There are several parallels between the criminal cases of Richmond businessman Michael Hild and that of notorious crypto king Sam Bankman-Fried.
Each man is charged with various degrees of financial fraud that led to the collapse and bankruptcies of their respective firms – Hild’s Chesterfield-based Live Well Financial and Bankman-Fried’s FTX.
Both men are fighting their legal battles in federal court in Manhattan and, until late last month, both their cases were presided over by the same judge, U.S. District Court Judge Ronnie Abrams.
That was until Abrams recused herself from the high-profile Bankman-Fried case on Dec. 23, citing the fact that the law firm at which her husband is a partner had previously represented FTX.
Now, as Hild is set to go before Abrams for sentencing later this month, he and his attorney are seizing on that recusal, questioning whether the judge may have had similar personal conflicts during Hild’s case to those that led to her exit from the Bankman-Fried legal saga.
In a Dec. 28 letter to Abrams, Hild attorney Brian Jacobs claims that Abrams’ husband’s law firm, Davis Polk, may have represented several companies that were entangled with Hild’s case.
“In the present case, as in the FTX matter, the law firm of (Davis Polk) – according to its attorneys’ online biographies – appears to have represented multiple parties whose interests are potentially adverse to Mr. Hild’s,” Jacobs’ letter states. “I write to ask that the Court address whether possible conflicts in this case should have led this Court to disqualify itself…I further ask that the Court address this matter in advance of sentencing, which is currently set for Jan. 27, 2023.”
Jacobs claims that Davis Polk “appears to have” represented two of Live Well’s major lenders: Industrial and Commercial Bank of China, and Mizuho Bank. Both banks are among the larger creditors in Live Well’s ongoing bankruptcy proceedings and also are among the victims and potential recipients of restitution in the Hild criminal case.
Jacobs also states that a former partner at Davis Polk appears to be a board member at ICBC. Jacobs argues that illustrates a potentially close relationship between the law firm and the lender.
Davis Polk, according to Jacobs’ letter, also appears to have represented the owner of Interactive Data Corp., a financial instrument pricing firm that was a major point of contention during Hild’s trial.
While the potential conflicts cited by Hild and Jacobs would appear to be indirect, so were those referenced by Abrams in her recusal notice in the Bankman-Fried case: “My husband has had no involvement in any of these representations. These matters are confidential and their substance is unknown to the Court. Nonetheless, to avoid any possible conflict, or the appearance of one, the Court hereby recuses itself from this action.”
An email to Jacobs for comment was not returned Monday afternoon.
Abrams has yet to respond to or rule on the matter, which comes just four weeks before Hild is set to be sentenced for a bond pricing scheme that doomed the once-fast-growing Live Well.
Hild was found guilty on all counts by a jury in an April 2021 trial and has since unsuccessfully attempted to have the conviction overturned. Last month Abrams ruled against Hild’s months-long claims that his previous attorney was conflicted to the point of being wrongfully ineffective during the trial.
Hild faces a maximum of 115 years in prison, though Abrams will ultimately decide his fate on Jan. 27.
Bankman-Fried, who only was charged in recent weeks and has yet to stand trial, also faces a max of 115 years.
Like Hild, Bankman-Fried is set to plead not guilty, according to news reports. Also similar to the Hild case, two of Bankman-Fried’s top lieutenants have pleaded guilty to similar charges in exchange for cooperation with prosecutors.
Live Well’s former CFO Eric Rohr and head bond trader Darren Stumberger pleaded guilty and were key witnesses during Hild’s trial. They await their sentencing hearings, which have been delayed until the conclusion of Hild’s case.