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Crime

Sam Bankman-Fried Deserves 40-50 Years in Prison For FTX Fraud, Prosecutors Say (cnbc.com) 85

Posted by msmash from the prison-time dept.
Sam Bankman-Fried should spend between 40 and 50 years in prison after being convicted for stealing $8 billion from customers of his now-bankrupt FTX cryptocurrency exchange, prosecutors said on Friday. From a report: "His life in recent years has been one of unmatched greed and hubris; of ambition and rationalization; and courting risk and gambling repeatedly with other people's money," federal prosecutors in Manhattan wrote. "And even now Bankman-Fried refuses to admit what he did was wrong." A jury found Bankman-Fried, 32, guilty in November on seven counts of fraud and conspiracy.

Lawyers for the former billionaire told U.S. District Judge Lewis Kaplan that a 5-1/4 to 6-1/2 year prison term would be appropriate. They said FTX clients would get most of their money back, and that Bankman-Fried did not set out to steal. Kaplan is scheduled to sentence Bankman-Fried on March 28 in Manhattan federal court. Bankman-Fried plans to appeal his conviction and sentence.
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Sam Bankman-Fried Deserves 40-50 Years in Prison For FTX Fraud, Prosecutors Say More

Sam Bankman-Fried Deserves 40-50 Years in Prison For FTX Fraud, Prosecutors Say

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  • By Luck (Score:4, Interesting)

    by Deal In One ( 6459326 ) on Friday March 15, 2024 @04:17PM (#64318449)

    It only seems that it's by luck that the victims can get back most or all of what they put in the exchange. That may not include the investors who pumped in millions (or billions) into FTX.

    If the investments made by FTX had failed, it would have been worst.

    If the economy was different, it would have been worst.

    And if he didn't get into trouble earlier, he would still be doing the shit he has been doing the pass few years before he was caught. I don't think luck on the economy should factor into how he is punished as he would have probably carried on as he has, even if FTX got lucky.

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      What would the point of a 50 year sentence be though? Clearly wasn't a deterrent for him and many others who ran lesser crypto scams. Is it really worth paying all his living expenses for 5 decades just to get revenge for what he did?

      Seems like it would be better to let him out after say 5 years to fend for himself, with a limit on what kinds of financial institutions he can be involved with.

  • Proper sentencing and punishment (Score:4, Insightful)

    by PseudoThink ( 576121 ) on Friday March 15, 2024 @04:34PM (#64318495)

    I'm glad that the judge involved in the case will be the one to determine the appropriate sentence, and not a bunch of Internet randos with strong opinions but who know nothing of the details or nuances of the court proceedings.

    However, I wish our society had evolved past the idiocy of purely punishment/prison-based solutions for criminal justice. That's what this highlights. I doubt a 50-year prison sentence is going to produce a significantly different result than a 6-year one, either in terms of dissuading would-be copycats or reforming SBF's mindset. Seems like the sentence is more for the sake of retribution, optics, or politics, than any kind of sincere attempt at effective justice.

    • Re:Proper sentencing and punishment (Score:4, Insightful)

      by awwshit ( 6214476 ) on Friday March 15, 2024 @04:43PM (#64318517)

      Prison terms in the US are kind of crazy, for the most part. Worse, its just housing with very little in the way of rehabilitation, its why we have such a high recidivism rate.

      • Re:Proper sentencing and punishment (Score:4, Insightful)

        by Anonymous Coward on Friday March 15, 2024 @04:54PM (#64318555)
        If I was a victim, you're damn right I want to see punishment and not rehabilitation.

        • I would too. The fact remains that it is nonproductive for all but {psyco|socio}paths. Ultimately the goal needs to be to rehabilitate and prevent recidivism and to not expect punishment.

        • Re: (Score:3)

          by ceoyoyo ( 59147 )

          That's why we have modern justice systems. Society is better off if you emphasize rehabilitation rather than retribution. Especially so if you don't let the victims decide the punishment.

          If you disagree, there are some options where you could move. Some tribal societies around that retain the practice of retributive justice administered by victims. Some Sharia law countries have eye-for-an-eye crimes where the victim or victim's family can decide the punishment. In Saudi Arabia, for example, a murder victim

          • society is usually better off when you strike a balance between the two, neither rehabilitation or retribution work on their own.

