Sam Bankman-Fried's Legal Defense Is Being Funded With Alameda Money He Gifted His Father (forbes.com) 60
While still CEO of now-collapsed FTX, Sam Bankman-Fried transferred millions of dollars to his father. Some of those funds have since been used to pay for his mounting legal fees, Forbes os reporting, citing two sources close to the company. From a report: Sam Bankman-Fried, founder of fallen cryptocurrency exchange FTX who claimed to have just $100,000 in his bank account last November, is preparing for trial in October backed by a roster of powerful attorneys. But it has remained unclear, until now, how the former billionaire would afford his pricey defense. Forbes has learned that Bankman-Fried has been paying legal fees from a multi-million dollar gift he gave his father with money borrowed from FTX's sister company. In 2021, while CEO of FTX, Bankman-Fried made a large monetary gift to his father, Stanford Law professor Joseph Bankman, two sources with operational knowledge of both companies told Forbes. It was funded by a loan from the exchange's trading firm, Alameda Research, they said.
Bankman-Fried -- who has pleaded not guilty to 12 criminal charges including wire fraud, money laundering and securities fraud, and faces an additional bribery charge -- is accused of misappropriating FTX customer funds through Alameda dating back to the exchange's founding in 2019. A source close to Bankman-Fried told Forbes that his defense costs are likely in the single-digit-millions range. "I didn't steal funds, and I certainly didn't stash billions away," he wrote on Substack earlier this year. Two additional sources familiar with the family told Forbes that Bankman once begged his son to put away savings, but Bankman-Fried reportedly declined.
Bankman-Fried -- who has pleaded not guilty to 12 criminal charges including wire fraud, money laundering and securities fraud, and faces an additional bribery charge -- is accused of misappropriating FTX customer funds through Alameda dating back to the exchange's founding in 2019. A source close to Bankman-Fried told Forbes that his defense costs are likely in the single-digit-millions range. "I didn't steal funds, and I certainly didn't stash billions away," he wrote on Substack earlier this year. Two additional sources familiar with the family told Forbes that Bankman once begged his son to put away savings, but Bankman-Fried reportedly declined.
Meaningless (Score:2)
Yeah let's make sure his dad's lawyer buddies get a piece of the action too.
Re:Meaningless (Score:5, Insightful)
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Might even lead to another embezzlement and/or bankruptcy fraud charge.
And it tells me he really has no inkling that what he was doing is wrong. I'd slap him with a lifetime ban on executive positions. On top of everything else.
Re: Meaningless (Score:1)
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Yes but you can hardly blame him, for having a backup fund for legal expenses. That one of the things majorly wrong with the system you need money to get justice. Why should being rich get you more of a defense than being poor or even middle class. It simply is not fair.
Re:Meaningless (Score:5, Insightful)
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Re:Meaningless (Score:5, Informative)
No, that's not true. From what I've seen of the US justice system, 'no money' will get you a public defender whose goal it is to get you out the door quickly because he's overloaded as it is, so regardless of the facts of the case he'll do a plea bargain and you're screwed.
Money gets you a defence council that's willing to go to trial.
Re:Meaningless (Score:5, Informative)
Yes but you can hardly blame him, for having a backup fund for legal expenses.
Well, hiding ill-gotten gains in preparation for a legal defense, doesn't exactly back up a "not guilty" stance.
To your point about being unfair, claw the damn money back. Rather obvious where it came from. Let him fend for himself like the other 99.999% of 31-year olds would have to do. Investors might actually see justice instead of watching someone pay their way out of a crime.
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Go back to the authoritarian dictatorship you came from.
Re:Meaningless (Score:4, Insightful)
I'm not sure how taking back stolen money from someone is the domain of "authoritarian dictatorships". Consider this situation, for example. Someone is accused of an armed bank robbery where they allegedly made off with $5 million. They are put on trial and hire some very expensive lawyers, using up $5 million on their defense. Should that be allowed? On the one hand, they're innocent until proven guilty and so, in theory, the money they are paying with is only allegedly stolen until it has been proven in court. On the other hand, if it is allowed, then you are just letting them keep and spend the stolen money. The problem with confiscating the funds of course is civil forfeiture is so badly abused in the US that it should not be allowed at all. Of course, in between taking the money to spend on Christmas bonuses for the boys down at the station and letting bank robbers keep the money are a number of options where the funds are frozen or confiscated as evidence until the matter is resolved in court. It's not ideal for someone who is innocent and just happens to have a big pile of perfectly legal, but unexplained cash but, if the decision is made by a judge, following sane rules and due process of law, that's about the best compromise you can get.
When it comes down to it, giving millions of dollars to his dad from a loan from a business entity that he controlled, but did not personally own, against the stated policies of the organization, is a form of self-dealing that is clearly improper and illegal. A judge does not need to apply a standard of conviction beyond a reasonable doubt to prevent someone from spending money acquired in that way.
