The day of reckoning finally came for Sam-Bankman-Fried.
Judge Lewis A. Kaplan of the Southern District of New York court sentenced him to 300 months (25 years!)
“A man willing to flip a coin as to the continued existence of life on earth. Mr. Bankman-Fried knew that Alameda was spending customer funds on risky investments, political contributions and Bahamas real estate. The funds were not his to use.”
The billionaire crypto-bro SBF, second Democrat donor after only George Soros, came crashing down from glory to infamy after his crypto trading platform FTX went bankrupt in what prosecutors described as ‘one of the biggest financial frauds in American history’.
Jurors in his trial only needed three hours of deliberations to find Bankman-Fried guilty of all seven criminal counts.
SBF’s defense has proposed a prison term between five and six and a half years, because he is a vegan, good-natured do-gooder.
Prosecutors were not kidding around, seeking 40 to 50 years in prison, a sentence they say is warranted for someone who lied to investors and banks, and stole billions in deposits from customers.
Coming into sentencing things didn’t look good for SBF because tough-as-nails Judge Lewis A. Kaplan had already remanded him to prison pending trial for witness tampering.
The great Inner City Press live-tweeted from SDNY court, here you have some selected bits:
Judge Kaplan started out did not accept the defense claim that, because there is a plan by the FTX bankruptcy estate to pay costumers and creditors, that ‘there was no loss’ to them, a fact that defense thinks should lower his sentence.
“Judge Kaplan: I find the loss amount readily exceeds $550 million, the top tier [for sentencing]. I find investors lost $1.7 billion, lenders lost $1.3 billion, and customers, $8 billion.”
Then, there was the question of the obstruction of justice.
Judge Kaplan: “On obstruction of justice, I find that Mr. Bankman-Fried’s text to the former general counsel did in fact constitute attempted witness tampering. I make 3 perjury findings based on trial testimony
* he falsely testified that until the Fall of 2022 he had no knowledge that Alameda had spent FTX customer funds.
* He falsely testified that he first learned of the $8 billion in Oct 2022
* He falsely testified that repayment of third party loans by Alameda would require Alameda to borrow more customer funds from FTX.
The total offense level is 60 – once you cross 43, it cannot go higher. The guideline is life in prison. But the maximum is 1320 months in this case (151 years!)”
Victim Sunil Kavuri spoke in court:
“At least three people have committed suicide because of this FTX fraud. So when this FTX bankrutcy… I guess… What I feel, how it relates to Sam, it has hurt me, other co-conspirators, aiders and abetters, need to be held accountable”
Bankman-Fried’s defense came with the same old line of argument, and talked about his mom a lot: it was painful to read.
Mark Mukasey: “His mom says he is misunderstood. It is easy to slot people into an old fashioned story of the greedy swindler… Sam never scurried away with money. He stayed to the end. He’ll tell you more how much it means to him that people get repaid.”
SBF seemed at first that he’d drop the ‘smarter-than-thou’ attitude and show some contrition for the judge:
SBF: “I appreciate what Mark said about me. I don’t know that the most important thing today is my emotion life or hypothetical future kids.”
But no, he chose to ramble on and relitigate the whole case. Didn’t help himself.
SBF: “I made a lot of mistakes. But that’s not how the story ended. Customers weren’t paid back. FTX didn’t survive that. Yeah, customers have been given conflicting claims. That’s caused a lot of damage. They could have been paid back…”
SBF: “I can’t impact if I get 5 years or 40 years. I know how the prosecutors see me, the court, the media. I understand it. You referenced my test to the general counsel. I was trying to help – that’s not how the prosecutors saw it, the media, that’s that.”
The prosecution also had a say:
AUSA Nicolas Roos: “Samuel Bankman-Fried stole $8 billion dollars. It was theft, from customers spread all over the world. It was a loss that impacted people significantly and caused damage. I want to address a few of the new victim letters.”
Roos talked about many costumers’ letters whose lives were horribly impacted by FTX’s mishandling of their life savings.
“The defendant took $1.7 billion from investors – that alone necessitates a long sentence. Some get 40 or more years for that alone. There were also the loans, two lenders went bankrupt. That too justified, on its own, a severe sentence. Also one of the largest bribes. He committer perjury. It was pervasive.”
He would do it again: no acceptance of responsibility, the AUSA
“He did not swear off doing it again. He said there is an opportunity to relaunch FTX or an equivalent. That, I submit, tells the court exactly what could happen. A sentence is necessary here of at least 40 years so he will not do it again”
“The defendant is not a monster, but he committed gravely serious crimes that harmed many people – and he would consider doing it again. So, 40 to 50 years.”
The Judge talked about SBF’s background. “He said there was a five percent chance he’d be president one day. Indeed, this was a huge financial crime. He wanted to be a hugely politically influential person in his country. It wasn’t just the left end of the spectrum.”
He put up a fake stance on regulations, the Judge reminded us. He wanted power. Influence…
JK: “A man willing to flip a coin as to the continued existence of life on earth. Mr. Bankman-Fried knew that Alameda was spending customer funds on risky investments, political contributions and Bahamas real estate. The funds were not his to use. One of his pithier expression, I think, was “I f*cked up.” Mr. Bankman-Fried has the right to plead not guilty & go to trial. Everybody’s got that right and I don’t hold it against him. But I come back to Ms. Ellison’s testimony. He knew it was wrong. He’s not going to admit a thing. As is his right. Specific deterrence? His name is mud around the world. But he’s persistent and he’s a great marketing guy. Mr. Roos is right that the outlines of Sam Bankman-Fried’s revised version are clear.”
“On general deterrence, at the end of the day the criminal justice system thrives only if it’s seen as fair. People need to feel, It’s fair. Or we’re back to trial by combat, folks, or something like it. So punishment must fit the seriousness of the crime. And these. Were. Serious. Crimes. I know the Probation Department recommends 105 years, and the Government 40 to 50 years. That would be more than necessary.”
“I am not diminishing the harm. The brazenness of his actions. His exceptional flexibility with the truth. His apparent lack of any remorse. I want to add one further thought. I did not think it a fruitful use of time to spell out every lie – When not lying, he was evasive, hair splitting, trying to get the prosecutors to rephrase questions for him. I’ve been doing this job for close for 30 years. I’ve never seen a performance like that.”
“It is the judgment of the court that you are sentenced to 240 months then consecutive 60 [etc] for a total of 300 months [25 years].”
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