Former FTX CEO Sam Bankman-Fried faces seven counts of conspiracy and fraud in the latest indictment against him brought by U.S. prosecutors that alleges he used stolen customer funds to spend over $100 million for political contributions.
To conceal the source of the funds used for the donations, some of those political contributions were made in the names of FTX executives, the Justice Department said in a superseding indictment filed on Monday.
“To conceal the fact that the Alameda account containing FTX customer deposits was a source of the donations, Bankman-Fried directed that money from the Alameda account be wired to these executives' personal bank accounts, and that these executives then make donations in their own names,” according to the indictment.
By doing so, Bankman-Fried was able to evade restrictions and “maximize FTX’s political influence,” prosecutors said.
“He leveraged this influence, in turn, to lobby Congress and regulatory agencies to support legislation and regulation he believed would make it easier for FTX to continue to accept customer deposits and grow, which would, in turn, allow the misappropriation scheme to continue,” prosecutors said.
The Justice Department said last week that it planned to file the superseding indictment to include arguments that Bankman-Fried conducted an “illegal campaign finance scheme.”
Bankman-Fried detained last week
Before his fall, Bankman-Fried was seen by some as the “darling” of crypto and participated in hearings in front of lawmakers as well as sat at regulators’ roundtable meetings.
Then in quick succession, it all unraveled and FTX filed for bankruptcy late last year.
Bankman-Fried on Friday was remanded into the custody of the U.S. Marshal and sent to jail to await trial after a federal judge decided to revoke his bail.
Prosecutors had asked the judge for the detention shortly after the Justice Department accused him of leaking the private diary of a former colleague and ex-girlfriend, Caroline Ellison, to The New York Times.
Disclaimer: The former CEO and majority shareholder of The Block has disclosed a series of loans from former FTX and Alameda founder Sam Bankman-Fried.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.