Yahoo Finance 'The existence is pretty bleak': The harsh conditions Sam Bankman-Fried will face behind bars
When a federal judge revoked bail for FTX founder Sam Bankman-Fried, the embattled crypto entrepreneur was sent to a crowded Brooklyn administrative prison known for grueling conditions as he awaits trial in October.
"The existence is pretty bleak," Christopher Zoukis, managing director of the Zoukis Consulting Group, told Yahoo Finance of the facility and those like it known as "MDCs," or Metropolitan Detention Centers.
Federal prosecutors had alleged Bankman-Fried, 31, violated his bail agreement by communicating with a New York Times reporter about Caroline Ellison, his former girlfriend who previously served as CEO of Alameda Research, an FTX-affiliated hedge fund that prosecutors claim Bankman-Fried used to misappropriate FTX customer funds.
Ellison has plead guilty to multiple fraud charges and entered a plea deal to testify against Bankman-Fried.
In December, the Department of Justice charged Bankman-Fried with multiple felonies, including wire fraud, securities and commodities fraud, money laundering, and campaign finance violations claiming he illegally used FTX customer and investor funds.
On Monday, prosecutors brought seven new campaign finance charges against Bankman-Fried.
Following his extradition from the Bahamas, SBF was granted bail to remain out of custody on the condition that he reside at his parents Palo Alto, Calif., home, with restricted mobility.
Bankman-Fried had posted a $250 million bond to remain out of custody while he awaited trial; typically, a defendant must pledge assets equal to around 10% of the bond amount.
Zoukis, whose firm specializes in federal prison policy matters, likened MDCs to purgatories for the facilities' role in housing inmates awaiting trial. He said MDCs offer inmates few freedoms, few activities, and minimal time outdoors compared to federal prison.
"It's like a county jail — by far the worst time anyone ever serves," he said of the high-rise, mostly indoor living quarters that aren't designed for long-term stays. "Prison is infinitely better."
'Locked in the bathroom'
During a bond hearing Friday, US District Judge Lewis Kaplan agreed with prosecutors who argued Bankman-Fried tried to influence the testimony of a key government witness — in this case Ellison — and remanded SBF to the custody of US Marshals.
The decision sent Bankman-Fried to await the conclusion of his October-slated trial at New York City's MDC Brooklyn unless he successfully appeals the ruling.
Attorneys for Bankman-Fried filed a notice saying they intended to appeal the decision.
The right to bail is governed by the Constitution's 8th Amendment, which prohibits excessive bail. In setting bail conditions, a judge is tasked with ensuring public safety and that the defendant will show up in court to face charges.
To guard against a defendant's flight risk, a judge can impose financial and other consequences that trigger if a defendant flees prosecution. In Bankman-Fried's case, the judge required that the former billionaire remain on home confinement with limited local travel, wear an ankle monitor, surrender his passport, and refrain from financial transactions exceeding $1,000.
Bankman-Fried will likely have the ability to remain out of his cell approximately three hours a day, make phone calls, and access education. High-profile inmates are often placed on a protective custody floor meant for safety.
In general, Zoukis said, MDC inmates live in a two-person cell with bunk beds, along with a toilet and sink.
"You're pretty much locked in your bathroom," he said. "And things like cockroaches and fruit flies, that's pretty common."
Comforts like extra blankets, additional clothing, and earplugs can be difficult to come by in MDCs, Zoukis added, explaining that the facilities lack the prison clerks who act as staff liaisons in longer-term detention centers.
MDC Brooklyn's inmates have included R. Kelly, Mexican drug lord Joaquín "El-Chapo" Archivaldo Guzmán Loera, accused child sex trafficker Jeffrey Epstein, Epstein's fixer Geraldine Maxwell, and Donald Trump's former lawyer Michael Cohen.
During the coed facility's most recent third-party review in October, auditors reported 1,718 inmates living in the building originally built for 1,000 inmates and converted to accommodate 1,583.
Alexis Keenan is a legal reporter for Yahoo Finance. Follow Alexis on Twitter @alexiskweed.
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