Come for the politics, stay for the snark.

So it was an October Surprise A Day, like an Advent calendar but for crime.

Nothing worth doing is easy.

People really shouldn’t expect the government to help after they watched the GOP drown it in a bathtub.

Republicans don’t want a speaker to lead them; they want a hostage.

I desperately hope that, yet again, I am wrong.

Shallow, uninformed, and lacking identity

The arc of history bends toward the same old fuckery.

How can republicans represent us when they don’t trust women?

You know it’s bad when the Project 2025 people have to create training videos on “How To Be Normal”.

Some judge needs to shut this circus down soon.

Following reporting rules is only for the little people, apparently.

“When somebody takes the time to draw up a playbook, they’re gonna use it.”

ha ha ha! Nice try weird people.

Another missed opportunity for Jamie Dimon to just shut the fuck up.

Second rate reporter says what?

The arc of the moral universe doesn’t bend itself. it’s up to us.

You cannot shame the shameless.

These days, even the boring Republicans are nuts.

I also would like a pony to improve my balloon juice experience.

FFS people, this was a good thing. take the win.

Republicans: slavery is when you own me. freedom is when I own you.

Fuck the extremist election deniers. What’s money for if not for keeping them out of office?

Donald Trump, welcome to your everything, everywhere, all at once.

We’ve had enough carrots to last a lifetime. break out the sticks.

You are here: Home / Economics / C.R.E.A.M. / Late Night Moderate Justice Open Thread: Sam Bankman-Fried Sentenced to 25 Years

Late Night Moderate Justice Open Thread: Sam Bankman-Fried Sentenced to 25 Years

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Yeah, I too would’ve been happy to see him thrown under the jail, but twenty-something years is not nothing. By the time SBF is a free man, whole new realms of grift — I mean, exciting alternative financial ventures — will have been developed, and hopefully he will never again be able to cheat so many people with such impunity.

Just like the jury deliberations, Sam Bankman-Fried’s sentencing was brief. Commencing at 9:30, the sentence was delivered before noon.

The judge began the sentencing hearing by ruling on a few points of contention from the sentencing memorandums, after which he established Bankman-Fried’s numeric offense level.

The most substantial disagreement was on the topic of the loss amount. The government contended that the total loss to FTX’s customers and investors and to Alameda’s lenders was $10 billion, on the low end. The defense argued that the loss was zero. Many pages in each side’s sentencing memorandums were devoted to arguing over this.

The judge was quick to rule: “I reject entirely the defendant’s argument that there was no actual loss.” The claims that customers and creditors will be repaid is at this point purely speculative, as the bankruptcy proceedings are still underway. He added that while the success of some of Alameda’s investments, and the recent rise in cryptocurrency prices, is fortuitous for creditors, it does not make Bankman-Fried’s crimes any less severe…

When discussing the government’s proposed sentencing enhancement for obstruction of justice, Kaplan first referenced Bankman-Fried’s attempt at witness tampering in January 2023. Although that alone was enough to justify the enhancement, Kaplan also described three specific instances in which he determined Bankman-Fried had committed perjury while testifying:

1) Claiming that he did not know Alameda Research had spent FTX customer deposits until fall 2022
2) Claiming that he first learned of Alameda’s $8 billion liability to FTX in October 2022
3) Claiming that he did not know repaying Alameda’s loans in mid June 2022 would require Alameda to borrow from FTX…

Bankman-Fried’s lawyer, Mark Mukasey, delivered the statement for the defense team. Though briefly stating that his team and Bankman-Fried were sympathetic to the victims and their pain, he launched into a hagiography of Bankman-Fried in which he portrayed him as a good, kind, and beautiful person…

Finally, he asked for lenience, appealing to sympathy: “I’m asking the Court not to destroy the prime of this complicated, brilliant, gentle, complex, kind young man’s life. Don’t deprive him of the opportunity to meet a partner or have a baby or work at a charity or teach kids or use his beautiful mind.”