            • But the US objectively is not striking that balance well. You have the highest prison population in the world, one of the highest per capita (and the company at the top of the list is not good), a system that creates an underclass and an attendant huge recidivism rate.

              • yup the US has got it completely wrong. However that doesn't mean the bleeding hearts that want to go soft on every criminal are right either, they are just looking to get it wrong in the other direction.
          • You forgot the third option: Those who disagree with your assertion about modern justice do not need to move to some other country, they merely need to change the laws in their own country by electing politicians and appointing judges.

            • Re: (Score:2)

              by ceoyoyo ( 59147 )

              Hard to do by yourself, but yes, if you can get enough like-minded types together. The people who do that usually seem to be more motivated by profit than revenge though.

        • Re: (Score:2)

          by Rinnon ( 1474161 )

          If I was a victim, you're damn right I want to see punishment and not rehabilitation.

          Okay, but what if your options are:

          1. "The criminal is punished harshly, but one more person will become a victim of crime in the future as a result."

          or

          2. "The criminal is treated softly and rehabilitated, but one less person becomes the victim of crime in the future as a result."

          Don't get me wrong, revenge is way more satisfying, but big picture, I think it's better to prioritize whatever will lead to less crime in the future. A quick google search / 1st year crim class will show you whether punishment

          • Re: (Score:2)

            by gweihir ( 88907 )

            Indeed. Option 2 also makes society overall a lot more friendly (much less crime) and that does significantly increases quality-of-life for everybody. Revenge is the cave-man option.

          • 2. also means other potential criminals look at the soft treatment and think "what the hell, if I am caught all that will happen is a slap on the wrist". End result is even more crime.

        • And what if you're a potential victim of theft/murder/etc? Which, by the way, you are.

      • Re:Proper sentencing and punishment (Score:4, Interesting)

        by LazarusQLong ( 5486838 ) on Friday March 15, 2024 @05:10PM (#64318587)
        unfortunately, it appears (in the USA) that the vast majority of citizens prefer that Prison be mostly, if not all, about punishment rather than rehabilitation. The high cost of 'warehousing' prisoners is complained about, but actually offering them rehabilitation such that they are no longer recidivists is thought of as 'being mamby pandy or pandering to bleeding hearts or some such... When in reality recidivism in the USA is about 83%, if I read this correctly: https://bjs.ojp.gov/library/pu... [ojp.gov]. At about $40K per prisoner, if we could spend money on rehabilitation, then see how recidivism changes/if it changes for the better, we could then make an informed decision based solely on dollars saved.

        Has this experiment been performed? I do not know, what I do know is that based on those rates of recidivism, merely punishing criminals isn't work to disincentivize criminal activity.

        I used to mentor prisoners who were incarcerated and from what I recall, many would turn to crime again simply because the stigma of having been a criminal meant they could not find jobs! Hence the returned to crime not because they were some kind of hardened criminal beast, but because they needed to find a way to feed themselves!

        • Here is another source. https://worldpopulationreview.... [worldpopul...review.com]

          It shows a 55% reimprisonment rate and 45% reconviction rate in the US after 5 years, which seems to generally be consistent with other countries. The two-year rates are actually better than Sweden which seems to really focus on getting people back into society. The measures are flawed though due to inconsistencies and duration of prison sentences.

          I guess it comes down to more than what happens within prison and broader issues with social and social s

        • > what I do know is that based on those rates of recidivism, merely punishing criminals isn't work to disincentivize criminal activity

          Correct: https://www.ojp.gov/pdffiles1/... [ojp.gov]

          https://www.nber.org/reporter/... [nber.org]

        • Dude, once a person has been in prison, they are marked forever. At the lowest levels of society, it is no longer possible to live. Homeless encampments are growing at ridiculous rates. At this point, it is kinder to just kill them. But yeah, we can continue grinding people up at ever increasing rates. Ultimately, it is more efficient to just kill them. (so why aren't we doing that? It would cause Social Unrest to just act openly like Hitler did. It is better to just marginalize them in society and let expo

    • take $8 billion and do 8 years in club fed? No you need to do FPMIA time with money laundering

    • Re: (Score:3, Informative)

      by Miram ( 2480128 )

      Save your sympathies for someone deserving! SBF is the opposite of the poor, undeprivleged [etc.]
      His jail sentence is the ONLY thing that will make bankers follow the law.

