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Do Kwon sentenced to 15 years in prison for $40 billion stablecoin fraud
Court Watch |
2025/12/11 21:52
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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
Legal 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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Former Honduras President Hernández freed after Trump pardon
Court News |
2025/12/02 21:39
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Former Honduras President Juan Orlando Hernández, sentenced last year to 45 years in prison for his role in helping drug traffickers move hundreds of tons of cocaine to the United States, was released from prison following a pardon from President Donald Trump, his wife announced Tuesday.
The U.S. Bureau of Prisons inmate website showed that Hernández was released from U.S. Penitentiary, Hazelton in West Virginia on Monday and a spokesperson for the bureau on Tuesday confirmed his release.
His wife Ana García thanked Trump for pardoning Hernández via the social platform X early Tuesday.
“After almost four years of pain, of waiting and difficult challenges, my husband Juan Orlando Hernández RETURNED to being a free man, thanks to the presidential pardon granted by President Donald Trump,” García’s post said. She included a picture of the U.S. Bureau of Prisons listing for Hernández indicating his release.
On Sunday, Trump was asked about why he pardoned Hernandez by reporters traveling with him on Air Force One.
“I was asked by Honduras, many of the people of Honduras,” Trump said.
“The people of Honduras really thought he was set up, and it was a terrible thing,” he said.
“They basically said he was a drug dealer because he was the president of the country. And they said it was a Biden administration set-up. And I looked at the facts and I agreed with them.”
Hernández was arrested at the request of the United States in February 2022, weeks after handing over power to current President Xiomara Castro.
Two years later, he was sentenced to 45 years in prison in a New York federal courtroom for taking bribes from drug traffickers so they could safely move some 400 tons of cocaine north through Honduras to the United States.
Hernández maintained throughout that he was innocent and the victim of revenge by drug traffickers he had helped extradite to the United States.
During his sentencing in New York, federal Judge P. Kevin Castel said the punishment should serve as a warning to “well educated, well dressed” individuals who gain power and think their status insulates them from justice when they do wrong.
Hernández portrayed himself as a hero of the anti-drug trafficking movement who teamed up with American authorities under three U.S. presidential administrations to reduce drug imports.
But the judge said trial evidence proved the opposite and that Hernández employed “considerable acting skills” to make it seem that he was an anti-drug trafficking crusader while he deployed his nation’s police and military, when necessary, to protect the drug trade.
Hernández is not guaranteed a quick return to Honduras.
Immediately after Trump announced his intention to pardon Hernández, Honduras Attorney General Johel Zelaya said via X that his office was obligated to seek justice and put an end to impunity.
He did not specify what charges Hernández could face in Honduras. There were various corruption-related investigations of his administration across two terms in office that did not lead to charges against him. President Xiomara Castro, who had Hernández arrested and extradited him to the U.S., will remain in office until January.
The pardon promised by Trump days before Honduras’ presidential election injected a new element into the contest that some said helped the candidate from his National Party Nasry Asfura, one of the leaders as the vote count proceeded Tuesday.
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Court official dismisses Justice Department’s misconduct complaint
Court Watch |
2025/11/28 21:37
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A court official has dismissed a Justice Department complaint that accused a federal judge of “hostile and egregious” misconduct during hearings for a lawsuit challenging President Donald Trump’s ban on transgender troops serving in the military.
The complaint accused U.S. District Judge Ana Reyes in Washington, D.C., of inappropriately questioning a government lawyer about his religious beliefs and of trying to embarrass the attorney with a rhetorical exercise during a February hearing.
In a Sept 29 order that wasn’t made public until Monday, Chief Judge Sri Srinivasan of the U.S. Court of Appeals for the District of Columbia Circuit dismissed the complaint. Srinivasan said a motion for Reyes’ recusal would have been the proper means for the Justice Department to contest her impartiality and seek her removal from the case.
