Editors Note: I am not writing this to encourage you to commit crimes; I am writing it because estimates are that the average person inadvertently breaks the law, violates a statute, disobeys a regulation, or does something else illegal between four and eight times per day. And that doesn’t count the legal things you might do that could get you arrested because it pisses off a cop or prosecutor. These days, we all need to be on our toes. Also, keep in mind that I am not a lawyer and this is not legal advice. or counsel. If you need a lawyer, get one.
Sam Bankman-Fried is finally in jail, and it is highly unlikely he will ever get out. His failed business, a collection of companies behind the FTX cryptocurrency exchange, appears to have lost, stolen, misplaced, borrowed, loaned out, lost track of, and otherwise squandered billions of dollars in investor and customer money. They charged him with eight counts, mostly related to defrauding large institutional investors and small account holders alike.
He also gave cryptocurrency a black eye. No, it is worse than that. He crushed crypto’s skull, knocking global acceptance of cryptocurrency back years and driving down prices. Bankman-Fried’s screw up is costing anyone who holds crypto , and it will take time and patience to see it bounce back.
Oh, and along the way he gave more than $60 million (that we know of) to democratic candidates and causes, money that may not have been his to give. His company reportedly had no controls in place, no risk management, and very few records.
Lesson # 1: Don’t Apologize
Bankman-Fried was either brilliant and has embezzled billions of dollars for his own future use, or he is an idiot who got in over his head until his idiocy caught up with him. I vote for the latter.
He’s also the poster child of what not to do when accused of a crime.
Bankman-Fried’s mistakes didn’t end with fraud. He not only screwed over his customers and investors, he screwed over himself. How? By apologizing.
Almost as soon as the news of record losses broke, Bankman-Fried started his apology tour. He’s said “I’m sorry” and “I f*cked up,” on multiple occasions to different audiences. He seemed to take responsibility for the company’s failure. That may sound like a stand-up thing to do, but accepting responsibility is a way of admitting guilt. That’s all the courts need to convict him. I predict he’ll be playing rummy in the prison lounge with other white collar criminals for decades.
Never say “I’m sorry” to the police. Don’t say it to the victims or their family. The only time you should say “I’m sorry” and show remorse is after you’ve been convicted and are trying to get a lighter sentence.
Lesson # 2: Lawyer Up
If Bankman-Fried had been smart enough to hire a good defense lawyer and a public relations firm or crisis management firm, things would have been different. Instead of apologizing, Bankman-Fried wouldn’t say anything and would not give interviews. His lawyer would issue a statement something like this:
“Mr. Bankman-fried is devastated to learn that these horrific financial losses took place on his watch. He trusted his staff, many of whom he considered friends, and is shocked they let him down. Sam is a big-picture guy, and while he was focused on building the business and raising capital, it appears people responsible for the company’s investments mismanaged its assets and may have committed fraud. He is prepared to cooperate fully with the government to help track down missing funds, crypto assets, and bank accounts. Mr. Bankman-Fried wants FTX’s customers and investors to know that he understands their anger at this situation because he feels it, too. Not only has he lost $20 billion of his personal net worth, he has lost his reputation.”
Would that earn Bankman-Fried any forgiveness? Probably not, but it might earn him some sympathy in front of a jury. If he lost money because he was trusting and naïve 30-year-old in over his head, the jury might forgive him. However, if he lost money because he lied to investors, didn’t buy crypto his customers ordered, transferred company funds to his personal accounts, and spent his ill-gotten gains on condos in the Bahamas and political donations, then no one is going to forgive him.
When you screw up so big it’s obvious to everyone, lawyer up. It can’t hurt.
Lesson 3: Never Admit Guilt
The fifth amendment is your friend. What do you say when the cop pulls you over and says, “Do you know why I pulled you over?”
Don’t say, “Because I was going 73 and the speed limits 65?” You just admitted to speeding. Better to say, “No sir, I have no idea.” Don’t be a wise ass and say something like, “You mean you don’t know either?” Just be polite and give them nothing they can use against you.
When they ask, “Do you know how fast you were going?” you can say, “I always try to drive the speed limit, officer.” Don’t incriminate yourself.
Lesson 4: Don’t Lie to the Police
If the police ever investigated you for shooting someone in self-defense, don’t apologize for it. Don’t tell the police you didn’t want to hurt your attacker. Don’t lie and say, “The gun just went off by itself.” Either say nothing and ask for a lawyer or make a brief statement in which you make it clear you were in fear of life and limb and shot the attacked to protect yourself and your family. Remember, you are the victim. The dead man was the criminal attacker.
For example, the dead guy is lying in your driveway on top of a three-foot section of 2×4. You can say something truthful, like, “I heard a noise near my car and I came out to make sure it was secure. Out of nowhere, this guy appears with a 2×4. He swung it at me and I backed away, but he followed me. I pulled my gun and screamed at him to drop it. He raised it up like a baseball player ready to hit a home run. I feared he would kill me, so I shot him until he fell to his knees and was no longer a threat.”
If they ask any more questions, say you’ll be glad to talk to them tomorrow in your lawyer’s office. If they threaten you with arrest or a jail, just ignore what is likely an empty threat. At this point, you’ve made your statement. Nothing you can say now will make you appear less guilty, but it might make you appear more guilty or be used to trick you up.
Speaking of lies, keep in mind that it can be a crime to lie to a federal officer. Better to say nothing.