      Both parents are professors at Stanford Law School, in finance law. His bail was paid by the former dean of Stanford Law School (as well as by his parents and a VC).

      SBF and his conspirators all went to Ivy League schools and previously worked at Jane Street. They know the rules.

      While out on bail, confined to his parents house on Stanford's

    • Still, the long sentence will keep this altruistic douchebag from losing other people's money. Do feel free to be an altruistic douchebag with your own money or the consent of those who's money you're doing so with.

    • The purpose of public trials and punishments is precisely optics and politics. Keep honest people honest and reassure them that bad actors are being removed from society.

      Rehabilitation is perhaps possible in some cases. But in the Hobbesian reality we inhabit (whether we admit it as such or not), laying the smackdown on prolific crooks is necessary.

    • Re: (Score:2)

      by gweihir ( 88907 )

      Well, what do you expect from a system that primarily wants to punish and does not care one bit about reforming those that have failed to follow the law?

    • It would be illegal in New Hampshire where the only allowable purpose of imprisonment is reform (aside from lunatics).

      That's in the 1781 Constitution- nobody gets to say it's not done because it's a new idea.

      Modern people may actually have more blood lust. Certainly prison as rape torture was never tolerated back then.

      I doubt Sam can be reformed or that him in prison would dissuade anyone in the future.

      Maybe he should just be exiled to Australia.

      • Interesting idea. Of course he would not be granted immigration status into Australia due to failing the good character requirements, and that means he'd be staying in the Nauru detention center for the rest of his life. That's a deviously clever suggestion indeed.

    • I read a memoir from a cocaine wholesaler who said that after 20 years in prison it didn't feel like punishment anymore, but just routine normal life.

    • Your comment is missing an important word: "deterrence".

    • I doubt a 50-year prison sentence is going to produce a significantly different result than a 6-year one, either in terms of dissuading would-be copycats or reforming SBF's mindset.

      I agree. That is why I am surprised he is not getting the Death Penalty. 50 years is better than 6 as it protects the public for 50 years. After the end of his sentence, he will try again. Why should we as a society tolerate this? We are willing to kill normal people for far less egregious crimes.

  • The correct sentence seems to be somewhere in the middle, prosecutors too extreme and defense ridiculously lenient.

    • 50 years is one year for every 160 million dollars.

      • Are you saying that I can spend one year in prison and get $160 million?
  • But if you rip off several hundred or even thousand employees by not paying them their wages or by stealing their tips at most you might have to pay back what you owe them, often without interest. And you can forget about jail time for that.

    Honestly I don't see the point of throwing the guy in jail it's not like we can't easily stop him from doing this again. And we have no shortage of studies that show punitive jail time is just a waste of money. I don't see what society at large gets out of tossing his

    • Punishment for his crime? Deterrence?

      • There's no shortage of studies that show inflicting torture using our prison system is not a deterrent.

        As for punishment, punishment for it's own sake is just torture. Ignoring the fact that torture doesn't work, you're saying you're OK with torture.

        Sure, there are limits to how much torture you'll sign off on. But have you ever examined why that is? If you do you'll find it's just squeamishness kicking in. There's no actual objective moral or even practical reason to inflict it. It's feels over rea
        • It's not just about the criminal, it's also about the victims and the rest of society. The victims aren't free to commit an eye for an eye justice, but something like prison or hard labor without pay provides a bit of it. For many years I didn't understand manslaughter in cases where there was a complete accident. It just screwed up the person who caused it. I came to realize it's about those close to the victim.

        • I have no doubt that ridiculous punishments don't help, but how do extrapolate from that to the idea that punishment has zero effect on crime? Can you actually show the study where they gave no one any jail time and crime rates improved??

      • with recidivism rates of about 83%, punishment clearly isn't sufficient to deter future crimes.