Mukasey did a halfway decent job, I think. Better than Bankman-Fried’s previous, somewhat bumbling defense team. But even more capable lawyers apparently couldn’t stop Sam Bankman-Fried from being Sam Bankman-Fried…

[SBF] began by acknowledging Sunil Kavuri’s victim statement, even agreeing with him that funds were being squandered by the bankruptcy team. He repeated his tired claims that the money is all still there, and claimed that the estate has billions of excess dollars with which it could repay all creditors in-kind or at current crypto prices, and reimburse investors.

He spoke of his mistakes, but then explained that he was referring to his decision to declare bankruptcy and relinquish control of the company — not to the decision to misappropriate billions of dollars of customer assets. He acknowledged that he was among the people who had “failed” customers — but couldn’t help but spread the blame around to some others, too.
 
And he ended his statement in a bizarre and probably ill-advised way: by claiming that “there is a big opportunity in the world to do what the world thought I would do” — that is, start a lucrative cryptocurrency business…

[Prosecutor Nick] Roos pushed back against Bankman-Fried’s claims that the collapse was simply a “liquidity crisis or an act of mismanagement or poor oversight from the top”, as established at trial…

Roos described destroyed lives, bankrupted companies, and lost jobs.

And finally, he described the likelihood that Bankman-Fried would reoffend. He pointed to Bankman-Fried’s misconduct while on pre-trial release, his efforts and ideation around rebranding himself, and his statements about creating a new cryptocurrency exchange. He drew upon the defense’s own statements that Bankman-Fried acts not with malice, but with math: “While the line sounds good, it’s troubling because what it says is that if Mr. Bankman-Fried thought the mathematics would justify it, he would do it again.”

Finally, [Judge] Kaplan explained that he shared the prosecution’s concern that Bankman-Fried would reoffend. “There is absolutely no doubt that Mr. Bankman-Fried’s name right now is pretty much mud around the world, but one of the things he is is persistent, and another of the things he is is a great marketing guy,” said Kaplan. His media tour, pre- and post-arrest, demonstrated that he knew how to present a revised version of events. “The mistakes were made, other people are to blame, the bankruptcy people screwed up, this lawyer had a conflict of interest, that lawyer the other thing. [It] doesn’t take much of an intonation to see the outlines of the campaign.” Kaplan explained that his ultimate sentence would be, in part, focused on making Bankman-Fried unable to embark on such an endeavor.

He wrapped up: “The judgment has to adequately reflect the seriousness of the crime, and this was a very serious crime.”…

Can’t extract every point worth covering here, so go read the whole thing!
 
Per the Associated Press, “Fallen crypto mogul Sam Bankman-Fried sentenced to 25 years in prison”:

… Though he described Bankman-Fried as “extremely smart,” U.S. District Judge Lewis A. Kaplan delivered a blistering analysis of Bankman-Fried and his crimes before announcing a sentence that was half of what prosecutors sought and less than a quarter of the 105 years recommended by the court’s probation officers…

Kaplan said the sentence reflected the risk that Bankman-Fried “will be in position to do something very bad in the future. And it’s not a trivial risk at all.” He added that the sentence was fashioned “for the purpose of disabling him to the extent that can appropriately be done for a significant period of time.”

Kaplan said he would advise the Federal Bureau of Prisons to send Bankman-Fried to a medium-security prison near San Francisco because his notoriety, his association with vast wealth, his autism and social awkwardness are likely to make him especially vulnerable at a high-security facility…

 
Per the Washington Post:

… Under federal rules, Bankman-Fried probably will serve more than 21 years in prison before he can be eligible for release. Kaplan said he should serve his sentence in a low- or medium-security institution near his parents’ home in the San Francisco Bay Area. Although he castigated Bankman-Fried, the judge said the prosecution’s sentencing request was “substantially greater than is necessary.”

