FTX founder heads to US jail notorious for poor conditions

Sam Bankman-Fried will prepare for his fraud trial from a Brooklyn jail where inmates ranging from convicted sex trafficker Ghislaine Maxwell to Honduras' former president have complained of subpar conditions.

US district judge Lewis Kaplan in Manhattan ruled on Friday that Bankman-Fried, the founder of bankrupt cryptocurrency exchange FTX, must be jailed for tampering with witnesses while free on US$250 million (about RM1.1 billion) bond at his parents' home in Palo Alto, California.

Bankman-Fried, who has pleaded not guilty to fraud charges over FTX's collapse, will now be housed before his Oct 2 trial in Brooklyn's Metropolitan Detention Center, a far cry from the luxurious Bahamas resort where he lived until his December 2022 arrest and extradition to the US.

In recent years, MDC has been plagued by persistent staffing shortages, power outages and maggots in inmates' food. Earlier this year, a guard pleaded guilty to accepting bribes to smuggle in drugs. Public defenders have called conditions "inhumane."

In the winter of 2019, an electrical fire cut off the jail's lighting and heat for days as temperatures fell to near -18 Celsius.

Lawyers for Maxwell, who was convicted of recruiting and grooming teenage girls for abuse by the late financier and sex offender Jeffrey Epstein, said raw sewage seeped into her MDC cell. Her attorneys compared the "reprehensible and utterly inappropriate" conditions there to Hannibal Lecter's incarceration in the 1991 movie "The Silence of the Lambs", "despite the absence of the cage and plastic face guard."

They also cited "hyper-surveillance" by overbearing guards, a bad diet and sleep deprivation.

Maxwell was sentenced last year to 20 years and is being held at a prison in Florida.

A spokesman for the US Bureau of Prisons, which runs MDC, said in a statement the agency makes "every effort to ensure the physical safety of individuals confined to our facilities through a controlled environment that is secure and humane."

Founded in 1994, MDC currently hosts 1,608 inmates. It is now the jail housing detainees awaiting federal trials in New York City, after the Manhattan Correctional Center closed in 2021 for improvements. Epstein killed himself in his MCC cell while awaiting trial on sex trafficking charges.

Bankman-Fried's lawyers had urged Kaplan not to jail the 31-year-old former billionaire, in part because a "staffing crisis" at MDC meant there would be too few guards to escort him to a room where he could access computers to review prosecutors' evidence against him.

Kaplan said during the hearing that while MDC "is not on anybody's list of five star facilities," he was not sure whether housing Bankman-Fried at a minimum security jail in Putnam County, about 80km north of New York City, as prosecutors had requested, was "doable."

In a letter on Monday, Bankman-Fried's lawyers asked Kaplan to order MDC to provide their client with daily prescription medications for depression and attention deficit hyperactive disorder.

It is not Bankman-Fried's first time behind bars. In the Bahamas, he was held for nearly a week at the Fox Hill Prison, which a 2021 US State Department report said was plagued by rodents and a lack of toilets. Local authorities said in December conditions had improved.

Other high-profile inmates currently being held at MDC include Juan Orlando Hernandez, the former president of Honduras who has pleaded not guilty to drug trafficking charges, and Guo Wengui, an exiled Chinese businessman who has pleaded not guilty to fraud charges.

Hernandez' lawyers have likened his confinement conditions to those of a "prisoner of war." Guo's lawyers in March called MDC "an extraordinarily dangerous environment," citing a recent lockdown in response to an increase in contraband including weapons.