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Crime Bitcoin The Courts

FTX Founder Sam Bankman-Fried Found Guilty of Fraud (yahoo.com) 135

Posted by BeauHD from the justice-served dept.
Slashdot readers schwit1 and Another Random Kiwi share the breaking news that FTX founder Sam Bankman-Fried has been found guilty of fraud. From the Associated Press: FTX founder Sam Bankman-Fried's spectacular rise and fall in the cryptocurrency industry -- a journey that included his testimony before Congress, a Super Bowl advertisement and dreams of a future run for president -- hit a new bottom Thursday when a New York jury convicted him of fraud in a scheme that cheated customers and investors of at least $10 billion. After the monthlong trial, jurors rejected Bankman-Fried's claim during four days on the witness stand in Manhattan federal court that he never committed fraud or meant to cheat customers before FTX, once the world's second-largest crypto exchange, collapsed into bankruptcy a year ago.

"His crimes caught up to him. His crimes have been exposed," Assistant U.S. Attorney Danielle Sassoon told the jury of the onetime billionaire just before they were read the law by Judge Lewis A. Kaplan and began deliberations. Sassoon said Bankman-Fried turned his customers' accounts into his "personal piggy bank" as up to $14 billion disappeared. [...] U.S. Attorney Damian Williams told reporters after the verdict that Bankman-Fried "perpetrated one of the biggest financial frauds in American history, a multibillion dollar scheme designed to make him the king of crypto." "But here's the thing: The cryptocurrency industry might be new. The players like Sam Bankman-Fried might be new. This kind of fraud, this kind of corruption is as old as time and we have no patience for it," he said.
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FTX Founder Sam Bankman-Fried Found Guilty of Fraud More

FTX Founder Sam Bankman-Fried Found Guilty of Fraud

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  • Good. (Score:4, Insightful)

    by Marthis ( 1949724 ) on Thursday November 02, 2023 @09:04PM (#63975818)
    He and his cohorts were scum

    • Re: Good. (Score:5, Insightful)

      by Midnight_Falcon ( 2432802 ) on Thursday November 02, 2023 @09:32PM (#63975862)
      A very special kind of scum that believes making themselves super-wealthy is for the greater good of all humanity.
      • âoeTHE GREATER GOOD!!â âoeSHUT IT!!â

      • You should have seen the YouTube video of some influencer where he was being presented as a down to Earth, frugal but charitable crypto nerd who really only wants to save the world and help poor people.
        No mention of expensive mansions and extravagant partying in that video. Unfortunately I can't find it. Maybe the creator deleted it.

        My spidy-sense was really tingling when I saw that, that something seems off with this dude. Fascinating, in hindsight, that it was right. Should probably listen to it more.

      • Re: (Score:2)

        by jythie ( 914043 )
        And they would have gotten away with it if they were not scamming other rich people. The whole 'wealth is morality' ethos is a big part of the community and culture he grew up in, but you are only supposed to transfer wealth from lesser people to greater ones,.

      • A very special kind of scum that believes making themselves super-wealthy is for the greater good of all humanity.

        I'm pretty sure his effective altruism line was either complete BS or extreme motivated reasoning.

        For the most part I think silicon valley folks who espouse EA are largely trying to claim they're hyper focused on wealth so they can donate more, rather than the fact that they just want lots of money.

        The one really rich guy who I think is actually pulling it off is Warren Buffet, but I don't think he's even involved with EA, he just gives away giant piles of money fairly effectively. He even gave up the ego b

    • Not a bankman after all (Score:5, Funny)

      by goombah99 ( 560566 ) on Thursday November 02, 2023 @09:44PM (#63975878)

      But he is fried

  • Sam Bankman-Fraud (Score:5, Funny)

    by xevioso ( 598654 ) on Thursday November 02, 2023 @09:13PM (#63975834)

    So now I can legally make fun of his name without getting sued for defamation! Yaaaay!

    • Sam Bank-Fraud-Man

      • Doesn't work. The original is a much better one because it keeps the original structure, while obviously speaking to the fraud. It doesn't need the "extra help" to make that point.

