Jane Street Boss Says He Was Duped Into Funding AK-47s for Coup

(Bloomberg) — The indictment reads like a cinematic plot: A Harvard Fellow and another activist allegedly wanted to buy AK-47s, Stinger missiles and grenades to topple South Sudan’s government. What they lacked was enough cash.

Now, Jane Street co-founder Robert Granieri concedes he put up the money — saying he was duped into funding the alleged coup plot. The admission from the wealthy recluse behind a Wall Street trading powerhouse stems from the US prosecution of Peter Ajak, the Harvard Fellow who was accused last year of scheming to install himself atop the East African nation. 

“Granieri is a longtime supporter of human rights causes,” his lawyer said in a statement. “In this case, the person Rob thought was a human rights activist defrauded Rob and lied about his intentions.”

The case came to light in March 2024, when federal prosecutors in Arizona charged Ajak and Abraham Keech with conspiring to illegally export arms to their home country. Both have pleaded not guilty. 

While prosecutors haven’t said where the defendants obtained several million dollars for an attempt to buy military-grade weaponry, Ajak’s lawyers pointed to Granieri in a recent filing — saying the 53-year-old financier was “vital to the plan.”

“Without the significant financing that Mr. Granieri could and agreed to provide, the alleged conspiracy would have been impossible,” they wrote in the document filed in late May.

The lawyers accused authorities of selectively prosecuting two Black men, even though support also came from Granieri and Garry Kasparov, the chess champion and prominent Russian dissident. The US hasn’t accused either of them of wrongdoing.

Kasparov came to know Ajak when the chessmaster was chair of the Human Rights Foundation. He later connected Ajak with Granieri, according to people familiar with the situation, who asked not to be identified discussing the legal case.

“My record and my values are clear, and they remain unchanged,” Kasparov said in a statement sent by a spokesperson, in response to questions about the case. “I have spent much of my life standing up for civil rights and promoting democracy around the world.”

To industry outsiders, Jane Street is probably best known as the former employer of Sam Bankman-Fried, before he left to build a crypto empire that imploded.

But across Wall Street, the market-making firm is a source of fascination — known for turning mathematicians into traders who mint profits. It generated $20.5 billion in net trading revenue last year, helping it leap past the likes of Bank of America Corp. and Citigroup Inc.

Despite Jane Street’s ascent in the industry, Granieri has kept a low profile. He’s one of the firm’s four founders — and the only one still there. Yet he’s not featured on the company’s website, and public photos of him are scarce.

The firm’s success has allowed Granieri to pour money into other ventures and causes. He helped build the Scarlet Pearl, a casino resort on the Gulf Coast in Mississippi, was a major financial backer for Republican presidential candidate Nikki Haley, and has donated to the Equal Justice Initiative and Institute for Justice.

He also channeled money into causes Kasparov backed around the globe.

South Sudan — slightly larger than France — became the world’s youngest country after seceding from Sudan in 2011 following more than 20 years of civil war.

The bloody regional conflict displaced millions of people, drew attention from human rights activists and gained mainstream awareness after actor George Clooney championed intervention in the early 2000s. Despite emerging as an independent nation, stability still eludes its people.

Ajak aimed to change that.

After escaping life as a child soldier in Sudan in the 1990s, he resettled in the US as one of the “Lost Boys.” He went on to study at the Harvard Kennedy School before returning to Sudan as a World Bank economist. After South Sudan’s independence, Ajak became a prominent opposition activist and political prisoner there, later seeking asylum in the US. 

One sticking point in the court case is how much, if anything, US authorities knew about Ajak and Keech’s alleged plan to topple South Sudan’s government. 

Attorneys for both men have signaled in court that they plan to pursue a “public authority” defense, essentially claiming that US officials had supported their plan. Prosecutors said Ajak was told by the State Department in October 2023 that it wouldn’t fund plans for non-democratic regime change.

Ajak and Keech are accused of forging ahead regardless. For that, they needed financial backing.

The financing took shape early last year amid a flurry of meetings. Some were at the law firm Paul Hastings, where Ajak’s former pro bono attorney, Renata Parras, worked, according to the May filing. Another attendee was public-relations specialist Michael Holtzman, who previously advised the State Department, that filing says. Prosecutors haven’t accused Parras or Holtzman of wrongdoing.

“Based on the government’s indictment of Peter, it would seem he lied to me and others about his intentions from the outset,” Holtzman said in a statement. Parras didn’t respond to a request for comment.

The search for cash culminated at a Midtown Manhattan condominium building that February, according to prosecutors. That’s where Granieri first met Ajak, people with knowledge of the matter said. The next day, charging documents allege, Ajak sent an encrypted message to an undercover agent, writing: “We are getting the funding.”

The financier later transferred $7 million in two stages, according to people with knowledge of the payments.

Within a few weeks of the condo meeting, prosecutors say Ajak and Keech inspected a cache of weaponry inside a Phoenix warehouse. They were soon arrested.

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