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March 28, 2024
Sam Bankman-Fried sentenced to 25 years in federal prison for his FTX frauds
As reported in this Wall Street Journal piece, "FTX founder Sam Bankman-Fried was sentenced Thursday to 25 years in prison for fraud tied to the collapse of his digital exchange, capping his meteoric rise and fall." Here is more:
Less than two years ago, Bankman-Fried was the crypto king. The moptop millennial hobnobbed with heads of state, soaked up Caribbean views from his $30 million penthouse and vowed to use his wealth to better humanity.
Last year, a jury found the 32-year-old guilty of stealing billions of dollars from FTX customers and defrauding investors and lenders to his crypto investment firm Alameda Research.
Bankman-Fried, standing with his hands clasped, told the judge before sentencing Thursday that he was haunted every day by what he had thrown away. “I was responsible for FTX, and its collapse is on me,” he said during a 20-minute statement. A lot of people were let down, he said, adding, “I’m sorry about that.”
Federal prosecutors said Bankman-Fried committed one of the greatest financial frauds in U.S. history. Fueled by greed and hubris, he used other people’s money to fund his lavish lifestyle, make risky investments and pursue his political agenda, according to prosecutors. Prosecutors asked U.S. District Judge Lewis Kaplan to sentence Bankman-Fried to 40 to 50 years in prison. Without a lengthy sentence, Bankman-Fried could commit more crimes, Assistant U.S. Attorney Nicolas Roos told the court. “If Mr. Bankman-Fried thought that mathematics would justify it, he would do it again,” Roos said.
Bankman-Fried’s lawyers argued a sentence of no more than six years in prison was more appropriate, saying he still had much to offer to society. They pointed to his autism, his deep remorse and his charitable works as reasons for a lenient sentence. Marc Mukasey, his lawyer, told the judge that Bankman-Fried wasn’t a “ruthless financial serial killer” who sought to hurt people. “Sam Bankman-Fried does not make decisions with malice in his heart,” said Mukasey. “He makes decisions with math in his head.”...
During a monthlong trial in the fall, jurors heard testimony from three of Bankman-Fried’s top lieutenants, including his ex-girlfriend, who said the FTX founder directed them to commit crimes alongside him. Bankman-Fried took the unusual step of testifying in his own defense. He told jurors that he never committed fraud, yet he struggled under cross examination, saying dozens of times that he didn’t recall specifics.
Kaplan said Thursday that Bankman-Fried committed perjury during his testimony, including when he told jurors that until fall 2022, he had no knowledge that Alameda had spent FTX customer deposits.
In the weeks before the sentencing, Bankman-Fried’s supporters wrote letters to the judge, saying that his struggles with depression, autism and anhedonia — the inability to feel happiness — weigh in favor of a lighter sentence....
Kaplan said Thursday that in determining the sentence, he wasn’t weighing whether customers would get their money back. “A thief who takes his loot to Las Vegas and successfully bets the stolen money is not entitled to a discount on the sentence,” the judge said.
Prior related posts (in some of which I set the over/under at 25 years):
- You be the judge: what federal sentence for Sam Bankman-Fried after guilty verdict on seven criminal fraud counts?
- Some early chatter and speculation about Sam Bankman-Fried's coming federal sentencing
- Should a bounce in crypto markets mean a much lower federal sentence for Sam Bankman-Fried?
- Lawyers for Sam Bankman-Fried in lengthy memo request "a sentence that returns Sam promptly to a productive role in society"
- Some notable developments and commentary on Sam Bankman-Fried's coming sentencing
- Feds argue in sentencing memo that "legitimate purposes of punishment require a sentence of 40 to 50 years’ imprisonment" for Sam Bankman-Fried
- Rounding up a few sentencing speculations a few days before Sam Bankman-Fried's sentencing
March 28, 2024 at 12:00 PM | Permalink
Comments
Although Judge Kaplan's words were harsh towards SBF, his ultimate sentence of 25 years was kind and generous. I had long felt that SBF would get 40 to 50 years in prison. Despite the length of his sentence, SBF will probably be sent by the Bureau of Prisons to a Low Security Prison. Because his sentence far exceeds the 10-year threshold for going to a BOP Camp, he will have to be sent to the next higher level. If he has any disciplinary p[roblems at the Low Security Prison, he would be moved up to an FCI (Medium Security) prison. He will survive this, but will probably get bored in prison, even if he works as a GED tutor or a law librarian (writ writer).