The 25-year sentence is longer than most sentences for high-profile white-collar crimes, although Bernie Madoff received a 150-year sentence in 2009 for running a Ponzi scheme that cost victims an estimated $20 billion or more; he died in prison 12 years later. Elizabeth Holmes, who took in hundreds of millions from investors for blood-testing start-up Theranos, was sentenced in 2022 to more than 11 years in prison…

Bankman-Fried on Thursday claimed that FTX still had the money, spread across various accounts and investments, to fully restore customers’ funds. “There’s plenty of assets to do that,” he said. “There’s billions more. It’s been true the whole time.”

John Ray III, who is leading the company through the bankruptcy process as chief executive, had criticized that stance in a letter to the court. The defense’s assertion that FTX customers and investors suffered no harm is “callously and demonstrably false,” Ray wrote before Thursday’s hearing.

Bankman-Fried cast aspersions on that ongoing bankruptcy and said FTX’s problems amounted to a “liquidity crisis” that should have lasted only a few weeks. But Roos took issue with that view. “It wasn’t a liquidity crisis or an act of mismanagement or poor oversight from the top,” the prosecutor said. “It was the theft of billions of dollars.”…

The case has affected the whole cryptocurrency industry. University of Richmond law professor Carl Tobias pointed to FTX’s collapse as motivation for the Biden industry’s push to regulate cryptocurrency companies: “It’s Exhibit A for arguing to regulate this as we regulate other activities, especially in the stock market.”

Reader Interactions

82Comments

  2. 2.

    NotMax

    Five times as long a sentence as Charles Ponzi received on federal charges. Ponzi was released after 3½ year in prison and then stood trial and was sentenced to additional incarceration on a variety of state charges in both Massachusetts and Florida.

  3. 3.

    Odie Hugh Manatee

    The sooner SBF the crook is out of the news the sooner that SBF goes back to meaning small block Ford (engine). Too bad he couldn’t have been SBC.

    Just was coming back from getting a glass of milk and Stewie was on a dining room chair waiting to attack me as I passed by. I missed the pointy ears sticking up above the back of the chair so he was able to tag me in the arm as I passed, startling me into spilling a little milk. Luckily we have a hardwood floor in the dining room so easy clean up. I’m his Lois Griffin and he loves to pull this shit.

    I got my revenge by chasing him down, picking him up under his forearms and holding him against my legs so I could rub the crap out of his belly while saying “I’m gettin’ some kitty belly!”. He loves it, as do I.

  4. 4.

    SpaceUnit

    I have a big box of crayons and what I feel is the necessary talent to become a courtroom artist.

  5. 5.

    Ruckus

    Will he learn anything positive?

    I’m on the not likely side of that question.

    In some ways I think we often give too tough of sentences in this country. But then along comes someone who has such a scam that it boggles the mind in its degree of scam. And who likely thinks that if he could not get caught, this would be the perfect scam. OTOH he may not even understand that it is a scam. In which case I’d bet that even 50 yrs wouldn’t teach him jack or shit.

  6. 6.

    WhatsMyNym

    Bankman-Fried on Thursday claimed that FTX still had the money, spread across various accounts and investments, to fully restore customers’ funds. “There’s plenty of assets to do that,” he said. “There’s billions more. It’s been true the whole time.”

    I’m inclined to believe him, he’s got it stashed away safe from anyone finding it.

  7. 7.

    Anne Laurie

    @Ruckus: OTOH he may not even understand that it is a scam. In which case I’d bet that even 50 yrs wouldn’t teach him jack or shit.

    He’s already been ‘making crypto recommendations’ to the guards, as well as his fellow inmates.

    Either he doesn’t understand the difference between ‘honest’ and ‘crooked’… or he doesn’t understand that other people have the same reality that he does.  Possibly both!

    There’s a chance prolonged incarceration may, at least, train him not to assume that he’s the only actual Player in the Great Game.  Even in a ‘medium security’ country-club facility, he may at least be subject to the kind of  ‘Cheat the wrong guy, get physically rebuked’ which most of us learn in kindergarten.  I’m not a fan of hitting, but I can attest it’s a permanent method of getting the point across…

  8. 8.