  • He has the same problem (Score:4, Interesting)

    by rsilvergun ( 571051 ) on Thursday November 02, 2023 @09:43PM (#63975874)
    Has Bernie Madoff and Elizabeth Holmes. His scam got so big that it attracted real 1 percenters. You can rip off as many little old ladies and middle class dentists as you want and nobody cares but when the real big money guys start sniffing around that's when you need to close the scam up. Because those big money 1 percenters are complete fucking idiots who will fall for any scam you put in front of them but eventually when the scam blows up it doesn't matter where you try to run to they will send someone to come get you and you will spend a long long time in prison.

    Not because you took money from them, it's basically impossible for them to lose money with the way are economy is set up to protect them, but because you made them look like idiots and risked the illusion that the emperor has clothes.

    That's the funny thing we live in a world where the emperor knows he has no clothes and it's his subjects that can't seem to figure it out... How most of them don't even realize that they are subjects

    • Re:He has the same problem (Score:5, Informative)

      by Martin Blank ( 154261 ) on Thursday November 02, 2023 @10:53PM (#63975974) Homepage Journal

      FTX and Alameda were under federal investigation before most people had any inkling that they were going to lose money, as indicated by Binance backing out of the deal to buy FTX in part because of the number of open federal investigations, and it later emerged that SDNY had been looking at FTX for months. The charges were about fraud against all customers and investors, big and small (and the overlap, like big mutual funds investing for a lot of little people), and all the financial institutions that were about to take losses.

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      These guys never seem to have an exit strategy either. They know it's a scam, they have more money than anyone would need to live in the lap of luxury for their lifetime and their kids lifetimes. So why not buy citizenship of some country with no extradition treaty and get out while they can?

      They seem to think that somehow it's not going to end in them doing a long stretch in prison. Maybe they think that being a billionaire automatically makes them immune from serious consequences.

      • we generally only go after the last guy holding the bag. He could've handed it off to a fall guy as soon as 1%ers sniffed around and called it quits and got away with it. I don't know what goes through these guy's heads. It's not logic or clear thinking though that's for sure.

  • Disemboweled (Score:4, Interesting)

    by slack_justyb ( 862874 ) on Thursday November 02, 2023 @09:46PM (#63975886)

    The government relied heavily on the testimony of three former members of Bankman-Fried’s inner circle, his top executives including his former girlfriend, Caroline Ellison, to explain how Bankman-Fried used Alameda Research to siphon billions of dollars from customer accounts at FTX

    All of them took guilty pleas for their related crimes, in exchange for reduced sentences they fucking decimated dude in court, it was glorious reading about it. Federal prosecutors, once they find that one crack, they are incredibly good at stacking people willing to plea guilty to testify against others less affable.

    But under cross examination, “he was a different person,” the prosecutor said

    Also note. Don't testify in your own trail. That is never a good idea. Bankman-Fried was already dead in the water by his associates testimony, but holy shit that jury watched prosecutors fucking eviscerate a man on the stand in real time. I bet Sam thought he was going to be clever, but fucking shit, he'd say one thing and they'd get him in an almost gotcha with something he said two minutes earlier. That guy couldn't say "good morning" without Prosecutors bringing up shit he just said to the contrary fifteen seconds ago. Dude was having organs removed by a smiling Federal attorney while he stuttered over and over again like an 100 year old who just got caught outside the Alzheimer's ward. I would say he learned a good lesson about testifying at your own trail, but prosecution was so smooth as cutting him into chum, I don't think the signals ever made it to his brain to indicate something was wrong. I don't know what was going though that guy's head, but clearly he vastly underestimated how really good at their jobs Federal prosecutors are.

    Dude is like 31 years old so, maybe they'll go easy on him and let him out when he's in his 70s? As it stands though, he's looking at something a tad over a century in prison length.

    • Re: (Score:2)

      by ls671 ( 1122017 )

      As it stands though, he's looking at something a tad over a century in prison length.

      I thought prisons were measured in football fields!

    • All of them took guilty pleas for their related crimes, in exchange for reduced sentences they fucking decimated dude in court, it was glorious reading about it.

