Ex-FTX boss seeks 6-year jail term, no restitution
FTX cofounder Sam Bankman-Fried should serve no more than 6½ years in prison for orchestrating the fraud that brought down the cryptocurrency exchange, his lawyers told a federal judge who could issue a sentence of as long as 20 years for the most serious charges.
Attorneys for the 31-year-old former crypto mogul made their recommendation to US District Judge Lewis A. Kaplan in a 98page memo late Tuesday ahead of his March 28 sentencing. The filing includes letters from Bankman-Fried’s supporters, including his parents and public health advocates from Africa, attesting to his charity work.
Under federal sentencing guidelines that take into account “Sam’s charitable works and demonstrated commitment to others, a sentence that returns Sam promptly to a productive role in society would be sufficient, but not greater than necessary, to comply with the purposes of sentencing,” according to the memo.
Citing the advisory guidelines, Bankman-Fried’s lawyers said a “just sentence” would be a prison term in the range of 63 months to 78 months.
His lawyers also recommended that he not be ordered to pay restitution or forfeit any assets, saying none of the accounts identified for possible forfeiture were for Bankman-Fried’s personal benefit. They argued that customers and creditors will receive a return of their funds through FTX’s bankruptcy.
Bankman-Fried was convicted in November of charges including wire fraud and conspiracy following a two-month trial. Kaplan’s final decision on sentencing could be a guidepost for other cryptocurrency executives who mismanaged funds.
Prosecutors have until March 15 to file their response to the memo.
US probation officials recommended a sentence of 100 years, Bankman-Fried’s lawyers said in the memo, calling the proposal “grotesque” and “barbaric” and arguing that it’s based on a flawed assumption that his offenses involved a loss of $10 billion.
Bankman-Fried last month hired Marc Mukasey, a former federal prosecutor and experienced white-collar defense attorney, replacing the lawyers who represented him at trial. Mukasey, who has a history of representing white-collar defendants, late last year secured a four-year sentence for Nikola Corp. founder Trevor Milton, well below the 11 years sought by prosecutors, in the same court where Bankman-Fried is being sentenced.
Letters from psychiatrists, including an autism expert, were included in Tuesday’s filing. While Bankman-Fried has not previously disclosed an autism diagnosis, his ADHD became an issue at trial. His lawyers repeatedly complained about Bankman-Fried’s struggle to access medication while in custody.
His father, Joseph Bankman, alluded to mental health issues in a letter to the judge.
“Sam has struggled throughout his life to learn and control things most of us take for granted, such as eye contact, small talk, and responding to social cues,” Bankman wrote.
The FTX cofounder’s father urged Kaplan not to impose a “draconian sentence” that would likely lead to placement in a high- or medium-security prison.
“Such a setting would put Sam in an environment where his responses to social cues will sometimes be seen as odd, inappropriate and disrespectful; when that happens, he will be in significant physical danger,” Bankman wrote. “Nothing he has done can justify putting him at that risk.”
Bankman-Fried’s sentence is unlikely to match some of the largest punishments handed down to white-collar criminals, such as Sholam Weiss, who received 845 years in prison in 2000 for racketeering and fraud linked to the collapse of National Heritage Life Insurance Co. His sentence was later commuted by President Donald Trump. Bernie Madoff died in prison while serving a 150-year term for his $20 billion Ponzi scheme.
His lawyers said the most comparable case is that of Michael Milken, the so-called “junk bond king” who was convicted of securities fraud in the 1980s and banned from the securities industry but remade himself into a philanthropist. Milken, who was pardoned by Trump in 2020, was released from custody at a young age and went on to become “a tremendous force for good,” Bankman-Fried’s lawyers said.