Sam Bankman-Fried Makes His Last Stand

Admin

February 28

Since Sam Bankman-Fried was convicted of fraud last year, he has hired a new lawyer known for courtroom showmanship. A group of sympathetic law professors has pushed for a reappraisal of his actions. And his parents have turned for help to former employees of FTX, the collapsed cryptocurrency exchange he founded.

From a federal detention center in Brooklyn, Mr. Bankman-Fried, 31, has continued to fight his case behind the scenes, as he argues for a lenient sentence and prepares to appeal his conviction. On Tuesday, his lawyers are scheduled to file a legal memo in the U.S. District Court in Manhattan, making the case that he doesn't deserve to go to prison for the rest of his life.

The filing is a crucial step before Mr. Bankman-Fried's sentencing on March 28, when the federal judge overseeing his case, Lewis A. Kaplan, will decide how long to imprison the onetime billionaire on charges that carry a maximum sentence of 110 years. But it's only one prong of a long-shot strategy orchestrated by Mr. Bankman-Fried's family and friends to reverse his conviction and engineer a public reappraisal of his leadership at FTX.

Since last year's trial, Mr. Bankman-Fried has hired Marc Mukasey, who once represented former President Donald J. Trump, to oversee his sentencing, as well as a separate lawyer at the law firm Shapiro Arato Bach to handle the appeal. His parents, the Stanford University law professors Joe Bankman and Barbara Fried, have also been involved in the defense, helping line up people to write letters for their son that will be included in the memo.

Natalie Tien, a former assistant to Mr. Bankman-Fried at FTX, said she wrote a letter for his sentencing memo after exchanging emails with Mr. Bankman and Ms. Fried.

"I don't have grudges over him, and I do feel bad for his parents," Ms. Tien said.

A spokesman for Mr. Bankman-Fried declined to comment. Representatives for Mr. Bankman and Ms. Fried did not respond to requests for comment.

Federal prosecutors are set to outline their own sentencing recommendation in a filing due March 15. Even if Judge Kaplan decides not to impose the maximum sentence, Mr. Bankman-Fried could face decades behind bars.

The judge "could still give a very serious sentence given how young Mr. Bankman-Fried is; say, a 30- or 35-year sentence," said Miriam Baer, vice dean at Brooklyn Law School.

A spokesman for Damian Williams, the U.S. attorney for the Southern District of New York, declined to comment.

Before FTX collapsed in November 2022, Mr. Bankman-Fried was one of the most prominent figures in the renegade crypto industry, a widely celebrated billionaire whose face was splashed across billboards and magazine covers.

In October, a federal jury convicted him of stealing $8 billion from FTX's customers to finance political contributions, investments in other companies and lavish real estate purchases.

Mr. Bankman-Fried has maintained he is innocent and pledged to appeal. This month, he replaced his trial lawyers, Mark Cohen and Christian Everdell, with Mr. Mukasey, who has a reputation for forceful courtroom presentations.

Last year, Mr. Mukasey scored a victory in his defense of Trevor Milton, the founder of the electric truck manufacturer Nikola, who was convicted in 2022 of defrauding investors. A federal judge sentenced Mr. Milton in December to four years in prison, far less than the 11 years that prosecutors had requested.

Working in parallel to Mr. Mukasey is an appellate lawyer and former prosecutor, Alexandra Shapiro, a partner at Shapiro Arato Bach. She is expected to file Mr. Bankman-Fried's appeal after the sentencing.

Mr. Bankman and Ms. Fried have also played a role behind the scenes. Last month, Ms. Tien said, she received a text from one of Mr. Bankman-Fried's supporters, asking whether she would help with the memo. Then she got a follow-up email from the FTX founder's parents explaining the sentencing process and urging her to write "from the heart" about their son.

They were "kind of like testing the waters," Ms. Tien said in an interview. "I pretty much just said 'yes' right away."

Law professors who know Mr. Bankman-Fried's parents have also pressed his case.

In January, two close family friends, the Yale Law professor Ian Ayres and the Stanford Law professor John Donohue, wrote an essay for the website Project Syndicate, arguing that "all along" FTX had enough assets to make its customers whole.

"Whatever else might be said about Bankman-Fried, he was a brilliant businessman," Mr. Ayres and Mr. Donohue wrote.

Another law professor, Jonathan Lipson at Temple University, said in an interview that he was working with David Skeel of the University of Pennsylvania law school on an academic paper criticizing Sullivan & Cromwell, the law firm overseeing FTX's bankruptcy.

In September, Mr. Lipson co-wrote a brief in the bankruptcy case arguing for the appointment of an independent examiner to review Sullivan & Cromwell's actions, including its close collaboration with federal prosecutors. He said that he spoke with Mr. Bankman-Fried and his mother last year after another Stanford law professor reached out about the case and offered to put them in contact.

In their article, Mr. Lipson and Mr. Skeel argue that Sullivan & Cromwell "may have distorted the criminal justice process" by giving prosecutors wide-ranging access to FTX's resources and data, according to an unpublished draft shared with The New York Times.

A Sullivan & Cromwell spokesman declined to comment. In court filings, prosecutors have described the information sharing as "routine practices by companies cooperating in an investigation."

Mr. Bankman-Fried faces long odds. Criminal convictions are rarely overturned on appeal.

Mr. Bankman-Fried has been housed at Brooklyn's Metropolitan Detention Center since last summer and has spent much of his time working on the case, a person with knowledge of the matter said. He has also shared crypto market tips with the guards, the person said, recommending investments in the digital coin Solana.

This month, Mr. Bankman-Fried left the detention center for his first public court appearance since the trial, a hearing to authorize his new legal representation. In a Manhattan courtroom, Mr. Bankman-Fried was clean-shaven and wore a loosefitting brown prison uniform. At times, he turned around and smiled at the reporters sitting in the gallery.

J. Edward Moreno contributed reporting.