Sam Bankman-Fried Asks for 6.5 Year Prison Term After Conviction in FTX Collapse

• Sam Bankman-Fried’s attorneys requested a prison term of no more than 6.5 years for the FTX founder, who was convicted on seven different fraud and conspiracy charges last November.
• A Presentence Investigation Report recommended a prison term of 100 years.

Former FTX boss Sam Bankman-Fried (SBF), found guilty of fraud last year and due to be sentenced next month, has asked the court for a “just” sentence of 63 to 78 months, according to a court filing submitted Tuesday.

Bankman-Fried’s lawyers objected to the Presentence Investigation Report (PSR), which recommends a sentence of 100 years in prison, calling it “grotesque.” Bankman-Fried was convicted on seven charges of fraud and conspiracy last November after a month-long trial probing the 2022 collapse of FTX.

“Sam is a 31-year-old, first-time, non-violent offender, who was joined in the conduct at issue by at least four other culpable individuals, in a matter where victims are poised to recover—were always poised to recover—a hundred cents on the dollar,” said the filing, which was signed by Bankman-Fried’s new attorneys Marc Mukasey and Torrey Young.

The lawyers argue that “an appropriate method of arriving at a just sentence” would be to consider an adjusted offense level based on “zero loss,” which would lead to “an advisory Guidelines range of 63-78 months.” The filing heavily draws on how “the harm to customers, lenders, and investors is zero” because the FTX bankruptcy estate has stated it expects to fully repay its customers.

In some cases, restitution paid to victims can be considered when sentencing, resulting in shorter terms than guidelines suggest for white-collar cases, CoinDesk has previously reported.

Read all of CoinDesk’s coverage on Sam Bankman-Fried’s trial here.

The attorneys argued that FTX and FTX.US were solvent when the companies filed for bankruptcy, noting that FTX’s bankruptcy estate claims it has north of $10 billion in assets, as opposed to the exchange’s $8 billion hole.

When all factors are considered, the lawyers said, “Including 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.”

Bankman-Fried’s lawyers argue that while he has been described as a “sociopath,” “an ice-cold manipulator, bully and shameless liar,” and “one of history’s most notorious fraudsters, those people don’t know the true Sam Bankman-Fried.”

“Those who know Sam see someone who ‘cares deeply about other people.’ Who exhibits ‘kindness and loyalty.’ Whose ‘heart [is] in the right place.’ Someone who ‘has always been dedicated to doing good in the world.’” the filing said.

Family and friends

Bankman-Fried’s sentencing memo included letters of support from his friends and family, including his parents, Joe Bankman and Barbara Fried; his brother Gabriel Bankman-Fried; former FTX in-house psychiatrist George Lerner; former FTX Head of Communications and executive assistant Natalie Tien; former FTX.US Head of Data Science Daniel Chapsky; someone who said they were an FTX victim; childhood friends; Stanford officials; and over a dozen others.

Notably, Bankman-Fried’s fellow inmate and former New York Police Department officer, Carmine Simpson, wrote a letter that brought attention to extortion attempts.

“Sam being the least physically intimidating person … has and will lead to him being frequently targeted for hazing, harassment, and assault more so than the average inmate,” the letter said. In addition, Simpson said that the extensive media coverage of Bankman-Fried’s case and his erstwhile net worth has “[led] to multiple extortion attempts.”

Another letter was submitted by Jamie Forrest, an adviser to Purpose Africa, a research entity focused on therapeutics.

Forrest was part of the group of researchers invited by Bankman-Fried to the Bahamas in early 2022. He wrote that Bankman-Fried’s vision reflected a “man whose values were deeply rooted in global justice, fairness, and human dignity.”

A clinical psychiatrist, Hassan Minhas, wrote that he believed Bankman-Fried met the criteria for Autism Spectrum Disorder, which means he could “face an additional set of challenges” in prison and, therefore, “would benefit from ongoing access” to therapy and monitoring.

Other supporting documents included snippets of Bankman-Fried’s writings, emails and other communications from FTX and its employees and various documents from the exchange’s bankruptcy.

“The letters of support confirm that the public needs no protection from Sam,” the lawyers argued. “Sam, in short, presents the very opposite of the potential recidivist for whom prison is necessary.”

Enhancements

Bankman-Fried’s attorneys pushed back against various “enhancements” – aspects that might add to a proposed prison term – recommended in the Presentence Investigation Report, saying they were inapplicable or unsupported.

Some of the memo argues against details discussed during or before Bankman-Fried’s trial. Bankman-Fried drove “the most basic car that was available,” the memo said (former Alameda Research CEO Caroline Ellison testified that this was a deliberate choice made for appearances’ sake).

Campaign finance claims – which ultimately were not tried as a specific charge – should not be considered in sentencing, as the memo said Bankman-Fried did not have a chance to push back against the allegations.

The memo also said Bankman-Fried “objects to the assertion that he ‘instructed employees to set messages to auto-delete to evade law enforcement scrutiny,’ and that he ‘tampered’ with witnesses.”

The FTX founder’s bond was revoked after Judge Kaplan ruled he had indeed attempted to tamper with witnesses – Ellison being one – a few months before his trial last year. Prosecutors also focused heavily on the auto-deleting message function during the trial.

According to Tuesday’s memo, the Presentence Investigation Report alleges Bankman-Fried perjured himself during the trial.

“Neither the government nor Probation identifies a single specific line of alleged perjurious testimony, which is enough to reject this enhancement,” the filing said.

The memo goes on to detail Bankman-Fried’s life, his philanthropy, his work ethic and his remorse.

It also drew contrasts between Bankman-Fried and Bernie Madoff, OneCoin-linked Sebastian Karl Greenwood and Theranos founder Elizabeth Holmes, arguing that the FTX founder’s conviction most closely resembled Holmes’ – except Holmes “put patients at risk.”

According to the defense team, “the best comparison” would be the case against Michael Milken, who served two years of a 10-year sentence and “became a tremendous force for good in the world.”

Read More: Sam Bankman-Fried’s Sentence Might Be Lighter Than You’d Expect

UPDATE (Feb. 28, 2024, 07:04 UTC): Adds additional detail.

UPDATE (Feb. 28, 2024, 08:30 UTC): Adds details from letter from Bankman-Fried’s family and friends.