    Jay

    @WhatsMyNym:

    I’m inclined to believe him, he’s got it stashed away safe from anyone finding it.

    Probably not. He wasn’t the only one looting FTX, and there was a major hack/theft of a bunch of the larger accounts.

    There is some money out there, some hidden by FTX Exec’s, but not enough.

  9. 9.

    Shalimar

    His dad should get 25 years.  SBF should get many times that.  If he had robbed 3 convenience stores, he would have gotten more.  Always steal big.

  10. 10.

    Ruckus

    @Anne Laurie:

    Some people never learn.

    Some of them because they think they know everything. Some because they think that not even their exhaust stinks. Some because both.

    In this case I’m going with #3.

  12. 12.

    MattF

    ‘Effective Altruism’ is the philosophical justification for being a sociopath. ‘There’s an arguable long-term optimal benefit for you to do my laundry’ is not a good argument for me ordering you to do my laundry. Optimization is harder than that.

  13. 13.

    bjacques

    Judge Kaplan should have ruled 50 years in an iso-cube, citizen!

     

    Seriously, since SBF’s ethics boiled down to calculating the rewards outweighed the risk of getting caught or being able to talk his way out of it if he did, it seems the judge made a similar calculation on behalf of the government, that the risk of SBF reoffending and failing to compensate his victims outweighed the benefits of letting him walk.

    I also wonder if another sentencing factor was SBF’s virtue-signaling of public donations to Democrats (who held all three branches of government then) and private donations to Republicans, which easily duped the likes of Musk.

  14. 14.

    sab

    He is a conman and deserved what he got. But I have very little sympathy for people investing in crypto, which was essentially an end run around all the banking regulations which protect us from people like him so that they we can do bad stuff without supervision, mostly but not entirely tax avoidance. Crypto puts tax avoiders on the platter for serious thieves.

    ETA Avoiding tax reporting means you are avoiding all the protections also. Too bad so sad.

  15. 15.

    Baud

    Via Reddit, some good news

    Crystal Mason: Texas woman sentenced to five years over voting error acquitted

    Appeals court rules Mason, now 49, did not know she was ineligible when she voted in 2016 and throws out conviction

  16. 16.

    SpaceUnit

    I really don’t care about the jail time.  I just want him to get a fucking haircut.

  18. 18.

    AlaskaReader

    All capitalism is a con.

    We promote capitalism and then struggle with regulating it because it’s entirely fundamentally a con game.

    A capitalist sells goods, or provides a service, and must figure a way to profit.

    That profit means the capitalist must find a way to derive more ‘value’ than the goods or service are worth.

    The many ways to do that are either ‘regulated and licensed’, thereby legal, or those  means are unregulated and unlicensed, meaning some of those means are punishable by the regulators and the licensors.  What is called ‘white collar’ crime.

    Then there are the largely unspoken, far worse, but nonetheless criminal means of making profit that underpin most of a capitalist system, primarily means like avoiding paying upstream costs, and/or downstream costs, or more definitively, pushing off those costs on others.  All of which means of making profits are just looked upon as ‘business savvy’ by the licensors and the regulators. …(and the unmindful public as well.)

    Global warming is the poster child of the result of that latter criminal means of attaining profit that will likely never be punished.

    This guy’s billions of dollar crimes pale in comparison.

    I want Exxon and the rest to pay their debt they owe to society.

    Wake me up when that starts being prosecuted.

  19. 19.

    sab

    OT Sometime around 2017 we placed my dad in what was then the gold standard of nursing homes in my city. Mom, who had died, proclaimed that, so I being an idiot, took her at her word and did no research and parked him there in memory care.

