(Bloomberg) -- The US Justice Department’s bankruptcy unit has picked a former federal prosecutor who led the government’s case against the Unabomber to conduct a new outside investigation of FTX and its bankruptcy law firm.

Robert J. Cleary has been picked as an examiner to lead the inquiry by the Office of the US Trustee, an arm of the Justice Department that monitors corporate bankruptcies. Cleary is being asked to review potential conflicts of interest involving FTX’s bankruptcy law firm Sullivan & Cromwell, according to a Tuesday court filing.

He is also being asked to look at past investigations by FTX’s new management team, its creditors and government regulators, and to scrutinize if additional employees of Sam Bankman-Fried’s failed crypto exchange were involved in fraudulent activity before its collapse in November 2022. Lastly, the US Trustee wants Cleary to review any investigations conducted around FTX’s use of its native token, FTT, to inflate its value, and if further inquiries are needed.

Representatives for both FTX and Sullivan & Cromwell declined to comment.

Cleary’s appointment and inquiry must be approved by Judge John Dorsey, who has previously said the investigation should be short and limited in scope so as to not disrupt FTX’s ongoing Chapter 11 case. In Tuesday’s filing, the US Trustee said the cost of the proposed investigation will be capped at $1.6 million and could be wrapped in about 60 days. The results of the examination will be made public. 

Cleary has previously served as the US Attorney for both the District of New Jersey and the Southern District of Illinois. While in federal law enforcement, he was appointed lead prosecutor in the case against the notorious killer known as the Unabomber, Ted Kaczynski, according to his current law firm Patterson Belknap Webb & Tyler. 

Cleary has picked up white-collar criminal defense work since leaving government service to go into private practice. He also previously led the Southern District of New York’s major crimes unit, according to court documents.

The US Trustee’s pick to lead the inquiry was disclosed days after FTX investors accused Sullivan & Cromwell in a civil lawsuit of having “actively participated” in fraud that led to the company’s downfall. Sullivan & Cromwell has denied wrongdoing and previously said it had a “limited and largely transactional relationship with FTX” before the firm filed bankruptcy.

The case is FTX Trading Ltd., 22-11068, U.S. Bankruptcy Court for the District of Delaware.

--With assistance from Steven Church and Justin Wise.

©2024 Bloomberg L.P.