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Do Kwon sentenced to 15 years in prison for $40 billion stablecoin fraud
Attorney Interview |
2025/12/11 21:50
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Onetime cryptocurrency mogul Do Kwon was sentenced Thursday to 15 years in prison after a $40 billion crash revealed his crypto ecosystem to be a fraud. Victims said the 34-year-old financial technology whiz weaponized their trust to convince them that the investment — secretly propped up by cash infusions — was safe.
Kwon, a Stanford graduate known by some as “the cryptocurrency king,” apologized after listening as victims — one in court and others by telephone — described the scam’s toll: wiping out nest eggs, depleting charities and wrecking lives. One told the judge in a letter that he contemplated suicide after his father lost his retirement money in the scheme.
Judge Paul A. Engelmayer said at a daylong sentencing hearing in Manhattan federal court that the government’s recommendation of 12 years in prison was “unreasonably lenient” and that the defense’s request for five years was “utterly unthinkable and wildly unreasonable.” Kwon faced a maximum sentence of 25 years in prison.
“Your offense caused real people to lose $40 billion in real money, not some paper loss,” Engelmayer told Kwon, who sat at the defense table in a yellow jail suit. The judge called it “a fraud on an epic, generational scale” and said Kwon had an “almost mystical hold” on investors and caused incalculable “human wreckage.”
Kwon pleaded guilty in August to fraud charges stemming from the collapse of Terraform Labs, the Singapore-based firm he co-founded in 2018. The loss exceeded the combined losses from FTX founder Sam Bankman-Fried and OneCoin co-founder Karl Sebastian Greenwood’s frauds, prosecutors said. Engelmayer estimated there may have been a million victims.
Terraform Labs had touted its TerraUSD as a reliable “stablecoin” — a kind of currency typically pegged to stable assets to prevent drastic fluctuations in prices. But prosecutors say it was an illusion backed by outside cash infusions that came crumbling down after it plunged far below its $1 peg. The crash devastated investors in TerraUSD and its floating sister currency, Luna, triggering “a cascade of crises that swept through cryptocurrency markets.”
Kwon tried to rebuild Terraform Labs in Singapore before fleeing to the Balkans on a false passport, prosecutors said. He’s been locked up since his March 2023 arrest in Montenegro. He was credited for 17 months he spent in jail there before being extradited to the U.S.
Kwon agreed to forfeit over $19 million as part of his plea deal. His lawyers argued his conduct stemmed not from greed, but hubris and desperation. Engelmayer rejected his request to serve his sentence in his native South Korea, where he also faces prosecution and where his wife and 4-year-old daughter live.
“I have spent almost every waking moment of the last few years thinking of what I could have done different and what I can do now to make things right,” Kwon told Engelmayer. Hearing from victims, he said, was “harrowing and reminded me again of the great losses that I have caused.”
One victim, speaking by telephone, said his wife divorced him, his sons had to skip college, and he had to move back to Croatia to live with his parents after TerraUSD’s crash evaporated his family’s life savings. Another said he has to “live with the guilt” of persuading his in-laws and hundreds of nonprofit organizations to invest.
Stanislav Trofimchuk said his family’s investment plummeted from $190,000 to $13,000 — “17 years of our life, gone” during what he described as “two weeks of sheer terror.”
Chauncey St. John, speaking in court, said some nonprofits he worked with lost more than $2 million and a church group lost about $900,000. He and his wife are saddled with debt and his in-laws have been forced to work well past their planned retirement, he said.
Nevertheless, St. John said, he forgives Kwon and “I pray to God to have mercy on his soul.”
A prosecutor read excerpts from some of more than 300 letters submitted by victims, including a person identified only by initials who lost nearly $11,400 while juggling bills and trying to complete college. Kwon had made Terra seem like a safe place to stash savings, the person said.
“To some that is just a number on a page, but to me it was years of effort,” the person wrote. “Watching it evaporate, literally overnight, was one of the most terrifying experiences of my life.”
“What happened was not an accident. It was not a market event. It was deception,” the person added, imploring the judge to “consider the human cost of this tragedy.”
Kwon created an “illusion of resilience while covering up systemic failure,” Assistant U.S. Attorney Sarah Mortazavi told Engelmayer. “This was fraud executed with arrogance, manipulation and total disregard for people.” |
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Supreme Court hears Alabama appeal to execute intellectually disabled man
Attorney Interview |
2025/12/06 21:51
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The Supreme Court will hear arguments Wednesday in a case that could make it harder for convicted murderers to show their lives should be spared because they are intellectually disabled.
