Prosecutors: Lock up SBF for up to 50 years

U.S. prosecutors are asking the courts to imprison former FTX CEO Sam Bankman-Fried for up to 50 years, according to a memo filed on Friday.

Bankman-Fried, who is set to be sentenced on March 28, should be in prison for 40 to 50 years, according to a memo signed by U.S. Attorney Damian Williams in the U.S District Court for the Southern District of New York. 

"With all the advantages conferred by a comfortable upbringing, an MIT education, a prestigious start to his career in finance, and a worthy idea for a startup business, Bankman-Fried could have pursued the rewarding, productive, and altruistic life he has sketched out in his sentencing submission," prosecutors said. "But instead, 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. And even now Bankman-Fried refuses to admit what he did was wrong." 

According to a February court filing, Bankman-Fried's lawyers asked for the former executive's prison sentence to be between 63 and 78 months. Last month, Bankman-Fried's family members wrote to the court about concerns they had about their son being in prison. 

Bankman-Fried was found guilty in November by a jury in New York of all seven criminal counts of defrauding the customers, lenders and investors of FTX.

Prosecutors say Bankman-Fried orchestrated "likely the largest fraud in the last decade." The former CEO understood the rules, but decided they didn't apply to him, prosecutors said in the memo.    

"The scope, duration, nature, and sheer number of Bankman-Fried’s crimes, the resulting harm they have caused, the willful disregard of the rule of law, and the absence of countervailing mitigating circumstances render him exceptionally deserving of a sentence that is sufficiently severe to provide justice for the defendant’s crimes and to dissuade others from committing similar crimes, and that will permit the defendant to return to liberty only after society can be assured that he will not have the opportunity to turn back to fraud and deceit," they said in the memo. 

While FTX's attorneys contend that victims will eventually be made whole, prosecutors argued in the memo that none have received reimbursement yet.

"The defendant’s argument relies on speculation that every victim may someday be made whole through the bankruptcy. But that is not a certainty, and the defendant has not cited any authority for the proposition that the enhancement under Section 2B1.1(b)(2) does not apply when victims may someday be reimbursed," they wrote.

A new start? 

Prosecutors also told the court that Bankman-Fried could decide to start a new crypto exchange, and had "mused" about relaunching an exchange called "Archangel LTD." 

Bankman-Fried weighed different ways to restore his image, like “focus on the fact that the Chapter 11 team has no idea how to run FTX" and is “run by a cartel of lawyers,” “come out as extremely pro crypto, pro freedom,” “go on Tucker Carlsen [sic], come out as a republican,” “have Michael Lewis interview me,” “radical honesty on Twitter,” or some other narrative like “SBF died for our sins," prosecutors said citing one of Bankman-Fried's Google documents submitted as evidence. 

The government's memo also included messages Bankman-Fried received from victims, including from a single mother who said she lost her life savings and another victim who said he and his family left Ukraine during the war and had sent his savings to FTX. 

Bankman-Fried ultimately "never owned up to what he did," prosecutors said. 

"He has lied, obfuscated, feigned apology, and tried to minimize his own involvement. Through all of that, the lack of contrition is galling," they said in the memo. "In assessing the seriousness of the offense, the Court should weigh heavily the fact that the defendant has never accepted responsibility, and that too warrants a very significant sentence."

Comparisons to Madoff

Bankman-Fried's sentencing should be between 40 to 50 years, in part because his crimes "were serious and long-running" and caused billions of dollars in harm to victims both financially and emotionally, prosecutors said. Bankman-Fried also did not stop committing crimes after he was arrested, prosecutors said, which adds cause to a more severe sentence. 

Prosecutors also compared the case to Ponzi scheme mastermind Bernie Madoff, who was sentenced to 150 years and died in April 2021 after serving a dozen years, and emphasized that they were not asking the court for a life sentence. 

"Here, as in Madoff and many other cases, the defendant misappropriated funds from his victims and put large amounts of the money into assets such as real estate, stock in publicly traded companies, and other more illiquid assets for his own benefit," prosecutors wrote. "Many of those assets are recoverable, and can be liquidated to repay his victims, but that is due to the extensive efforts of the administrators of the bankruptcy proceeding and due to this prosecution, and these recoveries do not affect the appropriate measure of loss for sentencing purposes." 

Updated at 4:40 p.m. ET to include details throughout