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You can prevent bank robbers from using the $5 million in their possession that they never could have obtained otherwise by seizing it as evidence. That is not preventing the accused from being able to obtain lawyers from their own assets. But today's situation is an attempt or argument to seize people's money, that are not accused of conspiracy in the crime, because...? There is no excuse to seize gift money. The feds can temporarily seize the alleged destination of the money accounts, and the feds can
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You can prevent bank robbers from using the $5 million in their possession that they never could have obtained otherwise by seizing it as evidence.
I know, that's why I wrote: ", in between taking the money to spend on Christmas bonuses for the boys down at the station and letting bank robbers keep the money are a number of options where the funds are frozen or confiscated as evidence until the matter is resolved in court." That would be part of due process, which you originally seemed to be objecting to as authoritarian dictatorship. Maybe you read too much into the term "claw the money back".
But today's situation is an attempt or argument to seize people's money, that are not accused of conspiracy in the crime, because...? There is no excuse to seize gift money.
Depends on where the money came from. Going back to the afo
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Go back to the authoritarian dictatorship you came from.
Oh, I'm sorry is the need for justice in this particular case not aligning with your political feewings?
And we wonder why shady people wanting to do shady shit fuck off to countries that allow it.
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And it tells me he really has no inkling that what he was doing is wrong. I'd slap him with a lifetime ban on executive positions. On top of everything else.
The problem with banning executives from holding further executive positions when they mess up this badly is that most executives simply aren't qualified to do any other job. We can't expect the poor babies to do any actual work. And while middle management would likely fit them just fine, it wouldn't provide them enough money to be able to buy several of us normal, working class people a day. I mean, why even bother waking up for the piddling amount of money a non-executive would make?
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He's a member of America's ruling class and has probably been told (and shown) how exceptional he is for his whole life.
He'll be fine once he gets out, some wealthy friend of his Father's will give some "job" in a vast corporation he controls and we'll never hear from him again, unless he's a complete idiot.
Which he might be now I think about it.
Re: Meaningless (Score:2)
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It's not meaningless. It's money that could theoretically be clawed back
So what? In America, you're presumed innocent until proven guilty. Are you suggesting that people shouldn't be able to pay lawyers for their own legal defense against the US gov't?
Re: Meaningless (Score:2)
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Important pretty sure there are already rules that an accused criminal CANNOT use proceeds of the crime to pay for his expenses.
Nope. Innocent until proven guilty. Civil forfeiture, RICO prosecutions, and asset seizures were legal products that originated from the 1970's war on drugs.
Now that his defense lawyers know the situation, I assume they will need to be prepared to return the money to the victims later on.
Is that sarcasm?
indict Daddy for Conspiracy! (Score:5, Insightful)
Sure sounds like a plot to illegally convert funds for their personal use. You take at huge loan from a company whose books you are conspiring with your girlfriend to cook, try and break the chain by gifting a large sum to another family member, dad, and hope the credits dont find it and figure out how to claw it back when the company goes belly up!
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Yet we have these billionaires whose money is clearly a result of criminal activity wasting our tax money in court. If we would take their money we could use it for prosecution and put them in jail.
Re:indict Daddy for Conspiracy! (Score:4, Insightful)
US law is confusing. We passed very reasonable law that allowed us to seize assets from criminal activity even if we did not have a criminal. We did this because our prosecutors could not convict a suspect that has millions at their disposal.
Yet we have these billionaires whose money is clearly a result of criminal activity wasting our tax money in court. If we would take their money we could use it for prosecution and put them in jail.
Civil forfeiture comes to mind. The cops find you have a large amount of cash. They say "Obviously drug money" and take it.
But its your life savings and you were on your way to buy a car. Good luck ever seeing your money again.
I fail to see why SBF's 'windfall' of cash to pay his legal fees like this isn't treated to civil forfeiture as well.
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I fail to see why SBF's 'windfall' of cash to pay his legal fees like this isn't treated to civil forfeiture as well.
1) Innocent until proven guilty.
2) Perhaps you should realize that civil forfeiture is an illegitimate overreach by the federal (and state) governments.
3) The only money seized is money that is under the direct control of the accused. This nation and the court system becomes a madhouse when innocent people get their bank accounts seized because at one time, they had a financial transaction with the accused, who may actually be innocent of a felony crime.
As an aside, wouldn't it be cool if we could seize
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Hence my second point.
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I fail to see why SBF's 'windfall' of cash to pay his legal fees like this isn't treated to civil forfeiture as well.
1) Innocent until proven guilty.
2) Perhaps you should realize that civil forfeiture is an illegitimate overreach by the federal (and state) governments.
3) The only money seized is money that is under the direct control of the accused. This nation and the court system becomes a madhouse when innocent people get their bank accounts seized because at one time, they had a financial transaction with the accused, who may actually be innocent of a felony crime.
