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By Luc Cohen
NEW YORK (Reuters) -Sam Bankman-Fried’s lawyer urged a decide on Tuesday to impose a lenient sentence for the FTX founder’s conviction for stealing $8 billion from clients of the now-bankrupt cryptocurrency trade, arguing purchasers would get most of their funds again.
In a sentencing submission, Bankman-Fried’s lawyer Marc Mukasey advised U.S. District Decide Lewis Kaplan {that a} tips vary between 5-1/4 and 6-1/2 years could be an applicable jail time period.
That’s far lower than the utmost sentence of 110 years he faces after a jury discovered him responsible in November on seven counts of fraud and conspiracy, in what prosecutors have known as one of many largest monetary frauds in American historical past.
Bankman-Fried pleaded not responsible and is anticipated to enchantment his conviction and sentence. He acknowledged making errors working FTX, however testified at trial that he by no means supposed to steal buyer funds.
Kaplan is about to condemn the previous billionaire, who turns 32 subsequent week, on March 28.
The lawyer’s submission was accompanied by letters of assist from Bankman-Fried’s mother and father, psychiatrist, and others.
His mother and father, the Stanford legislation professors Joseph Bankman and Barbara Fried, mentioned their son was bored with materials wealth and labored arduous to make clients complete within the month between Bahamas-based FTX’s November 2022 collapse and his arrest on fraud costs a month later.
“Barbara and I…witnessed firsthand his single-minded deal with getting a reimbursement to depositors, lengthy after there was any chance he would be capable to save any of his fairness or wealth,” Bankman wrote.
Mukasey known as a 100-year tips vary calculated by probation officers “barbaric”, saying it was based mostly partly on a defective assertion that FTX’s clients misplaced billions.
He pointed to the bankrupt firm’s current assertion that it anticipated to repay all clients in full to again up the argument that Bankman-Fried didn’t got down to steal.
“The conviction doesn’t tackle whether or not Sam supposed to pay the cash again. He did,” Mukasey wrote.
The probation officers’ calculation is just not binding on Kaplan. The U.S. Lawyer’s workplace in Manhattan is anticipated to make its personal sentencing suggestion by March 15.
ELIZABETH HOLMES OR MICHAEL MILKEN?
A graduate of the Massachusetts Institute of Expertise, Bankman-Fried rode a growth within the values of digital property corresponding to bitcoin to a internet value Forbes journal as soon as estimated at $26 billion. His fortune evaporated in November 2022, when FTX declared chapter after a wave of buyer withdrawals.
At his month-long trial in Manhattan federal court docket, three former shut associates testified that Bankman-Fried directed them to assist loot FTX buyer funds to plug losses at his Alameda Analysis hedge fund, even whereas presenting himself publicly as a accountable steward within the unstable cryptocurrency market.
Prosecutors mentioned Bankman-Fried additionally used buyer funds to purchase luxurious actual property within the Bahamas and to donate to U.S. politicians who would possibly assist cryptocurrency-friendly rules.
Bankman-Fried testified that he didn’t notice how a lot Alameda owed to FTX till shortly earlier than each failed.
Mukasey acknowledged Bankman-Fried’s case bore some similarities to that of Elizabeth Holmes, one other younger entrepreneur who was sentenced to 11 years in jail in 2022 for defrauding buyers in her now-defunct blood-testing startup Theranos.
However he mentioned Holmes put sufferers in danger, and urged Bankman-Fried had extra in widespread with Michael Milken – a Wall Road financier within the Eighties referred to as the “junk bond king” who was launched from jail after serving simply two years of an preliminary 10-year sentence on fraud costs.
“Given the identical probability, Sam would dedicate his post-prison life to charitable works,” Mukasey wrote.
MOTHER SAYS SHE WOULD CHANGE PLACES
Bankman-Fried has been jailed at Brooklyn’s Metropolitan Detention Middle since August, when Kaplan revoked his bail after discovering that he seemingly tampered with witnesses.
In a letter to Kaplan, Bankman-Fried’s psychiatrist George Lerner wrote that he’s on the autism spectrum. Mukasey wrote that Bankman-Fried struggles to make eye contact and talk with others, which may depart him weak in a jail setting.
Bankman-Fried’s mom wrote that her son had taken duty for the errors that led to FTX’s collapse and was remorseful, however mentioned she feared for his life in jail.
“His father and I face the very actual chance that we’ll not stay lengthy sufficient to see him freed,” Fried wrote. “I might gladly change locations with him if I may.”