    Years later this previously nice nursing home became toxic. They brought in hospice a year ago, but all of a sudden in the last few months they were over medicating and he became a drooling gork. His private duty care nurse protested. They harrassed her a lot.  Told me she was argumentative. Etc etc. Told me my dad was too violent to keep he is 99, after all their medication he can no longer stand.) His violence threatens them??

    So we just moved him to a much better facility.

    Winding up at the old place, the head nurse on his ward is upset that he is gone. Also the social worker. He is a sweet old guy that they quite liked.  So he wasn’t the angry violent guy that management was offloading.

    Then we opened the morning paper, and his nursing home got several grants  to start a senior daycare center, and the pilot project wants his floor. They are medicating everyone to need higher care (upstairs, and they will charge families for that higher care they are creating)  and families that object to the higher medication will have their people ejected.

    I hope my siblings recognize that watchful eldercare is not easy or fun. I didn’t want to move him, but I should have recognized sabotage and bad faith months ago. We will find out if malicious medication results can be reversed.

  24. 24.

    sab

    @sab: If they had just told me what they were up to and why we would have quietly moved him. Instead we got months of disparagement of him, our private duty nurse, and serious over medication.

    Harm has been done to him. I am still trying to calm myself down enough to not start a stupid lawsuit.

  27. 27.

    sab

    @eclare: So far, day one, it has been amazing. We should have been here months ago. They even have two big friendly dogs and a cat on the memory ward. The aides are lovely and the nurse has been a huge help.

  31. 31.

    sab

    a

    @eclare: Yes, but I wish he was the guy before three months of ativan, and morphine sulphate. 99 year old brains don’t always recover.

    But he did recognize me, which he hasn’t done in months. My little sister doesn’t want to come back to visit him because she is the spitting image of our mom and he might get confused. Weird dilemma to have. Dad’s favorite daughter is the oldest, interested in their own weird stuff. She had been out of the country this year. New address to visit him.

  32. 32.

    Anne Laurie

    @Shalimar: His dad should get 25 years.

    In a perfect world, both of his arsehole parents would be sentenced, preferably to a joint cell.  From all indications, they knew their darling boy was Not Right, but it was more fun to show him off to their Stanford cronies as a kind of high-sentience performing pet than to get him the help he needed.  And once he’d started grifting those dishonest billions, they were only too happy to stick out their hands & help him ‘effectively use’ (hide) a portion of the assets he’d stolen.

    The Crumbleys (Oxford school shooter’s parents) seem to have been feckless idiots living on the margins.  Professors Bankman and Fried have no such excuse.

  33. 33.

    sab

     

    @Anne Laurie:  Excellent point which no court in the known world will recognize.

    But Crumbleys fuckups got kids killed, who could have had long useful happy lives.

    The toxic money guy ripped off people who should have known better and are still alive

    ETA I do not know what I did to get blank box at top of post

  34. 34.

    sab

    @sab: The residents are stuck, but if the dogs stand at the door looking hopeful they can get out to wander the rest of the place. When I left last night Dad was eating dinner and the big barky Great Pyrennees  guard dog was asleep in front of the fireplace.

    What an amazing place. Nursing home with guard dog asleep in front of the fireplace.

  36. 36.

    sab

    @Baud: Yes as far as I know. He was entitled to functional parents, which God chose not to give him.

    I am a step-mother of two sets of kids. Not all parents are the same. Some are not entitled to the label that they still legally have. Others are excellent. Kids are stuck with what God gave them, not up to the job.

    ETA Yes I think the shooter deserves some slack, but if my kid had been killed by this poorly parented fuckup I would feel very differently.

  37. 37.

    eclare

    @sab:

    That’s great that he recognized you!  I know reality exists, but it sounds like this place is so much better, so maybe he can make some progress.  Plus, dogs!

  45. 45.

    sab

    @eclare: and a cat! I have five cats and only one is suitable for a nursing home but she was born for that and is wasted here.

    I love her a lot but might suggest her there.

  48. 48.