        Ref: https://bjs.ojp.gov/library/pu... [ojp.gov]

        • Clearly not, no one claimed that.

          But zero punishment pretty much guarantees 100% recidivism, and far more crime.

          Is this really an argument?

    • What did the Enron perps get? They did a lot of real damage.
      What did the Lehmann Brothers perps get? Some of the investments they floated towards the end only made sense if they knew they were not going to ever come to fruition, they knew things were going to break down. When Lehmann fell apart it started a worldwide recession.

      • Jeff Skilling (Enron CEO/COO) did about 10 years for the Enron fraud. Likewise, Andrew Fastaw (CFO) did about 5 or 10. Ken Lay (Enron chariman) died while under investigation, but seemed very likely to serve something similar.

        Lehman is a trickier story. What did they do that's illegal? Selling rubbish products amd runnig your shop poorly is bad business (they did go bankrupt), but it isn't actually crime? Making lots of money while you customers and employees don't ins't illegal, its just unethical.

    • Re: (Score:2)

      by mspohr ( 589790 )

      Since he has shown no remorse and not taken responsibility, the only way to keep him from doing this again is to have him in jail.
      Maybe he will see the light and rehabilitate himself in jail. If not, he can just stay there.

  • Can we maybe not hear more of this bull before a verdict? That the prosecution thinks he should get the chair and that his lawyers think he shouldn't just be acquitted but actually knighted or at least beatified is a given.

    How about we put a sock in it 'til some judge casts a verdict?

  • 40-50 is insane. And for those arguing the investors lost money, well, investment comes with risk. Not saying that they should get nothing, but if I put 100 dollars in the stock market, there's no guarantee I will make more, nor should their be a guarantee. No doubt he did affect lives and should serve some prison time. The justice system is not about revenge and these comments about 1 year per dollar and other manure is just that, shiite.

    • If you lose money on the stock market, that's a risk you sign up for, yes. But if you lose money on stocks because of fraud, then a crime has been committed. The two things are not equal. That is NOT a risk you sign up for by buying stock.

      Do you really think the penalty for stealing billions, should be the same as the penalty for stealing thousands?

      • As I said that in my comment, investment has risks, and people must acccept that. He did wrong, was found guilty, and I support some jail time. Where we disagree is that penalties aren't about how much money he stole was, it's about rehabilitation, not revenge. The sad fact is, the U.S. has too many people in prison for too long of time. It's this bloodthirst that must end, not his life.

        • No, people should *not* be expected to accept the risk of fraud. Risks that your investment will not make money, or even lose all of it, yes. But fraud, no.

          Yes, the laws of all nations distinguish between small thefts and large ones. If you steal a pencil, the penalty should not be the same as if you steal a car, or a house, or billions of dollars from millions of people.

          Some prisoners can be rehabilitated, but not all. Someone who has spent literally years habitually stealing from innocent victims, is not

          • "No, people should *not* be expected to accept the risk of fraud."

            I agree, and he was rightfully convicted. What I am saying, and you're missing the point of, is that anytime you put money into an investment it has risks. If the risk is determined due to fraud, then the fraudster should be convicted and jailed, as in this case. I'm not defending him. However, all investment has risks. The idea the stocks must always go up leads to different kinds of fraud for investors. Like Boeing, who probabaly cut cos

            • I see you completely avoided the point that stealing a pencil is not stealing a car is not stealing billions from millions. More serious crimes do merit more serious punishment. And yes, I do believe that punishment is an important motive for imprisonment, it's not *just* about rehabilitation.

              • I agree, he should not get 5-10 for stealing a pencil. I didn't know I needed to state that, but I will. I disagree with some dumb assessment of dollar per year.

                • I didn't say a dollar per year, and you know it. The point is that stealing a huge sum of money is not the same as stealing a small sum of money, and that punishments should be progressively more severe when the amounts are enormous.

