US Government Seeks Reconsideration of Franks Hearing in Cryptocurrency Theft Case
On Thursday, May 22, 2025, the United States government submitted a reply in support of its motion to reconsider a court’s decision to grant a Franks hearing in the case of United States v. Anton Peraire-Bueno, et al., in the Southern District of New York. The government also requested the denial of the defendants’ motion to suppress evidence without a hearing. The case involves allegations of a cryptocurrency theft scheme.
The government’s filing, addressed to U.S. District Judge Jessica G. L. Clarke, argues that the court’s April 17, 2025, order granting a Franks hearing did not adhere to Second Circuit precedent. According to the government, the court must first determine whether probable cause for a search warrant persists after removing or amending challenged statements before ordering a hearing. The government contends that the court’s decision to defer this analysis until after the hearing deviates from established legal standards.
The defendants, in their response, argued that the court has discretion to order a Franks hearing. However, the government asserts that Second Circuit law requires a “substantial preliminary showing” of three elements: falsity in the warrant affidavit, intentional or reckless disregard for the truth by the affiant, and materiality of the false statements to the probable cause finding. The government cites cases such as *United States v. Sandalo* and *United States v. Levasseur* to support its position that materiality must be assessed first to avoid unnecessary judicial resource expenditure.
The government’s motion emphasizes that the unchallenged allegations in the affidavit provide sufficient probable cause to search the defendants’ Google accounts. These allegations include reports from multiple sources, including a victim, a software company representative, and public reporting, detailing a computer exploit on April 2, 2023, resulting in a $25 million cryptocurrency theft. Approximately $20.5 million of the proceeds were allegedly transferred to bank accounts linked to the defendants’ Google accounts, which were also used to communicate with the bank about the funds.
Additional unchallenged claims in the affidavit describe the defendants’ efforts to conceal their actions before and after the exploit. These efforts involved using private cryptocurrency addresses, foreign exchanges, and shell companies to obscure the source of the funds. The government argues that these facts, viewed collectively, establish a “fair probability” that evidence of a crime would be found in the Google accounts, satisfying the probable cause standard outlined in cases like *United States v. Raymonda*.
The government disputes the defendants’ claim that the affidavit’s statements were false or misleading, particularly regarding the term “hackers” and the description of transaction “altering.” The defendants argue that their actions involved “re-ordering” transactions, but the government maintains that the affidavit accurately describes a scheme involving the removal and replacement of transactions, exploiting a coding vulnerability to gain unauthorized access to trading data.
The government further contends that there is no evidence that the case agent intentionally or recklessly misled the magistrate judge who issued the warrant. Differences between the affidavit and the indictment, the government explains, reflect the natural evolution of an investigation, not bad faith. The government also notes that the defendants’ reliance on out-of-circuit cases, such as *United States v. Clark* and *United States v. Herrera*, is misplaced, as these do not align with Second Circuit precedent.
In conclusion, the government requests that the court reconsider its April 17, 2025, order and deny the defendants’ motion to suppress without a Franks hearing, asserting that the affidavit’s uncontested facts sufficiently establish probable cause.
Please contact BlockTribune for access to a copy of this filing.