Posted by: Jim Gormley | Mar 28, 2024 12:10:22 PM
I have to hand it to Doug for his "25 year" over/under. Over and under were both wrong!
Posted by: William Jockusch | Mar 28, 2024 12:21:46 PM
Weak.
Posted by: federalist | Mar 28, 2024 1:00:14 PM
Doesn't the house win all bets, William, when the betting event hits the spread/over-under on the nose? If only I accepted bets!
Posted by: Doug B | Mar 28, 2024 1:43:51 PM
Federalist, honestly what is wrong with your outlook on punishment? 25 years is just not enough? This guy is 33 and will be 55 years old when he gets out of prison, with good time. He is talented young guy, and it is kind of a waste to have him locked up for more than say 10 years. That is quite enough time to punish him and send a message. I often wonder about our sentencing system. It seems much more about vengeance than any rational purpose. The whole thing is really sad, and it is pretty outrageous for the likes of you and Bill Otis to call for even more.
Posted by: Mark | Mar 28, 2024 1:56:56 PM
Mark - I agree with your outlook. Imprisonment should only be used as a last resort and only then for as short a time as possible. Brett Miler
Posted by: Brett Miler | Mar 28, 2024 2:06:20 PM
Mark, he had numerous victims, and he hurt them severely. How much time per victim?
He was a megalomaniac. A do-gooder who acted like the ends justified the means. Profoundly evil.
Posted by: federalist | Mar 28, 2024 2:32:28 PM
Federalist,
I appreciate your point, but you don't explain why 25 years is not enough even for the "profoundly evil." Just what purpose is served by the marginal years for say a 50-year sentence. You punitive types never, ever explain that. Frankly, it's even for a murder conviction. Unless someone is truly dangerous, what does society gain by LWOP or huge terms of year sentences. Most of our peer countries seem to do just fine with LWOP or similar sentences. Why are we different? I think it's a combination of vengeance and non-experts, who are driven by pandering to the uninformed masses, having too much power over sentencing policy.
Posted by: Mark | Mar 28, 2024 2:44:42 PM
Mark stated: “ I think it's a combination of vengeance and non-experts, who are driven by pandering to the uninformed masses, having too much power over sentencing policy.”
I believe Mark just illustrated while Trump is likely to win. The enlightened few like Mark “get it,” but are being held back by the damned “uninformed masses.” He would probably even claim how pro-democracy he is.
First, the uninformed masses believe that the punishment should fit the crime. A bunch of people lost their economic independence because of him.
Second, it’s a question of fairness, to use Obama’s word. Why should this stone hearted thief be able to get out and enjoy any proceeds from his thievery that he may have squirreled away? Absent that, begin a second time, get rich, and live well when he impoverished people?
Third, it tells future SBF clones, don’t do it. It will end badly.
Posted by: TarlsQtr | Mar 28, 2024 3:21:48 PM
Mark, I don't want people to even think about being a large-scale swindler like this. A sentence of 50 years would send a message--a message that needs to be sent. If you added up all the harm that he has caused, it probably adds up to a murder.
I am far from uninformed. I think honestly, Mark, you dress up squeamishness as morality. SBF ruined lives--shouldn't his, effectively, be ruined?
Posted by: federalist | Mar 28, 2024 4:06:27 PM
I side with Mark. Vengeance and love for punishment drive the US criminal justice. Speaking of mathematics, the length of a sentence, just as any other function, should be determined by the maximum impact on the defendant's likelihood to commit the crime again and how likely such a sentence would deter others from committing similar crimes. At some point on the curve, increasing the length of a sentence does not lead to an increase in either. It does make people who enjoy punishment for punishment's sake happier, but personally, I do not see that as a valid reason.