As an aside, wouldn't it be cool if we could seize all of PotUS Biden's financial assets if Hunter Biden gets charged for a financial felony?
2) but America is a free country, bastion of democracy! Thats just unpossible! Your the greatest country on Earth and I refuse to believe you could do anything wrong especially to your own citizens. Oh... wait...
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Theoretically yes, but for some reason that doesn't seem to apply in practice. Cops routinely seize money under civil asset forfeiture even when there's little evidence of a crime.
I agree - it absolutely is. But since it's already being used to consistently fuck over people who haven't even been accused of a crime, then we might as well use the overreach
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I am against civil forfeiture and feel that the government probably has the ability to freeze the accounts in this case (with sufficient proof) so the money isn't spent. They could dole out approved amounts as needed. However, I think one of your points is incorrect:
It is my understanding that one of the nasty things about civil forfeiture is that it isn't a question of whether the person is guilty but rather the money. Since money isn't a person with respect to Constitut
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It is my understanding that one of the nasty things about civil forfeiture is that it isn't a question of whether the person is guilty but rather the money. Since money isn't a person with respect to Constitutional rights, it can be considered guilty until proven innocent.
1) The money cannot be considered "guilty", because money is not a sentient entity.
2) Money is a form of property of a person, and it cannot be legitimately seized by the gov't without due process.
3) The Supreme Court also upheld that negroes were the property of slaveholders, and later that "separate but equal is equal". Fuck the Supreme Court when its members chose to deviate from their sworn duty.
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I was scanning a Japanese travel magazine the other day, and it had an article about civil forfeiture in the US. The advice was not to take too much money with you if you travelled there.
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I was scanning a Japanese travel magazine the other day, and it had an article about civil forfeiture in the US. The advice was not to take too much money with you if you travelled there.
I can just imagine "America is such a poor country, even the police will rob you, just like in other 3rd world countries".
Might as well include the Democratic Party as well (Score:2)
They are all guilty by association.
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I thought I read something suggestion that there were violations of the RICO Act. Maybe they can bring daddy into the list of conspirators and seize the money or demand a performance bond.
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I hope the government DOESN'T try to claw back that money, I was relying upon trickle down economics to make me rich!
That's a spanking (Score:3)
Bankruptcy court is going to bend them both over and get that money back.
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Bankruptcy court is going to bend them both over and get that money back.
Not necessarily. If the gifts (to the father, others) were performed before any fraud started it would likely not be clawed back. While it certainly appears that FTX had engaged in long term questionable actions, the date for when things could be proved to be fraudulent will become important for claw backs.
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Bankruptcy court is going to bend them both over and get that money back.
Not necessarily. If the gifts (to the father, others) were performed before any fraud started it would likely not be clawed back. While it certainly appears that FTX had engaged in long term questionable actions, the date for when things could be proved to be fraudulent will become important for claw backs.
I suppose it depends on the legality of the loans. Secretly borrowing millions from the company and gifting it to a family member has the smell of fraud or embezzlement to me, but I suppose that's a question for the court to figure out.
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The bankruptcy court has known about this since Day 1, that's why the source of SBF's legal funding is under seal.
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How does that work?
In the UK sometimes people choose not bother suing someone, because they think that person will spend all their money defending themselves and at the end of it had nothing left to pay whatever damages are decided. Can't claw the money back from the lawyers who represented them.
Can they get money back from the lawyers in the US? I have a feeling that if they can't, whatever assets are left after bankruptcy won't be enough to cover the debt, and even if they did this would be pretty far dow
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I've heard of it happening.
If the lawyer KNEW he was being paid with profits of a crime, he can be forced to give the money to the government.
First You Get the Money Then You Get the Power (Score:2)
This is looking like it was a (Score:3)
Maybe mom and dad were truly unaware of what their kid was doing. MMMAAAyyyyybbbeee. But with millions of investor dollars in mom and dad's name, I'm pretty skeptical.
This is gonna be entertaining for the next several years.
Crime pays after all? (Score:3)
This is SBF in nutshell (Score:1)
Humblest of billionaires kept his promise!!!11 (Score:3)
He promised to give his billions of super duper honestly earned money away - just did not specify to whom!
Keeping your filthy greedy money AND technically keeping your rockstar-philanthropist ego-circlejerk, win-win!
This case does not stop to amaze me (Score:2)
And it defeats every attempt for me to try and find them an excuse. I thought "maybe these are just naive kids who never thought they were committing fraud" then we learn they bribed Chinese officials. I also thought "their parents must have felt so ashamed when they learned what the kids had been doing" then we learn the parents also got a few millions off it.
quacks like a duck (Score:2)
time to slow roast and make peking duck.
And his dad's okay with this? (Score:2)
Wait - "gifted"? I could have sworn it said "grifted"...