    Gvg

    @AlaskaReader: You do not understand capitalism or profit and are coming to invalid conclusions because you start with not understanding what the words mean. The first word you misunderstand is value. And you are ignoring the value of labor plus that there is labor, risk and cost in transportation, selling and processing.

    There are cons that happen with in capitalism, but they are not what capitalism is.

  49. 49.

    eclare

    @sab:

    Oh that would be awesome!  I only have one cat, but she would not be suitable for a nursing home.  She has more of a barn cat personality.  Unless she wants food.

  52. 52.

    Betty Cracker

    I’ve never been able to watch basketball because the sound of the shoes on the court is painful to me. My sister played in high school, and I’d go to her games with a Walkman turned up full blast to block out the horrible squeaking.

  55. 55.

    trnc

    I assume that Musk has revised his “Dem, so no investigation” line to “They only prosecuted because I shamed them.” Meanwhile, the evidence that he and other republicans have no shame continues to pile up.

  58. 58.

    Dorothy A. Winsor

    @Ruckus: At this point, I don’t care about teaching SBF a lesson. I just want him somewhere he can’t keep scamming people. He has no remorse. If he’s walking around free, he’ll do the same thing again.

  59. 59.

    trnc

    @eclare: Judge Kaplan sure does get high profile cases.

    And complex ones. Unlike a certain federal judge in Fla, he seems to know how to handle complex, high profile cases.

  60. 60.

    trnc

    @Dorothy A. Winsor: At this point, I don’t care about “teaching” SBF a lesson. I just want him somewhere he can’t keep scamming people. He has no remorse. If he’s walking around free, he’ll do the same thing again.

    I’m all for rehabilitation when possible, but some people are incorrigible and SBF appears to be one of them. Punishment is appropriate, but he also needs to be restricted from running a financial business when he gets out.

  63. 63.

    LiminalOwl

    @sab: omg that’s horrendous.  Much sympathy to you and your family, and hopes for as much recovery as possible for your father.

    IANAL, so can’t say anything about the advisability of lawsuits, but this sounds to me like a prime case of elder abuse, at the very least. Might reporting of that to the appropriate agency do a little towards holding management accountable? Especially if other residents’ families could be inspired to do likewise?

  65. 65.

    Shalimar

    @sab: If they had just told you, admitting it would have been overwhelming evidence for your lawsuit.  They are violating medical ethics for profit.  By not admitting it, they are hoping the cost of a lawsuit deters almost everyone from pursuing damages.

  71. 71.

    Brachiator

    Sam Bankman-Fried was sentenced to 25 years in prison for a cryptocurrency fraud that unraveled with the collapse of FTX, once one of the world’s most popular digital currency exchange platforms.

    This was always bullshit. I stopped following it a long time ago. Except for one thing. I want to see Trump convicted and thrown into jail for twice as long.

    That’s my dream.

  76. 76.

    Paul in KY

    @eclare: They have a real tough game tonight. I think this is the best UT team since 77. Do think they will win tonight, but in no way a given. They certainly have to play better than they did against UK at end of regular season.

  79. 79.

    AlaskaReader

    @Gvg:

    I don’t understand value?  I don’t understand labor?

    That’s hilarious.

    Tell me someone else hasn’t profited off of the value of my  labor.

    Who profits from the value of labor? Capitalists.

    I don’t understand risk?

    What do you think capitalists avoid when they push off costs on others.

    Consumers and innocents bear the costs of risk.

    Perhaps it is you who does not understand the meaning of words.

  80. 80.

    Kayla Rudbek

    @sab: I don’t think that a lawsuit would be stupid in this situation (I am a lawyer but I am not your lawyer and I am not an elder care lawyer)

  82. 82.

    Ruckus

    @Dorothy A. Winsor:

    Oh I agree. I’ve met a few wealthy folks in my time, especially when I worked full time in pro sports. Not all of them have their exit port where their mouth belongs, some are actually decent humans. Some of them don’t come anywhere near close to decent. Or human.

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