By
Bhushan Akolkar
April 26th, 2024
They assert that if the government truly believes in his potential for rehabilitation, a significant reduction to 63–78 months from the suggested guidelines is fair enough.
In the ongoing case around the collapse of FTX, the government has submitted a sentencing memorandum to Sam Bankman-Fried, the former CEO of the now-bankrupt cryptocurrency exchange. His defense team contends the sentencing memorandum portrays Bankman-Fried as a malicious villain deserving of a life sentence. They argue that this portrayal is a distortion of reality, unfairly vilifying their client and ignoring mitigating factors, clarifying the memorandum as disturbing.
Sam, who was convicted of fraud and money laundering in November 2023, was found guilty of all seven charges in the FTX fraud trial, prompting the prosecutor’s counsel to ask for fifty to sixty years of imprisonment.
In response to the government’s sentencing proposal released on March 15, one of the central arguments put forth by the defense is that the bankruptcy process will ultimately compensate customers and lenders, meaning there are no actual losses as the funds remain available for reimbursement. They mentioned Alameda’s payments to FTX before the bankruptcy as evidence of Bankman-Fried’s good-faith efforts to process withdrawals.
Rejecting the government’s complaints about payment delays and Sam’s lack of assistance, the lawyers asserted that he faced rejection in his attempts to help identify value in FTX. The legal team points to discussions with the US Department of Justice and other agencies as contributing factors to the delay. In the document released, they stated:
“Delay surely would have been reduced if Sam had not been rebuffed in his repeated efforts to assist with identifying “meaningful value” in FTX.”
Allegations of greed and a desire to maximize personal wealth are vehemently refuted by the lawyers. They argue that witnesses at the trial never mentioned greed, and those who know Bankman-Fried testify to his selflessness. The defense team claims the government has confused corporate growth with personal greed, overlooking the fact that Bankman-Fried rented only a portion of an apartment and had standard corporate sponsorships.
In a counterargument about the possibility of the former FTX CEO re-offending, his legal team dismissed the talk, insisting that their client is a first-time offender with no criminal history, therefore he is least likely to re-offend. Additionally, they argue that his college education reduces the likelihood of recidivism, suggesting that long sentences are not always necessary to deter white-collar crime. Sam’s lawyers Marc Mukasey and Torrey Young wrote in the file released
“[L]ong sentences often are not required to deter recidivism among business fraud offenders. White-collar offenders … often become involved in illegal conduct as a result of their position within a legitimate enterprise or in the context of a legitimate financial relationship with others”
Unsupported Claims by the Government and Plea for Leniency
The defense team accuses the government of making unsupported and exaggerated claims, including their comparison of sentence lengths for cases involving significant losses. They argue that the government’s chart of “comparable defendants” is flawed and includes cases that significantly differ from Bankman-Fried’s situation. Furthermore, they assert that his statements demonstrate his accountability and dedication to serving customers, refuting accusations of evading blame.
Ultimately, the lawyers plead for leniency, arguing that Bankman-Fried has already lost almost everything and everyone. They assert that if the government truly believes in his potential for rehabilitation, a significant reduction to 63–78 months from the suggested guidelines is fair enough.