      You keep using that word, I do not think it means what you think it means.

    • I wonder if he will end up at what's known as a Club Fed prison - supposedly more relaxed compared to regular prisons?

      Am not an American so have no idea on the types of prisons in the US.

      • He absolutely will. This wasn't violent crime, so at the most he'll be in medium security. But likely he'll be at a light-security "camp" prison, a.k.a. Club Fed.

        • Re: (Score:2)

          by hawk ( 1151 )

          speaking as an attorney who handled criminal law in my distant path . . .

          It is *well* worth tax dollars to fund those places for two primary reasons:

          1) they cost less to operate, but
          2) more importantly, it stops the two types of convicts from meeting one another while they have plenty of time on their hands!

          hawk, esq.

    • What I don't understand is why he even went to trial. When your co-conspirators all enter guilty pleas and agree to testify, your chances at trial are essentially zero and any sane person also looks to plea guilty and try to get a reduced sentence. This is especially true if you are a compulsive liar who cant' even keep track of the lies you just told. I have no idea why any lawyer would even be willing to take this to trial. Sure you want to represent high-profile clients but if they aren't smart enoug

      • and any sane person also looks to plea guilty and try to get a reduced sentence.

        Well there's your problem. SBF thinks he's smarter than everyone else, and has reportedly shared his views that anyone over the age of 40 is useless. He probably thought he would be able to hoodwink the prosecutors and jury because he's just so smart.

        Of course, a federal prosecutor is basically never a fresh face out of law school, having compiled a multi-year record of putting shitheads in jail as an assistant district attorney before being employed in a US Attorney's office as a line prosecutor, so this

        • I guess there's where we tacitly agree! I would argue that continuing to think you are smarter than everybody else after getting caught at a fraud that you thought you could get away with because you were smarter than everybody is indeed a form of insanity. But to be clear I am not a psychiatrist and can't actually diagnose anybody and SBF is not my patient.

  • No shit (Score:4, Insightful)

    by RightwingNutjob ( 1302813 ) on Thursday November 02, 2023 @10:01PM (#63975898)

    Confessing to fraud is usually a good way to get prosecuted and convicted for fraud.

    Sorry. Let me spin this a little better. A tragic figure, really. His only mistake was stealing other people's money in plain view of the feds.

    • Every time he could not shut up in interviews, he was probably thinking he was saying: "I have nothing to declare, but my genius".

      But everyone else heard him say: "I like big frauds and I cannot lie, no investor can deny".

    • Re: (Score:2)

      by ls671 ( 1122017 )

      His only mistake was stealing other people's money in plain view of the feds.

      I think it's a good idea to have the feds in plain view if you wish to commit fraud. Better keep an eye on them! /s

    • Usually if you've been caught red-handed, you try to negotiate a guilty plea for a reduced sentence.

  • Don't Drop the Soap wait he can buy protection from the other inmates

  • Nelson said it best [youtube.com].
  • That was a fast deliberation. I wonder if the jury even got lunch out of the deal.

    • Apparently, they delivered the verdict after coming back from dinner, so they got some pizza out of it. (Judge Kaplan said that would be the only kind of meal provided.)

      • Re:Lunch (Score:4, Interesting)

        by innocent_white_lamb ( 151825 ) on Thursday November 02, 2023 @11:59PM (#63976022)

        Was the judge eating only pizza as well?

        The jury is supposed to be the most important people in the room but they are the lowest paid (if they are paid at all), they are ordered around by the judge and the bailiffs at a whim,they are allowed to hear only the evidence that the judge decides they are allowed to hear, and they are not allowed to do any research or ask any questions at all.

        • Was the judge eating only pizza as well?

          The court paid for the pizza. The judge pays for his own food.

        • they are allowed to hear only the evidence that the judge decides they are allowed to hear, and they are not allowed to do any research or ask any questions at all.

          This is because the jury is supposed to only weight the presented FACTS, rather than whatever horseshit they come up with on their own via Twitter or Tiktok or whatever. The judge is there to prevent the inclusion of things that are not provable facts germane to the case, or anything that wasn't properly or legally obtained through the rules of evidence handling, which largely protects defendants against prosecutorial and police misconduct. It also means that all discovered and relevant facts that will be

    • Per the NYT Matthew Goldstein who was there in person:

      The jury of nine men and three women began deliberating at 3:15 p.m. and was out for a little over four hours including dinner.

