On Thursday July 28th judge Joseph N. Laplante concluded the sentencing hearing for Crypto6’s Mr Nobody with a ruling to the maximum degree possible in his favor, and below is a run down of the defenses, prosecutors, and judges thoughts and arguments.
For more detail of what happened and a bit of a backstory on the sentencing check out Freedom Decrypted episode 170 where we covered the pre-sentencing motions that went into the variance granted (or in other words the request to reduce the sentence below that typically authorized by the sentencing guidelines).
The notes from the sentencing hearing are as follows:
– Mr Nobody is pleading guilty to a single count of wire fraud
Judge opens with a speech on the sentencing guidelines being the guiding force behind determining the sentence, but are not a hard rule to be followed, and he can sentence Mr Nobody outside of the guidelines.
There is a sealed pre-sentencing report that was created by the court of which came to 26 pages in length. Unfortunately due to certain information contained within it is sealed, but this is for Mr Nobody’s benefit and it may be that this report can be released by him and/or released by him with appropriate sections redacted. While this may not be relevant to Mr Nobody’s sentencing report the type of information that can be included includes information such as histories of mental illness that would be inappropriate to release to the public. Our opportunity as the public therefore to be outraged by the malicious, manipulative, or outright lies contained in it must therefore be reserved till a later date.
Possible outcome based on sentencing guidelines and guilty plea:
The guidelines recommend:
– 10 to 16 months imprisonment
– 2 to 5 years of supervised release
– A fine of $2,000 to $1 million dollars
The judge noted that there was no request by the defendant for a departure from the guidelines. However the defence requested a variance from the guidelines which is a little different. At this point Nobody’s lawyer Anessa Allen Santos requested the guidelines be dropped.
Anessa Allen Santos’s argument as to why the guidelines should be dropped:
– the regulatory framework for crypto is evolving and this speaks to the nature of the offence
– there are more than 4 different agencies providing differing and conflicting sets of rules and decisions
– there is confusion amongst federal agencies as to whether crypto is a security or a commodity
– it has shifted from being a medium of exchange to a commodity and now to a currency
– bitcoin is now being called a currency by federal regulators
– Mr. Nobody took extra steps to be compliant with the law including getting legal opinions from regulators and lawyers
– While Nobody may have lied to a bank he was under the impression that the bank was asking about his business for its personal benefit in order to stamp out the competition that is bitcoin and he believed they had no right to inquire
– Simply put there was never any malice in any actions for which he is accused
– The federal framework differs from the state
– Mr Nobody obeyed pre-trail release conditions in spite of the governments claims that he was a violent threat to law enforcement
– 3 points in regard to prior convictions
1. His prior convictions revolve around weed
2. The laws on weed have dramatically changed
3. The totality of the circumstances
Basically if he was sentenced today the outcome would be different and this means there is justification for reducing the points in the sentencing guidelines by 3. This would reduce the time he should serve by 2 to 6 months.
The judge at this point says Mr Nobody’s conduct does not evidence a lack of respect for the law and he clearly took measures to be legally compliant.
The judge asks questions to determine whether or not Mr Nobody would be harmed by further cage time and wants to know how his client is living.
The defendent isn’t quite following the nature of the question however and responds with:
– He’s a computer programmer
– He gets by off donations
– He would be harmed if he couldn’t work, and he can’t program if dead
– The nature of his work is open source
The judge responds clarifying whether or not cage time would be disruptive to livelihood:
– Mr Nobody clarifies that he was a well renowned programmer who had previously worked for citi bank, and his current efforts are in some respect necessary to show that after a decade of activism he’s still a capable programmer
The judge asks about his sources of income and the defence responds with:
– p2p crypto
The judge returns with: The question he really wants to know is can Mr Nobody support himself.
The answer to this is that pulling him out of the marketplace would make it more difficult for him to support himself. Currently he has a community upon which he has relied to get him through these trying times, and should he be sentenced to further jail time he would likely lose that and face further hardships.