The justices are taking up an appeal from Alabama, which wants to put to death a man who lower federal courts found is intellectually disabled and shielded from execution.
The Supreme Court prohibited execution of intellectually disabled people in a landmark ruling in 2002.
Joseph Clifton Smith, 55, has been on death row roughly half his life after his conviction for beating a man to death in 1997.
The issue in Smith’s case is what happens when a person has multiple IQ scores that are slightly above 70, which has been widely accepted as a marker of intellectual disability. Smith’s five IQ tests produced scores ranging from 72 to 78. Smith had been placed in learning-disabled classes and dropped out of school after seventh grade, his lawyers said. At the time of the crime, he performed math at a kindergarten level, spelled at a third-grade level and read at a fourth-grade level.
The Supreme Court has held in cases in 2014 and 2017 that states should consider other evidence of disability in borderline cases because of the margin of error in IQ tests.
Alabama appealed to the Supreme Court after lower courts ruled that Smith is intellectually disabled. The justices had previously sent his case back to the federal appeals court in Atlanta, where the judges affirmed that they had taken a “holistic” approach to Smith’s case, seemingly in line with the high court ruling.
But the justices said in June they would take a new look at the case.
Alabama Attorney General Steve Marshall said Smith hasn’t met his burden of showing an IQ of 70 or below, and the state wrote in its brief that the discussion of a holistic approach is an unjustified expansion of the Supreme Court rulings.
“He has multiple scores in the 70s,” Marshall said in a phone interview. He said the question is about how to address a continuum of scores. “I don’t think picking and choosing those at the bottom are the way that the court will ultimately go,” Marshall said.
President Donald Trump’s administration and 20 states are supporting Alabama in the case. Smith “did not meet his burden of proving his IQ was likely 70 or below,” Solicitor General D. John Sauer wrote on behalf of the Republican administration.
Smith’s lawyers argue the lower courts followed the law in conducting a “holistic assessment of all relevant evidence” in a case with borderline IQ scores.
Rights groups focused on disabilities wrote in a brief supporting Smith that “intellectual disability diagnoses based solely on IQ test scores are faulty and invalid.”
Smith was convicted and sentenced to death for the beating death of Durk Van Dam in Mobile County. Van Dam was found dead in his pickup truck. Prosecutors said he had been beaten to death with a hammer and robbed of $150, his boots and tools.
A federal judge in 2021 vacated Smith’s death sentence, though she acknowledged “this is a close case.”
Alabama law defines intellectual disability as an IQ of 70 or below, along with significant or substantial deficits in adaptive behavior and the onset of those issues before the age of 18.
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Trump’s nominee to oversee jobs, inflation data faces shower of criticism
Attorney Interview |
2025/08/11 07:19
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The director of the agency that produces the nation’s jobs and inflation data is typically a mild-mannered technocrat, often with extensive experience in statistical agencies, with little public profile.
But like so much in President Donald Trump’s second administration, this time is different.
Trump has selected E.J. Antoni, chief economist at the conservative Heritage Foundation, to be the next commissioner at the Labor Department’s Bureau of Labor Statistics. Antoni’s nomination was quickly met with a cascade of criticism from other economists, from across the political spectrum.
His selection threatens to bring a new level of politicization to what for decades has been a nonpartisan agency widely accepted as a producer of reliable measures of the nation’s economic health. While many former Labor Department officials say it it unlikely Antoni will be able to distort or alter the data, particularly in the short run, he could change the currently dry-as-dust way it is presented.
Antoni was nominated by Trump after the BLS released a jobs report Aug. 1 that showed that hiring had weakened in July and was much lower in May and June than the agency had previously reported. Trump, without evidence, charged that the data had been “rigged” for political reasons and fired the then-BLS chair, Erika McEntarfer, much to the dismay of many within the agency.
Antoni has been a vocal critic of the government’s jobs data in frequent appearances on podcasts and cable TV. His partisan commentary is unusual for someone who may end up leading the BLS.
For instance, on Aug. 4 — a week before he was nominated — Antoni said in an interview on Fox News Digital that the Labor Department should stop publishing the monthly jobs reports until its data collection processes improve, and rely on quarterly data based on actual employment filings with state unemployment offices.
The monthly employment reports are probably the closest-watched economic data on Wall Street, and can frequently cause swings in stock prices.
When asked at Tuesday’s White House briefing whether the jobs report would continue to be released, press secretary Karoline Leavitt said the administration hoped it would be.
