narrow down their crypto implementation priorities. Under the Blanche memo, prosecutors were ordered to stop chasing the trial against crypto exchanges or mixing services for the actions of their end users.
Following the request, the prosecutors met with the defense to consider the request on April 10. About a month later, the government still had not reached a decision either, that some former SDNY prosecutors were described as unusual talks with CoinDesk.
