Samourai Wallet: Rodriguez Deemed Flight Risk, Denied Freedom Of Movement

Judge Richard M. Berman has denied a defense motion to remove home detention as a condition of bail release for Keonne Rodriguez, who, with cofounder William Lonergan Hill, faces money laundering charges in connection with his creation of the Samourai Wallet software. Rodriguez’ defense also said it wanted to lift restrictions on Rodriguez’ ability to make cryptocurrency transactions, but Judge Berman ruled against all defense motions before those arguments were presented to the court.

Judge Berman and the parties also agreed on December 17 for the next pre-trial hearing. That hearing will include a defense motion for dismissal of the criminal charges against the Samourai developers, which the defense characterized as “extraordinarily unusual,” and a misapplication of money laundering statutes. The defense cited a bipartisan May letter from Senators Cynthia Lummis (R) and Ron Wyden (D) arguing that cryptocurrency anonymization services, including Samourai Wallet and the Tornado Cash protocol, are not money transmitters.

Rodriguez and Hill appeared together with their respective lawyers. Rodriguez was clean-cut, in a dark suit and open-collar dress shirt. Hill wore a grey denim jacket and tortoise-shell glasses, his white hair close-cropped above a salt-and-pepper goatee. The hearing coincided with proceedings in the prosecution of Sean “Puffy” Combs, and news crews hovered outside entrances and exits to the Southern District of New York building at 500 Pearl Street.

Home detention was imposed as a condition of bail before a magistrate judge following Rodriguez’ initial arrest. But the defense argued that Rodriguez had “no intention to flee” and had shown “a track record of compliance.” Defense cited that Rodriguez had not fled after detecting law enforcement attempted to access overseas Samourai-related servers in March of 2024; and had driven from his home in Pennsylvania to hearings in New York three times, without supervision. The project's canary, a tool to ensure users that data had not been accessed via law enforcement, was last updated on March 24th on the Samourai Wallet website.

The defense also argued that the restrictions were unnecessary because Rodriguez was willing to stand trial because he did not believe he had committed any crime. Among other initial arguments, the defense cited the fact that Samourai’s software had been available in the Apple and Google app stores for “close to a decade.”

Prosecutors, however, presented the court with handwritten documents, recovered from Rodriguez’ residence and attributed to him, that appeared to detail plans to leave the country undetected. The document did not specifically characterize the flight plans as a response to law enforcement, instead at one point referring to a possible mass power outage.

However, the document, which The Rage has not viewed directly, was described as containing elaborate and detailed plans to evade detection in the event of flight. This included a plan to “learn Spanish,” and a packing list including things like burner cell phones, $10,000 in cash, and passports – which DOJ prosecutors emphasized was “passports, plural,” implying the existence of several such travel documents. The document was also described as including plans to drive to the Florida Keys, stay in “cash motels,” and then travel through Cuba to Jamaica.

“As far as the government is concerned, this is a pretty good plan” for evading law enforcement, said prosecuting U.S. Attorney Andrew K. Chan. “It’s not something we see a lot.”

Prosecutors further argued that the severity of the charges against Rodriguez increased his risk of flight. Chan said that the charges carried a maximum sentence of 25 years, and that the government anticipated sentencing modifications that could lead to an even longer sentence.

It is unclear how much of Rodriguez’ planning, whatever its purpose, was enacted before his arrest. The government did not cite the existence of actual baggage containing burners, cash, or passports.

Nonetheless, Judge Berman said that the document “does support [the government’s] application to deny the removal of monitoring.” Berman then ruled against the bail modification motion and adjourned proceedings before defense lawyers could lay out their argument for lifting restrictions on Rodriguez’ use of cryptocurrency. While the hearing was cordial, this peremptory judgment reflected Berman’s seeming skepticism of several of the defense’s positions.

“My best advice is for everyone is to get moving on this case as fast as possible,” Judge Berman advised the parties. “I think that’s the best way to solve this [home detention] problem.”

To the Moon and Back

The hearing on Rodriguez’ bail conditions followed a status hearing on preliminary elements of the trial, particularly scheduling and the discovery process, in which documents and other evidence are shared with both legal teams.

Electronic devices recovered from Hill and Rodriguez will be a major source of discovery in the case. Prosecutors described seizing 44 electronic devices from Rodriguez, though only 15 have so far been successfully unlocked and their data “extracted.” 27 devices were seized from Hill, of which 25 have successfully had their data extracted.

The government has so far handed over two batches of discovery materials to the defense, including documents from electronic devices; social media posts; business records; law enforcement records; and materials obtained via Mutual Legal Assistance (MLA) agreements with foreign governments. Prosecutors said they might have a third and final batch of discovery to process and share, but that they would be ready to go to trial within 60 days.

Defense lawyers responded that scheduling a trial would be premature because of the huge volume of discovery materials to be processed and reviewed for their potential usefulness in mounting a defense. According to Rodriguez’ lawyer, the volume of discovery material was equivalent to “75% of the Library of Congress,” and that if printed out, the stacked paper would reach from Earth to the Moon and back – 22 times.

The government and defense lawyers settled on December 17 for the next hearing. The defense previewed the essence of their planned argument for dismissal:

"If you took all the [prosecution's claims] as true, they still wouldn't meet the bar for the charges."

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