The "Punishment as Placebo" article that was featured recently on this blog offers some arguments for why, in spite of the lack of data and analysis, the American justice system continues to rely on incarceration and lengthy sentences as the treatment of all societal ills:
"A medical placebo treatment may be physiologically inert, but it still can have a positive psychological and therapeutic impact by making the patient feel better because they think they are receiving effective treatment. In the same way, the cultural value of mass incarceration extends beyond its failed effectiveness by providing psychological and therapeutic value to help the public cope with their fear of crime, their moral commitments to justice, and their socialized feelings towards offenders."
Posted by: Anon | Mar 28, 2024 4:16:38 PM
Anon,
“ Speaking of mathematics, the length of a sentence, just as any other function, should be determined by the maximum impact on the defendant's likelihood to commit the crime again…”
So, if we can show he’d never do it again, let him walk?
Posted by: TarlsQtr | Mar 28, 2024 5:04:44 PM
TarlsQtr, I doubt that in this case, it would be zero years in prison. We don't know, though, what it would be because nobody has ever tried to actually collect the data and come up with sentencing rules based on science. Do you know of any attempts to do that? You, I, and anyone else can guess and argue endlessly until we actually do some dispassionate academic research rather than throw our emotions around the issue.
But if proper analysis shows that a particular case derives zero benefit to society from a prison sentence, then use other forms of punishment that actually do so. Have the defendant do community service or whatever else benefits society: pick up trash on highways, tutor disadvantaged kids, etc. Forbid them from ever taking part in a profession or circumstance that will allow them to repeat the crime.
Posted by: Anon | Mar 28, 2024 5:34:18 PM
Anon--deterrence. Plus, people like you don't understand that justice is also about retribution. Because if we don't have that, then people will take the law into their own hands.
Posted by: federalist | Mar 28, 2024 5:40:19 PM
Federalist, yes, deterrence should be part of the analysis, and retribution should be accounted for when deciding on a sentence. See, I agree with you. I invite you to see my side of the argument. Our opinions are not mutually exclusive. Please consider punishment options other than incarceration—not necessarily as a replacement, but as additional options. The satisfaction of watching someone who hurt someone else suffer feels good, but making them do something that actually benefits that person and others is a more civilized and beneficial approach.
Posted by: Anon | Mar 28, 2024 5:49:33 PM
Federalist,
I'm not positive I know what squeamishness has to do with this debate. If your criticism is that people who advocate for 15-25 years for Bankman, rather than 50, get squeamish at the notion of condemning a 33-year-old extremely bright guy with a lot to offer to to prison until he's 80 rather than about 50, I plead guilty to have a sense of decency and humanity. And you really think the next guy who contemplates do what Bankman did will be deterred by 50 years but not 15-25, that is really a complete failure to grasp anything about diminishing returns. I really think your way of thinking has serious ethical issues or reflects some kind idiotic Trumpian populism that should be beneath your dignity. You are obviously a smart guy. Please opine accordingly.
Posted by: Mark | Mar 28, 2024 7:21:28 PM
Maark,
FWIW, I admit to lacking both a sense of humanity as well as any empathy for problems people create for themselves. I would much rather we simply execute people like Mr. Bankman-Fried. (Actually, my threshold for that is far lower, in the range of the theft of a couple hundred dollars).
Barring that, yes, I would very much prefer that he sit in prison until he is of an age where any further offense is of no possible concern.
