The Prosecutor Who Took Down Madoff on SBF's Defense

If you know anything about Ponzi schemes, you probably know Bernie Madoff, the financier who died in prison after pulling off the largest Ponzi scam in American history.

And arguably, nobody knows that fraud better than the prosecutor who took Madoff down — former lead prosecutor Marc Litt.

This week, in our ongoing Coinage series to investigate the defense provided to us by FTX founder Sam Bankman-Fried, we turned to Litt to test everything SBF is preparing to unleash at trial in October. (You can watch our interview going through all the details of SBF’s defense claims below, or read them here.)

Before we get into it, let’s make one thing extremely clear: FTX was not a Ponzi scheme. I say that because sometimes it’s tiresome to hear everyone describe crypto as a Ponzi scheme and I have to refute it. (Are there scams? Sure. But not every turkey sandwich is a footlong.) And to be fair, even Litt started our interview by noting FTX was a real business that was making money. It just so happens it collapsed and wound up with a multi-billion dollar hole and a lot of questions…

“It's not clear to me that this is exactly a Ponzi scheme, but securities fraud is securities fraud,” he told me.

And to be fair again, securities fraud is just one count among seven that SBF is about to go up against. He’s also going up against testimony from three alleged co-conspirators (including his former co-founder) who have already pleaded guilty to the very same charges Sam is facing, so… Sam must think he has a pretty solid defense, right?

Well, having heard it firsthand, I gotta say, it is compelling — so long as the facts presented match the defense’s case at trial. But first, Sam’s going to have to get at least a few jurors to start doubting the three-on-one. And how do you take down three people telling a story that’s different than yours?

“One at a time,” Litt says…