Samourai’s wallet prosecutor says that the delayed Finsen disclosure was not a Brady violation

Prosecutors in the Samourai wallet case have denied accusations that they had suppressed significant evidence in the criminal case against two co-founders of Crypto Mixing Service, Keonne Rodriguez and William Lonergan Hill.

In a letter to the court filed Friday, prosecutors urged Judge Richard Berman of the Southern District of New York (SDNY) to deny the recent motions of Rodriguez and Hill, and sued a hearing to litigate the government’s negligent disclosure of conversations between prosecutors and the Financial Services Enforcement Network (FINCEN). In that conversation, six months before the charges were filed, Fincen officials told prosecutors that Samourai Wallet did not meet the definition of a remittance business and therefore did not require a license to operate.

Despite Fincen’s guidance, prosecutors proceeded with their case, claiming one conspiracy each with both Rodriguez and Hill, and committed a conspiracy to run a money laundering and unlicensed remittance business. Through Samourai Wallet, prosecutors allege that the two men “intentionally and successfully washed over $100 million in all types of crime proceeds” and explicitly sold the services to “Dark/Gray Market participants,” including hackers and fraudsters.

By not defending communications with Finsen until last month, Rodriguez and Hill’s lawyers say the government violated legitimate proceedings – the so-called Brady violation was a landmark Supreme Court lawsuit v. It was named after Maryland. Manners.

However, prosecutors have denied committing a Brady violation in the Samourai wallet case. In a letter to the judge, they set out many reasons why the timing of Fincen’s disclosure of conversations is fair play. First, they argued that the conversations with Fincen employees were not formal discoveries by the regulators themselves, but rather “personal, informal, warned opinions” about whether Samourai’s wallets should be registered as a remittance business.

“The court has repeatedly held that these types of legal opinions, or any kind of opinions, are not Brady material. The facts are Brady material,” the prosecutor wrote.

Prosecutors also said that even if the documents were related to the defense’s case, they handed it over to the defense seven months before the trial.

In their own letter to the court earlier this week, Samourai Wallet’s lawyers said their clients were unfairly biased by their lack of government disclosure, arguing that this could have influenced the judge’s bail decision or the court’s decision.

Prosecutors opposed the argument, with most of the lawsuit against Samourai’s wallet not tied to remittance requests, instead tied to Rodriguez and Hill’s suspicious money laundering scheme.

The presence before and after a potential Brady violation comes after the defense asks the prosecutor to remove their case under the auspices of the so-called Blanche Memo. Under Blanche’s memo, the prosecutor was ordered to halt pursuit of lawsuits against crypto exchanges or mixed services for end-user actions.

Following the request, prosecutors met with the defense on April 10th to consider the request. Almost a month later, the government has yet to reach a decision.