                  • How severe? Like what is it that you bloodthirsty idiots want? How many years? 500? I mean it's silly he'd spend the rest of his life in prison. You want everyone that commits a crime to have some insanely high prison term for some notion it prevents someone else from doing the same crime, but that is factually incorrect. If you were right, the death penalty would ensure no murders happen, but they still do. Long jail terms are not a deterrent. A few years is what MOST crime should max out for. We should re

                    • Prison (and any kind of legal punishment) has multiple purposes, not just rehabilitation. If rehabilitation were the most important job of prisons, they are doing a terrible job, since 70% of prisoners commit more crimes after they are released. https://scholarworks.wmich.edu... [wmich.edu]). You hit on a few of the purposes of prison, but not all:
                      - punishment
                      - deterrence
                      - rehabilitation
                      - incapacitation (preventing incarcerated persons from committing more crimes)

                      You are correct, punishments don't necessarily deter oth

          • I disagree. I wise investor will realise that when dealing with the sort of postions and the sorts of money we're talking about here, the temptation towards dishonesty on the part of the company management is great. A wise investor will also be aware that frauds have happened often in large businesses across the world. They will therefore assign a certain level of risk in the company they're investing in being subject to fraud by its agents, and plan accordingly.

            The investor will have also factored in the f

            • Oh yes, it's buyer beware, for sure. But that doesn't mean we have to "accept" fraud and "just suck it up and deal with it." The entire purpose of the SEC is to protect investors from fraud. I'm personally glad there is a sheriff in town, even if they don't catch every fraudster.

    • There is a significant difference between putting money and losing it because of market conditions or management and losing it because the management of the firm you invested in stealing it. That difference is the difference between taking a loss and putting the criminals in jail.

  • They said FTX clients would get most of their money back, and that Bankman-Fried did not set out to steal.

    So he still has most of the money despite going bankrupt? How is that not setting out to steal?

  • What did experienced tech investors actually think they were investing in? Sequoia, Greylock, Softbank...these guys are the supposed to the be the smartest money in the entire industry but they were handing billions of dollars to some burnout with absolutely no product.

    When these kinds of companies fund your company, they also take a hand in staffing and oversight. They don't just throw piles of money into the void, they direct capital in a very specific fashion. The actions of FTX after their investment

    • Most FTX customers were regular people, trying to jump in on the crypto craze. They were not--most of them--"experienced" tech investors.

  • I don't care about punishment. I think it's petty. I go by the "would I want them next door?" or "what's the harm of letting them out?" rule. Also, I believe in humane economic confinement and listening to science on recidivism and such.

    Anyway, it will cost a lot of money to incarcerate somebody that long. If he's next door to me, he's not a problem because he wasn't convicted of playing his music too loud. If he's able to participate in finance, that's the real demonstrated potential for harm so I say

    • Your argument is that white collar crime is OK in your neighborhood because it likely doesn't affect you? Wow.

      The flip side of sentencing is that it is meant to act as a deterrent for all of those we don't catch. It doesn't work for impulsive crimes, like murder. But for people who are calculating and commiting crime for greed it can enter into the equation.

      • You didn't actually comprehend what I wrote. The "next door" rule extends to "next office", and "adjacent activities". You should have inferred that from my proposal that they be BARRED FROM THE FINANCE BUSINESS FOR LIFE AND NOT ALLOWED TO LEAVE THE COUNTRY.

        The next door rule is a colloquial way of expressing the idea that incarceration should be based on their odds of causing harm if living outside of bars, not a literal idea that release is only contingent on harm to immediate neighbors.

  • I love people who say it is a victimless crime.. I do not hear people say the same thing about drug users getting locked up. And a Ponzi scheme does not hurt anyone unless people try to cash out :)

    • The victim here is the 1%'s balance sheet. This is a crime on par with treason as far as they are concerned.

    • Ponzi schemes fleece gullible people. We should probably not reward criminals for bringing financial ruin onto gullible but otherwise productive people. Ponzi scheme runners are one of the !any parasites we should excise from society.

      Drug users tend to get involved in a lot of petty crimes. So we could theoretically focus our energies on catching addicts that steal, rob, mug, etc. Since those things are already crimes with a very clear victim.

      Drug dealers of course should be tracked down, caught, and prosec

  • ... expect decades in prison. But if you are stupid enough to rob rich people, their lobbyists and connected friends will throw you in Office Space pound-me-in-the-ass federal prison and throw away the key. Duh!

    SBF was a dufus and a moron enabled by a permissive, entitled culture.

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