Lesson 5: Don’t Change Your Story
The important thing here is that what you say has to be pretty darn close to what your neighbor’s doorbell camera is going to record. In this day and age, assume everything you do in public is recorded.
Don’t shoot your attacker and then head into the garage, grab a 2×4 and stick it under his arm. That’s another kind of lie and it’s as good as an admission of guilt. Doing that will turn an otherwise justifiable homicide into a felony conviction.
There’s a lot of room for crimes between a speeding ticket and justifiable homicide. These examples are two extremes. I expect you to fill in the blanks in between. No matter what the police are talking to you about, chances are good these rules apply. If they are interviewing you about a stolen TV or a dead cat, if you can’t say something very close to the truth without incriminating yourself, then say nothing at all.
Lesson 6: Don’t Repeat your Story or Statement
If you tell multiple versions of the story, law enforcement will paint you as a liar in court if it changes even a small amount. Did he swing the 2×4 at you two or three times? Did he come around the car or over the hood? Don’t change your story to make it sound “better.” You may think you are helping yourself, but the police will use this to brand you a liar and not credible. Juries don’t like liars.
This is another reason to have a lawyer. He won’t let the police badger you.
Lesson 7: Never Consent to a Search
Don’t let the police into your house or allow them to search your car unless they have a warrant. This goes for all law enforcement, especially the federal agencies like the FBI or ATF. They will try to intimidate you. They will threaten you. It is all bluster. If they had probable cause, they’d already have a warrant. They want consent. Don’t give it to them. Tell them they are trespassing and ask them to leave. In the case of Federal officers, call your local sheriff or police department and tell them someone claiming to be a police officer is trying to force their way into your house.
Don’t give law enforcement access to your phone, your tablet, your laptop or any other electronic devices. If you think they will seize your phone, turn it off. At the very least, it will slow them down.
Even if you believe you are as innocent as a newborn babe and have never committed a crime in your life, an officer given unfettered access to your home and phone will find something to hold over your head or threaten you with. For example, if your sister sent you a picture of her toddler running naked down the hall to the bathtub, they could claim this innocent image is child porn. Some officers may also stoop to planting evidence.
Don’t physically fight to prevent a search, but get it on record and on their badge cams that you don’t consent to a search. If they pull you over while driving and detain you after issuing you a ticket, ask if you can go. They should say yes. If they say no, ask if you are under arrest. Make them state why they are detaining you. Ask if you are free to go every five minutes. They can’t detain you forever without arresting you. At some point, they’ll have to let you go. When they do, drive carefully and obey every traffic law so they can’t pull you over again.
Lesson 8: It’s Not Illegal to Insist on your Constitutional Rights
The founders gave “we the people” the Bill of Rights to protect us from a tyrannical government. Don’t be afraid to use these tools if your local government representatives act a tad tyrannical.
For example, if a police officer came on my property, I would not let him tell me to disarm myself for his safety. If he feels unsafe, he can leave. I have a Second Amendment right to be armed, especially on my property. I’m not suggesting you point your weapon at him and ask them to leave. I’m just saying I won’t remove my holstered pistol simply because he or she feels uncomfortable in the presence of a law-abiding citizen exercising their rights.
Use your Fifth Amendment right and refuse to answer questions. The police may tell you they want a witness statement and you are not a suspect. What they mean is, “you are not a suspect, yet.” You are not required to give a statement, but there may be a fine line with obstruction of justice. Tell them you’ll be glad to come down to the station “when it’s convenient” and make a statement. Bring your lawyer.
You also have the right to privacy and to be secure in your papers. These days, that includes your phone.
Lesson 9: Beware of Situations when you Lose your Rights
Much of the dirt on Bankman-Fried came up only after FTX declared bankruptcy and a court-appointed expert took over the company. If Bankman-Fried had kept all the balls in the air for three more years, he’d have had three more years of freedom and might even have avoided the whole mess. If crypto soared, he might have been able to sell the company or resign and appoint some sucker to inherit and clean up his mess.
Keep in mind that there are things you do and places you go that subject you to a search and bring you to the attention of authorities. This can include visiting or crossing the border, flying commercial, entering a federal building or other facility with metal detectors, and visiting someone in jail. Likewise, large or frequent cash deposits, hiding cryptocurrency transactions, and suddenly coming into money can attract attention. If you do the latter, you need to have a good explanation. A legal explanation is even better.
Rather than hiding money, create an LLC and operate a company. With a competent accountant, your company can pay your cell phone bill, lease you a vehicle, buy dinner for your and friends, and send you to Hawaii for a conference, all while eating up income on which you might otherwise have to pay taxes. It’s not a scam, it just sounds like one.
Lesson 10: Don’t do the Crime if you can’t do the Time
Many criminals get caught, some sooner and some later, and a good chunk of those get convicted or take a plea deal. I don’t encourage you to break the law, and if you choose to do so, I encourage you to be aware of the consequences. I’d also rather you break the law intentionally, with forethought, rather than accidentally, because of ignorance. For example, depending on the state I am in and what is in my car, I either set my cruise control three miles above the speed limit or seven. I don’t leave it up to chance that a moment of inattention will have me going 80 in a 65 mile zone.
Likewise, if you choose to shoot someone in self-defense, go into knowing you may be arrested and charged and your legal defense will be expensive. Sometimes the district attorney won’t charge you; other times they will go out of their way to paint you as an evil gun owner who bought that gun with the sole intention of killing that poor boy who broke into your home and threatened you with a pry bar. It may depend on where you live. Just remember that going to jail is better than seeing your family beaten to death in front of you.