Posted by: Soronel Haetir | Mar 29, 2024 2:44:35 AM
Mark, when you show half the emnity to the subhumans that made the decision to release this guy (see link below) as you do with people like me who think that the punishment should fit the crime, then maybe I'll care about your opinion. SBF ruined people's lives--putatively to serve some "save the world" megalomaniac goal (while preserving a nice lifestyle for himself, of course). The idea that he should have some semblance of a life after leaving so much wreckage is distasteful.
https://redstate.com/bobhoge/2024/03/28/illinois-convict-released-early-murders-11-year-old-boy-state-sen-disgusted-by-pritzker-parole-board-n2172058
Posted by: federalist | Mar 29, 2024 9:21:38 AM
Federalist,
You seem to be a very simplistic thinker with a bent towards the visceral. That a prisoner was paroled who winds up committing an atrocious crime thereafter is an anecdote not data and means nothing. If we don't see an occasional terrible result from a decision to release a prisoner society, if of course, paroling a sub-optimal number of prisoners. Put differently, in a stylized fashion, is society better off not paroling anyone convicted of murder than paroling 10,000, with 9,999 going on to live productive lives and one committing a horrible murder post-release. The debate, as distorted by politicians trying to pander, is the height of idiocy. IF only this guy had not been paroled, this kid would still be alive, so let's blame the parole board for what might have been a correct decision ex ante and never parole another murder. Insofar as arguments like this one, which you seem implicitly to support with your citation to a Red State article (really?), gain traction with the populace, it really makes one wonder about the IQ of the citizenry. You seem to be an intelligent guy, but some of your arguments are just moronic.
Posted by: Mark | Mar 29, 2024 11:28:56 AM
Some things, Mark, are very simple. SBF ruined a ton of lives. Because you're f'in star-struck because he purportedly has so much to give society you throw retribution, deterrence out the window and rail against those who think, quite simply, that hey, he ruined a lot of lives, he needs to have his ruined too because anything less wouldn't be justice. SBF woke up every day thinking how he'd keep screwing people. Did he ever think to stop? If he did, he didn't act on it.
People like you think nothing of taking enormous risks with the lives of the innocent with your "enlightened" view of criminal justice. Look at a guy like Komisarjevsky--had a record of repeatedly breaking into people's homes while the occupants were actually there. Then he went on to destroy a family. These aren't anecdotes, they are real people who have been harmed.
Regarding visceral response--yeah, when an 11 year old boy dies defending his mom, I react viscerally to the morons who let the guy out. I don't look at that guy and SBF all that much differently.
Posted by: federalist | Mar 29, 2024 1:14:26 PM
Federalist,
You have not answered the question: what purpose is served by 50 years rather than 25. 25 years is about half an adult. My god, you just say BS with no rational analysis. What kind of world do we live in when you and Bill Otis and those of similar ilk think 25 years is a slap on the wrist? Do you have any ability to reflect before you opine?
Posted by: Mark | Mar 29, 2024 1:23:11 PM
Hooray for Mark’s perspective!!
Posted by: Brett Miler | Mar 29, 2024 1:28:43 PM
Yes. I am with Mark. I’m sorry to say it, but it’s pretty simple: Federalist displays a lack of morality, ethics, and, frankly humanity. He calls anyone who differs on his draconian views “squeamish” and posts Red State articles — Federalist do you know you are taking from an antiSemitic website -/about some irrelevant incident in Illinois that has nothing to do with any of this. It’s pretty sad that guys like him spout forth on real policy issues, but that is tge Internet for you.
Posted by: Aaron | Mar 29, 2024 1:39:14 PM
I thought I was clear--retribution and justice. SBF, for years, ruined people's lives. Did he ever think to stop what he was doing? What is his sentence, per victim? That's the purpose. He gets out in around 20 years--he'll be what, 53? Still able to rebuild his life etc. etc. How is that justice for families that had everything stolen from. I've worked hard my entire f'in life, and I want to give to my kids so that they don't have to work as hard as I have. SBF deserves not to have that chance, as he's taken it away from many others.
I didn't say that 25 years was a slap on the wrist, but on a per victim basis, it's weak. He should get out, if at all, an old man.
Is the heady feeling of moral superiority really that important to you? And look at the sentencing--did he learn his lesson? No, he tried to get lenience by stressing what a do-gooder he was. Ugh.
