By Luc Cohen
NEW YORK (Reuters) – Sam Bankman-Fried’s lawyer urged a decide on Tuesday to impose a lenient sentence for the FTX founder’s conviction for stealing $8 billion from clients of the now-bankrupt cryptocurrency trade, arguing shoppers would get most of their funds again.
In a sentencing submission, Bankman-Fried’s lawyer Marc Mukasey informed U.S. District Choose Lewis Kaplan {that a} tips vary between 5-1/4 and 6-1/2 years can be an applicable jail time period.
That’s far lower than the utmost sentence of 110 years he faces after a jury discovered him responsible in November on seven counts of fraud and conspiracy, in what prosecutors have known as one of many largest monetary frauds in American historical past.
Bankman-Fried pleaded not responsible and is predicted to attraction his conviction and sentence. He acknowledged making errors operating FTX, however testified at trial that he by no means meant to steal buyer funds.
Kaplan is ready to condemn the previous billionaire, who turns 32 subsequent week, on March 28.
The lawyer’s submission was accompanied by letters of assist from Bankman-Fried’s mother and father, psychiatrist, and others.
His mother and father, the Stanford regulation professors Joseph Bankman and Barbara Fried, stated their son was tired of materials wealth and labored laborious to make clients entire within the month between Bahamas-based FTX’s November 2022 collapse and his arrest on fraud costs a month later.
“Barbara and I…witnessed firsthand his single-minded deal with getting a refund to depositors, lengthy after there was any chance he would be capable to save any of his fairness or wealth,” Bankman wrote.
Mukasey known as a 100-year tips vary calculated by probation officers “barbaric”, saying it was primarily based partly on a defective assertion that FTX’s clients misplaced billions.
He pointed to the bankrupt firm’s latest assertion that it anticipated to repay all clients in full to again up the argument that Bankman-Fried didn’t got down to steal.
“The conviction doesn’t deal with whether or not Sam meant to pay the cash again. He did,” Mukasey wrote.
The probation officers’ calculation will not be binding on Kaplan. The U.S. Legal professional’s workplace in Manhattan is predicted to make its personal sentencing suggestion by March 15.
ELIZABETH HOLMES OR MICHAEL MILKEN?
A graduate of the Massachusetts Institute of Know-how, Bankman-Fried rode a increase within the values of digital belongings corresponding to bitcoin to a web price Forbes journal as soon as estimated at $26 billion. His fortune evaporated in November 2022, when FTX declared chapter after a wave of buyer withdrawals.
At his month-long trial in Manhattan federal court docket, three former shut associates testified that Bankman-Fried directed them to assist loot FTX buyer funds to plug losses at his Alameda Analysis hedge fund, even whereas presenting himself publicly as a accountable steward within the risky cryptocurrency market.
Prosecutors stated Bankman-Fried additionally used buyer funds to purchase luxurious actual property within the Bahamas and to donate to U.S. politicians who would possibly assist cryptocurrency-friendly rules.
Bankman-Fried testified that he didn’t understand how a lot Alameda owed to FTX till shortly earlier than each failed.
Mukasey acknowledged Bankman-Fried’s case bore some similarities to that of Elizabeth Holmes, one other younger entrepreneur who was sentenced to 11 years in jail in 2022 for defrauding traders in her now-defunct blood-testing startup Theranos.
However he stated Holmes put sufferers in danger, and recommended Bankman-Fried had extra in widespread with Michael Milken – a Wall Avenue financier within the Eighties often known as the “junk bond king” who was launched from jail after serving simply two years of an preliminary 10-year sentence on fraud costs.
“Given the identical probability, Sam would dedicate his post-prison life to charitable works,” Mukasey wrote.
MOTHER SAYS SHE WOULD CHANGE PLACES
Bankman-Fried has been jailed at Brooklyn’s Metropolitan Detention Heart since August, when Kaplan revoked his bail after discovering that he doubtless tampered with witnesses.
In a letter to Kaplan, Bankman-Fried’s psychiatrist George Lerner wrote that he’s on the autism spectrum. Mukasey wrote that Bankman-Fried struggles to make eye contact and talk with others, which may go away him susceptible in a jail setting.
Bankman-Fried’s mom wrote that her son had taken accountability for the errors that led to FTX’s collapse and was remorseful, however stated she feared for his life in jail.
“His father and I face the very actual chance that we’ll not stay lengthy sufficient to see him freed,” Fried wrote. “I might gladly change locations with him if I may.”
(Reporting by Luc Cohen in New York and Kanjyik Ghosh in Bengaluru; Modifying by Clarence Fernandez)
