U.S. prosecutors recently requested a prison sentence ranging from 40 to 50 years and an $11 billion fine for Sam Bankman-Fried, the former CEO of FTX. This follows his trial, during which he was found guilty on 7 counts, including wire fraud, securities fraud and money laundering. SBF, the new Madoff?
Sam Bankman-Fried set to rot in jail?
Four months after Sam Bankman-Fried’s revelatory trial, U.S. prosecutors have asked Judge Kaplan to imprison the former FTX CEO for 40 to 50 years and fine him $11 billion.
A “particularly conservative sum” according to prosecutors, who point out that $1 billion has already been seized in the Bankman-Fried case.
Money to be recovered here and there, as the ex-CEO of FTX has invested in luxury apartments and businesses, but also because he has contributed significantly to the financing of numerous political campaigns, notably during the most recent American presidential elections.
“The largest campaign finance offense ever” according to prosecutors, since we’re talking about over $100 million paid to 300 politicians and political action groups.
The prosecutors’ case, which runs to more than a hundred pages, insists that Sam Bankman-Fried acted in defiance of the law on his own initiative, as his former colleagues confirmed during last November’s trial.
“At every stage of his cases, and with respect to every crime committed, the defendant demonstrated a brazen disregard for the rule of law. […] He understood the rules, but decided they didn’t apply to him.”
Extract from the document filed by the prosecutors
Before its sudden collapse, FTX was valued at $32 billion. The cryptocurrency exchange, then the 2nd largest in the world behind Binance, was in fact based entirely on FTT, its own token. At the time of its bankruptcy, the exchange had a shortfall of around $11 billion made up of deposits from its customers, who are waiting to recover their tied-up funds.
Former FTX CEO, the new Bernard Madoff
In their court filing, prosecutors were quick to compare Sam Bankman-Fried’s fraud to that of Bernard Madoff, known for having embezzled $65 billion through a monumental Ponzi scheme, which cost him a 150-year prison sentence, as well as the title of greatest swindler in the history of finance.
Here, as in the Madoff case and many others, the defendant misappropriated his victims’ funds and invested large amounts of that money in assets such as real estate, shares in publicly traded companies and other more illiquid assets for his own benefit.”
Extract from the document filed by the prosecutors
Sam Bankman-Fried is currently being held at Brooklyn’s Metropolitan Detention Center, known for its particularly harsh conditions
First photo of Sam Bankman-Fried in jail at MDC Brooklyn (December 17, 2023) pic.twitter.com/QlENjjmeQG
– Tiffany Fong (@TiffanyFong_) February 20, 2024
Sam Bankman-Fried was found guilty on 7 counts at his trial, including wire fraud, securities fraud, commodities fraud and money laundering. He pleaded not guilty, and his defense proposed a sentence of 6 and a half years in prison, a far cry from the 50 years proposed here by prosecutors.
Note that these are only the prosecutors’ recommendations, and that the final decision rests entirely with Judge Lewis Kaplan, who was in charge of Donald Trump’s trial earlier this year. He will have to pronounce Sam Bankman-Fried’s final sentence by the March 28 deadline.
