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Written by Luc Cohen
NEW YORK (Reuters) – Attorneys for Sam Bankman Fried asked a judge on Tuesday to impose a lenient sentence on the FTX founder’s conviction for stealing $8 billion from customers of the bankrupt cryptocurrency exchange. and claimed that customers would get most of their funds back.
In a sentencing submission, Bankman Freed’s attorney Mark Mukasey told U.S. District Judge Lewis Kaplan that a prison term ranging from 5 1/4 years to 6 1/2 years would be appropriate. Ta.
That’s less than the maximum sentence of 110 years he faced after a jury convicted him in November on seven counts of fraud and conspiracy in what prosecutors called one of the largest financial frauds in U.S. history. Much lower.
Bankman Freed maintains his innocence and is expected to appeal the conviction and sentence. Although he acknowledged that FTX had been mismanaged, he never intended to steal customers’ funds, he testified at trial.
Kaplan is scheduled to sentence the former billionaire, who turns 32 next week, on March 28.
The attorney’s submission was accompanied by letters of support from Bankman-Fried’s parents, psychiatrist and others.
His parents are law professors at Stanford University. joseph bankman and barbara freedtheir son had no interest in material wealth and made a total of 10,000 of his customers a month after Bahamas-based FTX’s collapse in November 2022 until his arrest on fraud charges a month later. He said he worked hard for this.
“Barbara and I … witnessed his single-minded focus on getting money back to his depositors, long after he could have saved any of his stock or assets,” Bankman said. wrote.
Mukasey called the 100-year guideline range calculated by the probation officer “barbaric” and said it was based in part on false claims that FTX customers had lost billions of dollars.
He pointed to the bankrupt company’s recent claim that it plans to repay all customers in full to support its argument that Bankman Freed was not aiming to steal.
“The conviction does not mention whether Sam intended to repay the money. He did,” Mukasey wrote.
The probation officer’s calculations are not binding on Kaplan. The federal prosecutor’s office in Manhattan is expected to make its own sentencing recommendation by March 15.
Elizabeth Holmes or Michael Milken?
Bankman Fried, a graduate of the Massachusetts Institute of Technology, had a net worth once estimated by Forbes magazine at $26 billion, riding the boom in the value of digital assets such as Bitcoin. His fortune evaporated in November 2022, when FTX declared bankruptcy after a series of customer withdrawals.
At his month-long trial in Manhattan federal court, three former aides accused Bankman Fried of looting FTX client funds to cover losses at his Alameda Research hedge fund. He testified that he instructed him to help. Cryptocurrency market.
Prosecutors said Bankman Fried used client funds to buy luxury real estate in the Bahamas and donate to U.S. politicians who might support crypto-friendly regulations. Ta.
Bankman Freed testified that he did not know how much Alameda owed FTX until just before the companies went bankrupt.
Mukasey said Bankman Freed’s case is similar to that of another young entrepreneur, Elizabeth, who was sentenced to 11 years in prison in 2022 for defrauding investors at the now-shuttered blood testing startup Theranos. He acknowledged that there were some similarities to the Holmes case.
But he said Holmes was putting patients at risk and suggested Bankman-Freed had more in common with Michael Milken. Michael Milken was a 1980s Wall Street investor known as the “junk bond king” who was released after serving just two years in his first term. He was sentenced to 10 years in prison for fraud.
“Given the same chance, Sam would devote his post-prison life to philanthropy,” Mukasey wrote.
Mom says she’ll change places.
Bankman Fried has been incarcerated at Brooklyn’s Metropolitan Detention Center since August, when Kaplan revoked his bail on suspicion of possible witness tampering.
George Lerner, Bankman Freed’s psychiatrist, wrote in a letter to Kaplan that he was on the autism spectrum. Mukasey wrote that Bankman-Freed struggles to make eye contact and communicate with others and could be vulnerable in prison.
Bankman Freed’s mother wrote that her son took responsibility for the mistakes that led to FTX’s collapse and was remorseful, but said she was worried about life in prison.
“His father and I face the very real possibility that he will not live to see his release,” Freed wrote. “I would gladly replace him if I could.”
(Reporting by Luc Cohen in New York and Kanjik Ghosh in Bangalore; Editing by Clarence Fernandes)
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