“I believe that is the plan and that’s the hope,” Leavitt said.
Leavitt also defended Antoni’s nomination, calling him an “economic expert” who has testified before Congress and adding that, “the president trusts him to lead this important department.”
Yet Antoni’s TV and podcast appearances have created more of a portrait of a conservative ideologue, instead of a careful economist who considers tradeoffs and prioritizes getting the math correct.
“There’s just nothing in his writing or his resume to suggest that he’s qualified for the position, besides that he is always manipulating the data to favor Trump in some way,” said Brian Albrecht, chief economist at the International Center for Law and Economics.
Antoni wrongly claimed in the last year of Biden’s presidency that the economy had been in recession since 2022; called on the entire Federal Reserve board to be fired for not earning a profit on its Treasury securities holdings; and posted a chart on social media that conflated timelines to suggest inflation was headed to 15%.
His argument that the U.S. was in a recession rested on a vastly exaggerated measure of housing inflation, based on newly-purchased home prices, to artificially make the nation’s gross domestic product appear smaller than it was.
“This is actually maybe the worst Antoni content I’ve seen yet,” Alan Cole of the center-right Tax Foundation said on social media, referring to his recession claim.
On a 2024 podcast, Antoni wanted to sunset Social Security payments for workers paying into the system, saying that “you’ll need a generation of people who pay Social Security taxes but never actually receive any of those benefits.” As head of the BLS, Antoni would oversee the release of the consumer price index by which Social Security payments are adjusted for inflation.
Many economists share, to some degree, Antoni’s concerns that the government’s jobs data has flaws and is threatened by trends such as declining response rates to its surveys. The drop has made the jobs figures more volatile, though not necessarily less accurate over time.
“The stock market moves clearly based on these job numbers, and so people with skin in the game think it’s telling them something about the future of their investments,” Albrecht said. “Could it be improved? Absolutely.”
Katharine Abraham, an economist at the University of Maryland who was BLS Commissioner under President Bill Clinton, said updating the jobs report’s methods would require at least some initial investment.
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Immigration judges fired by Trump administration say they will fight back
Attorney Interview |
2025/07/26 14:49
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Federal immigration judges fired by the Trump administration are filing appeals, pursuing legal action and speaking out in an unusually public campaign to fight back.
More than 50 immigration judges — from senior leaders to new appointees — have been fired since Donald Trump assumed the presidency for the second time. Normally bound by courtroom decorum, many are now unrestrained in describing terminations they consider unlawful and why they believe they were targeted.
Their suspected reasons include gender discrimination, decisions on immigration cases played up by the Trump administration and a courthouse tour with the Senate’s No. 2 Democrat.
“I cared about my job and was really good at it,” Jennifer Peyton, a former supervising judge told The Associated Press this week. “That letter that I received, the three sentences, explained no reason why I was fired.”
Peyton, who received the notice while on a July Fourth family vacation, was appointed judge in 2016. She considered it her dream job. Peyton was later named assistant chief immigration judge in Chicago, helping to train, mentor and oversee judges. She was a visible presence in the busy downtown court, greeting outside observers.
She cited top-notch performance reviews and said she faced no disciplinary action. Peyton said she’ll appeal through the Merit Systems Protection Board, an independent government agency Trump has also targeted.
Peyton’s theories about why she was fired include appearing on a “bureaucrat watchdog list” of people accused by a right-wing organization of working against the Trump agenda. She also questions a courthouse tour she gave to Sen. Dick Durbin of Illinois in June.
Durbin blasted Peyton’s termination as an “abuse of power,” saying he’s visited before as part of his duties as a publicly-elected official.
The nation’s immigration courts — with a backlog of about 3.5 million cases — have become a key focus of Trump’s hard-line immigration enforcement efforts. The firings are on top of resignations, early retirements and transfers, adding up to 106 judges gone since January, according to the International Federation of Professional and Technical Engineers, which represents judges. There are currently about 600 immigration judges.
Several of those fired, including Peyton, have recently done a slew of interviews on local Chicago television stations and with national outlets, saying they now have a platform for their colleagues who remain on the bench.
“The ones that are left are feeling threatened and very uncertain about their future,” said Matt Biggs, the union’s president.
Carla Espinoza, a Chicago immigration judge since 2023, was fired as she was delivering a verdict this month. Her notice said she’d be dismissed at the end of her two-year probationary period with the Executive Office for Immigration Review. |
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