Posted by: federalist | Mar 29, 2024 1:39:20 PM
As far as what SBF *should* have gotten, I arrive at a lower figure by some comparative reasoning. I compare him to Jeff Skilling (who ended up serving 12 years with good time reductions) and Bernie Ebbers (who got 25 years and was released only as he was about to die). Another comparison is Elizabeth Holmes, who somehow escaped with only 11 years for Theranos. I think SBF is slightly more culpable than Skilling due to SBF's top-of-the-organization leadership role. SBF and Bernie Ebbers (WorldCom) probably have similar levels of culpability. Ebbers also got 25 years.
By comparison with Skilling, SBF should have slightly more time because SBF was the #1 person in his fraud. Perhaps 16 or 18 years. By comparison with Ebbers, probably about the same amount of time. So that comparison leads us to 25 years. By comparison with Holmes, SBF was far less culpable because Holmes was lying to people about blood tests, which takes the crime to a whole new level. By that comparison, Holmes was way under-sentenced, and SBF would need less than 11 years to have it make sense.
Putting it all together, I would see 16-18 years or so as fair. But that's just me. I don't agree with people attacking each other for having different perspectives. This is a difficult question, and reasonable people can differ.
Posted by: William Jockusch | Mar 29, 2024 2:10:51 PM
William Jockusch --
"I don't agree with people attacking each other for having different perspectives. This is a difficult question, and reasonable people can differ."
Nailed it.
Whenever I see someone proclaim himself The Spokesman For Morality, Ethics, and, Humanity, and lambaste those with an opposing view as nativist and inferentially anti-Semitic, and a "sad" example of unthinking emotion, it's time to tune out the "debate," because it's not really a debate. It's just breast-beating.
Sentencing, in this case or any other, inescapably (and properly) has a component of moral judgment, and thus is certain to arouse feelings. It cannot be and never has been done solely by recourse to science, whatever in specific terms that might mean.
Posted by: Bill Otis | Mar 29, 2024 3:28:35 PM
I think Bill makes a fair point, and I probably get carried away at times. I just feel strongly that people convicted of crimes are humans, and society acts with its better nature when it shows some forbearance. A person can do horrible things in his or her early thirties and be a much different person in his or her fifties. I feel that those advocating for 50 years for SBF sometimes forget that. I also feel like there is sometimes too much focus on victims. Extraordinary punishment for the perpetrator does not bring anyone's money back or a family member in a murder case. Those, to be frank, are sunk costs. There are many victims who grasp that, and do not ask the courts to throw away the keys for even a murderer of their family member. Those folks demonstrate the best human qualities, and I feel like other victims or victims' families would do well to emulate them. We seem to be particularly bad at dealing with these issues in this country relative to many others, perhaps based on a spirit of vindictiveness that is all too common here (witness Trumpism).
Posted by: Mark | Mar 29, 2024 5:10:02 PM
Mark,
All people are humans, I just don't see that earning them any special consideration. We can get more humans easily enough, in fact probably too easily. We should cater to people who don't wish to live in law-abiding societies by removing their need to do so.
Posted by: Soronel Haetir | Mar 29, 2024 5:21:44 PM
For those who think 25 years is enough, what do you think would have been appropriate for a version of SBF who promptly pled guilty, showed remorse, didn't tamper with witnesses, and didn't perjure himself?
I think 25 is about right for that version. But if you think the discount for plea should be about 25-33 percent, you get 33 to 37 years for conviction after trial. And that's before you tack on for the tampering and perjury, or consider the lack of remorse.
Posted by: Jason | Mar 29, 2024 8:47:42 PM
Jason,
That is an interesting way of looking at it. But might the sentence have been 10-15 years if he pled and been cooperative? One question: In normal circumstances, a very high percentage of defendants plead guilty. Does anyone have a theory on why people like SBF or Elizabeth Holmes very often seem to go to trial with near hopeless cases. I'm sure they are being well advised and probably told they should take a plea, like SBF's girlfriend. Is it that these types of people are very obstinate and will not listen to that kind of advice? Seems like an interesting subject for insight, but I have never heard an explanation. Clearly, SBF would have been in a much better position if he had not perjured himself and attempted to tamper with witnesses.