The department didn’t explicitly ask for Reyes’ removal from the transgender troops’ litigation. And it didn’t file a petition for a review of the chief judge’s order, which didn’t reach any conclusions about the merits of the complaint’s allegations.
“If a party that believes a judge’s conduct in a case raises serious questions about her impartiality were to press its concerns in the ordinary way — by seeking her recusal in the case itself — the standards for resolving the matter are well established,” Srinivasan wrote.
The Justice Department had no immediate comment on Tuesday. Reyes declined to comment on the chief judge’s order or the department’s complaint.
The complaint was filed by Attorney General Pam Bondi’s then-chief of staff, Chad Mizelle, who has since left the department. Mizelle claimed Reyes’ behavior “compromised the dignity of the proceedings and demonstrated potential bias.”
“When judges demonstrate apparent bias or treat counsel disrespectfully, public confidence in the judicial system is undermined,” he wrote.
Mizelle’s complaint cited an exchange in which Reyes asked a government attorney: “What do you think Jesus would say to telling a group of people that they are so worthless, so worthless that we’re not going to allow them into homeless shelters? Do you think Jesus would be, ‘Sounds right to me’?” The attorney responded by saying, “The United States is not going to speculate about what Jesus would have to say about anything.”
The complaint also refers to a rhetorical exercise about discrimination. Reyes spoke of changing the rules in her courtroom to bar graduates of the University of Virginia law school from appearing before her because they are all “liars and lack integrity.” She instructed the government attorney, a graduate of the school, to sit down before calling him back up to the podium.
Reyes was nominated to the bench by President Joe Biden, a Democrat. Trump and Republican allies have mounted an escalating series of attacks against the federal judiciary since the start of his second term.
Trump’s Jan. 27 executive order claims without presenting evidence that the sexual identity of transgender service members “conflicts with a soldier’s commitment to an honorable, truthful, and disciplined lifestyle, even in one’s personal life” and is harmful to military readiness. It required Defense Secretary Pete Hegseth to issue a revised policy.
Six transgender people who were active-duty service members and two other plaintiffs seeking to join the military sued to challenge Trump’s order. Reyes blocked the order’s enforcement in March, ruling that it likely violates the plaintiffs’ constitutional rights. A federal judge in Washington state also blocked enforcement of the order.
Reyes agreed to suspend her order pending the government’s appeal, which hasn’t been resolved yet. But the U.S. Supreme Court has allowed the Trump administration to ban transgender people from the military in the meantime. |
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UAB football player accused of stabbing 2 teammates before game
Court News |
2025/11/23 21:35
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A University of Alabama at Birmingham football player stabbed two teammates Saturday morning hours before the team’s game against the University of South Florida, the university said in a statement.
The two wounded players were in stable condition, interim head coach Alex Mortensen said at the postgame news conference. He said the team decided to play to honor graduating seniors in the last home game of the season, though several players opted to sit it out due to the incident.
The teammate suspected in the stabbing was in custody, the university said. The school did not release the names of the players involved.
Daniel Mincey, an offensive lineman who transferred to UAB in May, was arrested and booked on charges of aggravated assault and attempted murder in the afternoon, according to Jefferson County Jail records. He was in custody in Birmingham and appeared to be the only UAB player who was arrested Saturday.
It was not immediately clear if Mincey had legal representation. Attempts to reach family members for comment were not immediately successful.
UAB officials would not confirm that Mincey was involved in the stabbing. The team’s online roster lists Mincey as a 6-foot-4 redshirt freshman from Pompano Beach, Florida, who was previously at the University of Kentucky.
Mortensen said that once the team decided to play, it focused on its normal game-day routines. He also said counseling was being made available for players who want it.
The coach declined to share further details about the incident, citing the ongoing investigation.
The stabbing occurred on campus at the Football Operations Building.
The Blazers lost 48-18 to South Florida to fall to 3-8 on the season and 1-6 in the American Conference. Their last game is Nov. 29 at Tulsa.
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