FTX fraud: Only 2 years in prison for Caroline Ellison
Caroline Ellison, Sam Bankman-Fried's partner and accomplice, gets off with 2 years in prison. That's not even a tenth of the sentence for SBF.
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The confessed billionaire fraudster Caroline Ellison has been sentenced to two years in a prison with the lowest level of restrictions, followed by three years of supervised and restricted freedom. This was decided by the judge in charge at the US Federal District Court for Southern New York. The sentencing range for the crimes to which Ellison pleaded guilty would have been up to 110 years' imprisonment, plus supervision afterwards. The woman managed the cryptocurrency hedge fund Alameda Research and secretly helped herself to the assets of customers of the cryptocurrency exchange FTX for its speculation. In the proceedings, the damage was estimated at eight billion US dollars.
FTX and Alameda Research were both founded by Sam Bankman-Fried (SBF) and Gary Wang. SBF was Ellison's partner and left his girlfriend in charge of Alameda Research. Together with several other managers, they misappropriated customer deposits and misused them for bets on cryptocurrencies, large donations to politicians, real estate purchases and other expenses. Although billions were in circulation, there was no accounting worthy of the name. In November 2022, FTX and Alameda Research went bankrupt. In the end, Alameda Research is said to have owed FTX ten billion dollars.
Ellison pleaded guilty to seven counts of fraud and conspiracy and cooperated with the prosecution. The crypto manager is also said to have returned most of her assets and helped track down further assets in the jungle of over 130 FTX and Alameda companies. In return, the public prosecutor's office promised not to prosecute further offenses.
Her ex-boyfriend, on the other hand, is unlikely to have received a similar offer. SBF pleaded not guilty, but was found guilty on all seven admitted charges and sentenced to 25 years in prison. Statistically, every year spent in US prison reduces life expectancy by twice as much time. The man is fighting the verdict from prison and wants a new jury trial. SBF argues, among other things, that the judge repeatedly ridiculed him in front of the jury, which is why the trial was unfair.
Lenient sentence thanks to guilty plea and support for the prosecution
Another FTX executive who pleaded guilty, Ryan Salame, was sentenced in May to seven and a half years in prison, three years of supervision, six million dollars in disgorgement of enrichment and five million dollars in damages. Salame did not appear as a prosecution witness at the trial, but Ellison did. On this basis, her lawyers applied for immunity from prosecution. The probation office also proposed this. The public prosecutor's office did not request a specific sentence, but emphasized the exemplary cooperation of the perpetrator.
The judge, Lewis Kaplan, also praised Ellison's support. He had never seen a witness like her before. "What she testified was very incriminating for herself," he said on Tuesday during the sentencing hearing, "She cooperated, and he (SBF, note) denied the whole thing." The judge acknowledged Ellison's remorse and admitted that she had been taken advantage of by her boyfriend at the time. However, given the seriousness of her fraud, he could not let her get away with it.
Gary Wang also entered into a plea bargain with the prosecution and pleaded guilty to four counts of fraud or conspiracy to commit fraud; he theoretically faces up to 50 years in prison. FTX manager Nishad Singh has also appeared as a prosecution witness; he has pleaded guilty to six counts, for which he faces up to 75 years in prison. The federal district court plans to determine the sentences for the two men this fall. Ellison is scheduled to begin her sentence on November 7 in the Boston area.
The case is called USA v Caroline Ellison and is being tried in the US Federal District Court for Southern New York under case number 22-cr-673.
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