US Gov’t Suggests Up To 50-Year Sentence For Sam Bankman-Fried

As the sentencing date for Sam Bankman-Fried approaches, the government has submitted a memorandum outlining the extensive nature of his crimes and advocating for a substantial prison term.

Bankman-Fried, convicted of orchestrating one of the largest financial frauds in history, is scheduled for sentencing on March 28, 2024.

The memorandum, responding to Bankman-Fried’s own submission dated February 27, 2024, highlights the unprecedented scale and scope of the fraud perpetrated at FTX. Prosecutors emphasize that the enormity of the fraud is not only measured by the staggering amount of money involved—over $8 billion of customer funds misappropriated—but also by the extensive harm inflicted on tens of thousands of individuals and entities across multiple continents.

“Although it is unlikely (but not impossible) that the defendant will work in finance again, and will likely forfeit all of his ill-gotten gains, justice requires that he receive a prison sentence commensurate with the extraordinary dimensions of his crimes,” the government’s memorandum said. “For these reasons, the legitimate purposes of punishment require a sentence of 40 to 50 years’ imprisonment.”

According to the government, Bankman-Fried engaged in a litany of illegal and unethical acts, including stealing money from customers, deceiving investors, providing fabricated documents to lenders, making illegal political donations, and bribing foreign officials.

In a legal document, the government identified that there were 205 political contributions made by Bankman-Fried himself spanning from local committees to high-profile national campaigns, which are linked to his securities fraud judgment. Among the beneficiaries are prominent figures and organizations, including state Democratic parties, congressional campaigns, and political action committees (PACs). Notably, contributions made to candidates like Beto O’Rourke, Cory Booker, Mitt Romney, and Kirsten Gillibrand are also part of the extensive list.

In addition, the list also indicated 261 political contributions made by Ryan Salame and 100 contributions made by Nishad Singh listed in the document.

Prosecutors argue that the gravity and breadth of these crimes warrant a significant prison sentence, asserting that each offense alone justifies a lengthy term of incarceration.

Furthermore, the memorandum underscores Bankman-Fried’s refusal to accept responsibility for his actions, despite the overwhelming evidence against him. Prosecutors contend that his conduct, characterized by greed, hubris, and a blatant disregard for the law, merits a severe punishment to serve the interests of justice and deter others from similar crimes.

While acknowledging Bankman-Fried’s age relative to other offenders convicted of similar crimes, prosecutors argue against a life sentence.

The government’s sentencing recommendation relies on the calculation of the adjusted offense level, which factors in various aggravating circumstances, including the substantial financial hardship inflicted on numerous victims, sophisticated money laundering techniques, obstruction of justice, and abuse of trust.

“The Government agrees with the Probation Department’s conclusion that the total offense level is 43. The Government, however, submits that the adjusted offense level subtotal is 60, not 56: six levels should be added… because the offense resulted in substantial financial hardship to 25 or more victims,” the government explained.

In illustrating this, the government revealed a series of Twitter messages sent to Bankman-Fried around the time that FTX was facing the implosion, depicting a distressing narrative of customers unable to withdraw their funds from the platform.

One user, identified only by their Twitter handle, recounts their experience of having their entire life savings locked in FTX, pleading with Bankman-Fried to enable withdrawals. Another user, a single mother, expresses desperation, stating that she cannot endure the loss of her savings, especially with a child to support.

“Please give me back my $20,000. I have a new baby now 4 months old and all my money was there,” she wrote.

The messages also reveal the dire consequences faced by some users, including impending homelessness, inability to pay bills, and loss of future opportunities. One message even suggests that the situation has driven an individual to contemplate drastic measures due to the financial ruin caused by the FTX debacle.

“My son and I are ruined. Why did you do chapter 11 so quickly – $15K US is a lot of money for us as a single parent,” one customer said.

In addition to the recommended prison term, the government seeks a substantial money judgment of over $11 billion and the forfeiture of Bankman-Fried’s interests in specific properties identified in the preliminary order of forfeiture.

“At bottom, defendants who are in a position of trust and steal $100 million or more appropriately are sentenced to 40 to 50 years, or more. Such a sentence is necessary here and would be in line with the sentences meted out to other defendants who engaged in similar conduct,” the government asserted.

Information for this briefing was found via the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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