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Sam Bankman-Fried sentenced to 25 years in federal prison for his FTX frauds

By Douglas Berman

As reported in this Wall Street Journal piece, “FTX founder Sam Bankman-Fried was sentenced Thursday to 25 years in prison for fraud tied to the collapse of his digital exchange, capping his meteoric rise and fall.” Here is more:

Less than two years ago, Bankman-Fried was the crypto king. The moptop millennial hobnobbed with heads of state, soaked up Caribbean views from his $30 million penthouse and vowed to use his wealth to better humanity.

Last year, a jury found the 32-year-old guilty of stealing billions of dollars from FTX customers and defrauding investors and lenders to his crypto investment firm Alameda Research.

Bankman-Fried, standing with his hands clasped, told the judge before sentencing Thursday that he was haunted every day by what he had thrown away. “I was responsible for FTX, and its collapse is on me,” he said during a 20-minute statement. A lot of people were let down, he said, adding, “I’m sorry about that.”

Federal prosecutors said Bankman-Fried committed one of the greatest financial frauds in U.S. history. Fueled by greed and hubris, he used other people’s money to fund his lavish lifestyle, make risky investments and pursue his political agenda, according to prosecutors. Prosecutors asked U.S. District Judge Lewis Kaplan to sentence Bankman-Fried to 40 to 50 years in prison. Without a lengthy sentence, Bankman-Fried could commit more crimes, Assistant U.S. Attorney Nicolas Roos told the court. “If Mr. Bankman-Fried thought that mathematics would justify it, he would do it again,” Roos said.

Bankman-Fried’s lawyers argued a sentence of no more than six years in prison was more appropriate, saying he still had much to offer to society. They pointed to his autism, his deep remorse and his charitable works as reasons for a lenient sentence. Marc Mukasey, his lawyer, told the judge that Bankman-Fried wasn’t a “ruthless financial serial killer” who sought to hurt people. “Sam Bankman-Fried does not make decisions with malice in his heart,” said Mukasey. “He makes decisions with math in his head.”…

During a monthlong trial in the fall, jurors heard testimony from three of Bankman-Fried’s top lieutenants, including his ex-girlfriend, who said the FTX founder directed them to commit crimes alongside him. Bankman-Fried took the unusual step of testifying in his own defense. He told jurors that he never committed fraud, yet he struggled under cross examination, saying dozens of times that he didn’t recall specifics.

Kaplan said Thursday that Bankman-Fried committed perjury during his testimony, including when he told jurors that until fall 2022, he had no knowledge that Alameda had spent FTX customer deposits.

In the weeks before the sentencing, Bankman-Fried’s supporters wrote letters to the judge, saying that his struggles with depression, autism and anhedonia — the inability to feel happiness — weigh in favor of a lighter sentence….

Kaplan said Thursday that in determining the sentence, he wasn’t weighing whether customers would get their money back. “A thief who takes his loot to Las Vegas and successfully bets the stolen money is not entitled to a discount on the sentence,” the judge said.

Prior related posts (in some of which I set the over/under at 25 years):