Posted by: Mark | Mar 29, 2024 9:41:43 PM
Mark --
"I'm sure they are being well advised and probably told they should take a plea, like SBF's girlfriend. Is it that these types of people are very obstinate and will not listen to that kind of advice?"
My experience is that they are incapable at a pretty deep level of believing they did anything wrong. The extent of their capacity for self-justification is beyond what most normal people experience. Anything they did was either innocent deep down, or, if wrong, was someone else's fault.
This is not entirely atypical for how criminals think. I did a lot of cases involving theft or fraud of one kind or another, and not once did I hear a defendant say, "I did it because I'm greedy and didn't feel like I should need to get a crappy job like everyone else" -- which was the actual reason for their stealing. With people like SBF and Ms. Holmes, it was that sort of thinking squared.
Posted by: Bill Otis | Mar 29, 2024 11:36:13 PM
"they are incapable at a pretty deep level of believing they did anything wrong. The extent of their capacity for self-justification is beyond what most normal people experience. Anything they did was either innocent deep down, or, if wrong, was someone else's fault."
Hear, hear, Bill. People who think and talk like that should be behind bars. They're not fit to lead companies or anything else. We've gotta get that attitude under control or our country is doomed.
That's why now more than ever it is crucial for us to Stop the Steal.
Dictator on Day One! MAGA
Posted by: MAGA 2024 | Mar 31, 2024 7:39:09 PM
There are times I miss the ol' Supremacy Clause.
Posted by: Soronel Haetir | Mar 31, 2024 10:36:06 PM
"Those, to be frank, are sunk costs. There are many victims who grasp that, and do not ask the courts to throw away the keys for even a murderer of their family member. Those folks demonstrate the best human qualities, and I feel like other victims or victims' families would do well to emulate them. We seem to be particularly bad at dealing with these issues in this country relative to many others, perhaps based on a spirit of vindictiveness that is all too common here (witness Trumpism)."
Mark, please keep saying things like this. You're a lost cause. But these sort of statements serve to bring people over to my view. And if someone murders a member of my family member, I will be calling for the key to be thrown away. SBF deserves not to have a chance at a decent life.
Posted by: federalist | Apr 1, 2024 11:27:35 AM
Federalist,
What is your problem with Mark's articulation? It seems to me to be well reasoned, sincere, and thought provoking. Why would it necessarily bring anyone over to your views?
Posted by: Aaron | Apr 1, 2024 1:34:34 PM
Referring to someone's death as a "sunk cost" as being justification to be nice to the killer for starters. And this idea that people who want their child's killer to be locked up for good as somehow less moral than the people who empathize with their child's killer. Orwell had a lot to say about people like Mark.
Posted by: federalist | Apr 1, 2024 1:41:06 PM
@Mark: In my view, 10-15 would have been inadequate for general deterrence and to promote respect for the law. As another of Doug's posts observes, that could be considerably less time to serve.
And although I don't think loss amount should dominate the outcome, it is usually correlated with other factors relevant to culpability. If I'm giving a nominal 10-15 for this, what do I give for a $1B fraud, $100MM, $10M or a $1MM one, that is broadly similiar except for smaller scope? If I think the $10B needs to be several times longer than the $10MM, then 10-15 is maybe pegging me around a nominal 2.5 to 4 years for the latter?
My guess is that SBF's choice to fight against overwhelming evidence speaks to his belief that he is smart enough, devious enough, charismatic enough, whatever to pull the wool over peoples' eyes in almost any circumstances. That does arguably go to future dangerousness, as does Bill's candidate explanation.
Posted by: Jason | Apr 2, 2024 2:32:28 PM
MAGA --
"Hear, hear, Bill. People who think and talk like that should be behind bars."
Just stop. At no point did I say that anyone belongs behind bars for merely how they think and talk. They belong behind bars for stealing gigantic amounts of money, you bet. How long they should stay there depends in part on their attitude, sure. No sensible person would say otherwise.
Just being idiotically sarcastic, MAGA, adds nothing to this discussion.
Posted by: Bill Otis | Apr 2, 2024 7:39:10 PM