Prosecutor responds and makes the following point:
– This is a strict liability law implying whether he intended to break the law or not is irrelevant
The prosecutor goes on to defend the law and it’s reason for existing for which he has plead guilty and claims without any evidence that they “advertised to scammers”.
The prosecutor goes on to talk about the proffer. A proffer is a mechanism to offer or present evidence at trial for immediate acceptance or rejection.
Basically what the prosecutor is saying is that when Nobody was presented with the evidence of scammers utilizing the purchased crypto he was not OK with that.
At this point the judge starts talking about the amounts of money that went through “Ian’s business” completely leaving out it was the Shire Free Church’s business. None the less he says that of the 23 million 2 million of this was through Mr Nobody’s bank account(s).
In regard to the money judgement
The defence responds to arguments pertaining to prior motions filed by the prosecutor concerning sentencing where the prosecution falsely claimed that the “business” was charging excessive fees at “ATMs” and this is somehow evidence of malice.
In fact Anessa Allen Santos’s states this is a malicious attempt at confusing the court as the fees were in line with equivalent vending machines and neither ripped off customers nor were a premium of any kind. Online exchanges don’t have the same costs as vending machine operators who must rent space and provide a different kind of service.
Nobody speaks about his intent:
Nobody says he worked inside of the banking system and from his first hand experience saw how it was setup to create two classes of people. The reason he got into selling crypto was because he saw how it could free people from the need to seek permission of government. No longer would you need a million dollars in order to get in on the market. There is something called a “qualified investor” and unless you are a qualified investor you can’t partake in the market. Nobody was trying to protect those who he sees as being robbed by the dollar’s decline in value. By comparison the wealthy classes were able to float on their investments and assets that went up with inflation whereas everyone else lost out.
He went on to say the poor are victims of the federal reserve banking system.
Judge asks what changed your mind about the crypto sales:
He said that the thing that changed his heart (in regard to the proffer) were that some people were hurt by third parties.
Nobody goes on to say that “our side” or that he and his co-defendants would never have knowingly taken proceeds from victims who were being defrauded.
He also pointed out that he didn’t do customer service and wouldn’t have known if someone was being defrauded in the first place. He simply couldn’t have known what was going on even if Ian had been taking proceeds of victims of fraud.
The judge asks some questions about how Mr Nobody came to be a computer programmer:
Nobody responds that he was self taught, but also got certifications in college.
The judge also wants to know how he ended up in New Hampshire. To which Mr Nobody responds that he moved for the Free State Project which is a migration of libertarians to the state of New Hampshire to further the cause of liberty in our life time.
Judge says he’s going to sentence Mr Nobody to time served.
The judge believes that 5 ½ months is not a small thing and is the “right sentence”.
The judge gives an opinion that the “record overstates danger” of Mr Nobody and he does not want to cause problems for Mr Nobody due to a tough economy. He thinks Mr Nobody can support himself and if he didn’t do this there would be a risk of Mr Nobody getting COVID. Undermining Mr. Nobody’s ability to feed and house himself and the combination of the circumstances lead him to believe it would not be in the public’s interest to sentence him to further cage time. However a couple of years of supervised release is appropriate alongside some conditions.
The judge also said his only real request is that Mr Nobody not test the permissible bounds of his conditional release which will include:
– 2 Years of supervised release
– Report to probation today
– No lawbreaking
– No illegal substances
– 3 drug tests
– Provide a DNA sample
– Submit to substance abuse treatment
– Pay for cost of testing should he be so able
– Provide access to financial info
– Not open any credit lines without approval from probation
– Submit to search by probation (if suspicion of violation occurs)
– $100 (court costs?)
– Pay a $2,000 fine
The prosecutor then asks the court to grant a forfeiture.
Note: There is also a forfeiture order of ~$10k not mentioned which appears to have been agreed to by the defendant. Which is a bit alarming given the millions of dollars spent by the government to prosecute an individual the government and courts knew full well and was concerned of being indigent (or in other words lacking even the most minimal financial resources to sustain themselves).