  • Oh wow! What an unexpected turn of events (Score:3)

    by Rosco P. Coltrane ( 209368 ) on Thursday November 02, 2023 @10:37PM (#63975952)

    I'm organizing a Free Sam march right now! Ala Free Kevin.

  • Why, I can't believe it! (Score:3)

    by MachineShedFred ( 621896 ) on Thursday November 02, 2023 @11:07PM (#63975978) Journal

    You mean a guy that was already headed to the bottom of the ocean before he decided to step onto the witness stand and get pulverized into a thin red paste by the Federal prosecutor's cross-examination was found guilty in less time than it would take the jury to watch a Peter Jackson director cut film?

    I love how you don't even need to understand a damn thing about crypto, or financial markets to understand why he's guilty. Postulate him as a traditional banker, with lots of customer deposits on hand. It just turns out that he's a traditional banker with a raging sports gambling problem, and the Super Bowl just cleaned him out on a "sure thing". Would you find that traditional banker guilty if he took customer deposits out of the bank and paid his sports book?

    Oh look, unanimously guilty. Thanks for the pizza.

  • He'll have to exchange the business suits sans a tie and trade them in for prison uniforms, but at least they won't be orange. In Federal prisons, the clothes are khaki, or so I am told by people I know who have been unfortunate enough to have lived in such places.

    As for the to-be-convicted-Orange-Eminence-soon-as-next-year is concerned, it's a shame that he won't have to wear orange either. It would go so well with his coloring. Of course, I doubt they wear khaki in Georgia prisons which it seems he wil

  • Scam Bankman-Tried /s

  • That was the shitcoin story of the day and we can get to more interesting topics now.

    • Re: (Score:2)

      by irving47 ( 73147 )

      I certainly realize crypto has dominated too many news cycles for too long, but do you think it shouldn't be covered at all? This is a pretty high profile case and slashdot seems like a highly relevant outlet to be mentioning it... Should they ignore it from now on?

      • Care to show a single shitcoin story in the past ... well, ever, that didn't revolve around theft, fraud or other criminal activities?

        It's a crook's playground. We get it. Can we move on to more relevant things now?

  • He's not going to really be punished.
    This guy stole BILLIONS, with a "b".

    Is there ever a financial crime that Randy's in something more than a cushy minimum security incarceration which, let's be honest, isn't all that likely to be different than the life a nerd would live anyway.

    • no adderall, no league of legends. i would say no polyamory but at the very least, it won't be on his terms, though i admit outright rape is unlikely.

      comfort is relative, and it'll still be a big step down for him. it's a shame he won't be housed in a tent jail eating blended food blocks and lukewarm water but, hey, we can't have everything.

    • I'm pretty sure that even a minimum-security Federal prison is still going to be punishment for a billionaire:
      No private jets to the Bahamas.
      No multi-hundred dollar bottles of wine to go with your Japanese wagyu steaks you can't get.
      No Michelin-star restaurants.
      No private chef.
      No Bentley to roll around in.
      No smartphone.
      No Internet outside of what you can access on the prison library in the time you get.
      No phone calls outside of the collect calls you ca

  • Has all the politicians who received his laundered drug money returned it to the drug dealers?
  • People received extremely valuable tokens.

  • Anyone heard anything about what companies got bilked the hardest? I heard Disney lost between 2-3 Billion. But I think it was just speculation. Have they released the list of victims? Is that something we can or should expect?

    • In many of these cases, the list of victims isn't released. If a list is released, a whole new group of scammers starts calling the victim claiming they can help with recovery and then proceeds to execute a new fraud against the same individuals. One would think that after touching crypto-currency a person would learn and become largely scam-proof but that doesn't seem to be the case. Instead they tend to be desperate enough to be vulnerable to further victimization.

  • I hope, I really hope, that I don't have to wade through more interminable headlines about this guy and FTX.

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