Samourai Wallet case prosecutors deny violating the Brady Rule

Prosecutors in the Samourai Wallet case have denied violating the Brady rule. According to a letter sent to the Southern District of New York (SDNY) filed today, the prosecutors mentioned that they did not withhold exculpatory evidence.

In the letter, the prosecutors also urged the judge to deny any request by Samourai for a late hearing to discuss the late disclosure of key information they obtained from the FinCEN two years ago.

Earlier in the week, Samourai had sent their letter to the judge, alleging that they had learned that FinCEN had strongly suggested that Samourai Wallet was not acting as a money-transmitting business. In the letter, they said that it was mainly down to the noncustodial nature of the product in a discussion between certain FinCEN members and the prosecutors on August 23, 2023.

Prosecutors deny violating the Brady Rule in the Samourai Wallet case

This new information came to light after the defense submitted a Brady motion. This motion was named after the Brady v. Maryland Supreme Court case, which occurred in 1963. The case established the Brady rule, which mentioned that exculpatory evidence should be provided to the defense so it can be used as part of the due process. In this case, the defense felt that the evidence was hidden, causing the need for a new hearing.

Also, since one of the two charges against the Samourai Wallet developers is conspiring to operate an unlicensed money-transmitting business, some people felt this new information might be grounds to dismiss the entire case. However, in the letter, the investigators specifically mentioned that they have no intentions of dropping the case. They also feel the defense has no special basis to demand a new hearing.

“There is no basis for a hearing, nor is there anything to remedy: the disclosure itself shows that the government has not violated Brady,” the prosecutors stated in the letter. “The Government disclosed all known substantive communications between the prosecution team and FinCEN months in advance of pretrial motions and trial.” The prosecutors also added that they want to go ahead with the case, noting that they are going to include a second charge, which is conspiracy to commit money laundering.

In their letter, they mentioned that Samourai helped launder over $100 million of criminal proceeds originating from questionable sources, including illegal darkweb markets like Silk Road and Hydra Market. They also added that they moved funds associated with wire fraud, computer fraud, and schemes that stole funds from their victims, including phishing and other schemes to defraud multiple decentralized finance protocols.

Prosecutors play down input from FinCEN communications

The prosecutors also mentioned that the fact that they recently disclosed their communication with FinCEN is irrelevant to the case, adding that much of the charged conduct does not rely on FinCEN regulations.

They downplayed the importance of the details shared by the FinCEN employees who spoke to the prosecutors. Kevin O’conner, Chief of FinCEN’s Virtual Assets and Emerging Technology Section in the Enforcement and Compliance Division, and Lorena Valente, an employee of FinCEN’s Policy Division, spoke with the prosecutors.

According to the prosecutors, the input from O’Connor and Valente was based on their individual processes, noting that they already provided “substantive email correspondence between the prosecution team and members of FinCEN relating to the August 23, 2023, call.” “The individual employees of FinCEN were not speaking on behalf of FinCEN, they were not providing FinCEN’s opinion, and they did not have a sense of what FinCEN would decide if this question were presented to their FinCEN policy committee,” they added.

In the letter’s final section, the prosecutors denied violating legal norms. “The record shows that there was no Brady violation in this case,” wrote the prosecutors. “The government disclosed the contents of this informal conversation to the defense in advance of pretrial motions and approximately seven months in advance of trial in response to a request for that information,” they added. “Nothing more is required.”

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