Since Sam Bankman Freed was convicted of fraud last year, he has hired a new attorney known for his courtroom showmanship. A group of sympathetic law professors is calling for a reassessment of his actions. His parents then turned to former employees of FTX, the failed cryptocurrency exchange he founded, for help.
Mr. Bankman Fried, 31, is in a federal detention center in Brooklyn, where his case continues behind the scenes as he prepares to appeal his conviction in hopes of receiving a more lenient sentence. On Tuesday, his lawyers filed a legal memo in U.S. District Court in Manhattan arguing that he should receive a prison sentence of five and a quarter to six-and-a-half years.
Bankman Fried “deeply and deeply regrets” the “suffering he has caused over the past two years,” the memo said. “His sole focus after the FTX collapse was to make his customers whole.”
The filing comes March 28, when federal judge Louis A. Kaplan, who is overseeing Bankman Fried's case, will decide how long to jail the former billionaire on a charge that carries a maximum penalty of 110 years. This was an important step prior to sentencing. But it is just one part of a long-term strategy orchestrated by Bankman-Fried's family and friends to overturn his conviction and orchestrate a public reassessment of his leadership at FTX. That was just one end.
Since last year's trial, Bankman Fried has hired Mark Mukasey, who once represented former President Donald J. Trump, to oversee the sentencing and hired the law firm Shapiro Arato & Co. to handle the appeals. Bach hired another lawyer. His parents, Stanford University law professors Joe Bankman and Barbara Freed, also participated in the defense, helping to line up people to write letters vouching for their son's character included in the sentencing memo.
Natalie Tien, Bankman Fried's former assistant at FTX, said in an interview that she wrote the memo letter after exchanging emails with Bankman and Fried.
“I don't hold any grudge against him. I feel really sorry for his parents,” Tien said.
A spokeswoman for Bankman Freed declined to comment. Representatives for Bankman and Fried did not respond to requests for comment.
Federal prosecutors plan to outline their own sentencing recommendations in a filing scheduled for March 15th. But Bankman Freed's memo says his probation officer has already recommended a 100-year sentence, a sentence his lawyers call “barbaric.”
Even if Judge Kaplan decides not to impose the maximum penalty, Bankman Fried could face decades in prison.
“Given Mr. Bankman-Fried's young age, the judge could still impose a very severe sentence, such as 30 or 35 years in prison,” said Miriam Baer, associate dean of Brooklyn Law School. ” he said.
A spokesperson for Damian Williams, the U.S. attorney for the Southern District of New York, declined to comment.
Before FTX's collapse in November 2022, Bankman Fried was one of the most prominent figures in the rebellious crypto industry, a widely known billionaire whose face was featured prominently on billboards and magazine covers. He was an elder.
In October, a federal jury convicted him of stealing $8 billion from FTX customers to fund political contributions, investments in other companies and lavish real estate purchases.
Bankman Freed maintains his innocence and vows to appeal. This month, he replaced trial lawyers Mark Cohen and Christian Eberdell, who are representing another fallen crypto tycoon in a separate case, against Mukasey, who has a reputation for aggressive arguments in court. Appointed.
Last year, Mr. Mukasey won a victory in defending Trevor Milton, the founder of electric truck maker Nikola, who was sentenced in 2022 for defrauding investors. In December, a federal judge sentenced Milton to four years in prison, far less than the 11 years prosecutors had sought.
Working alongside Mukasey is Alexandra Shapiro, a partner at Shapiro Arato Bach, an appellate lawyer and former prosecutor. She plans to appeal Bankman Freed after the verdict.
Mr. Bankman and Mr. Fried have also played roles behind the scenes. Tien said last month he received a text message from one of Bankman Fried's supporters asking if he could help write the memo. She then received a follow-up email from the FTX founder's parents explaining her sentencing process and encouraging her to write about her son “from the heart.”
They were “kind of testing the waters,” Tien said in an interview. “I said 'yes' almost immediately.”
Tien was one of 29 people who wrote for the memo, including Bankman-Fried's parents, brother and several former colleagues. She called him kind and empathetic, saying, “He never acted out of greed or self-interest.”
In his filing, Mukasey cited a letter that portrayed Bankman-Fried as a hard-working, altruistic billionaire who avoided the trappings of fame and fortune. He also claimed that some of the oddities in the mogul's behavior could be explained by “neurodiversity.”
Bankman-Fried has “appearance characteristics typical of neurodiversity, including inconsistent eye contact,” the memo said. “He may be perceived as unfriendly, negative, evasive, indifferent, or indifferent.”
Outside of formal court proceedings, law professors who know Bankman-Fried's parents are also pursuing his case.
In January, two close family friends, Yale Law Professor Ian Ayers and Stanford Law Professor John Donoghue, wrote an essay on the website Project Syndicate stating that FTX has “always” been enough to make customers whole. He claimed to have considerable assets. Mukasey also stated in his memo:
“No matter what else may be said about Bankman Freed, he was an excellent businessman,” Ayers and Donahue wrote.
Jonathan Lipson, another Temple University law professor, said in an interview that he and David Skeel of the University of Pennsylvania School of Law have written an academic paper criticizing Sullivan & Cromwell, the law firm overseeing FTX's bankruptcy. He said he is working on it.
In September, Mr. Lipson co-authored a brief in the bankruptcy case arguing for the appointment of an independent examiner to review Sullivan & Cromwell's conduct, including working closely with federal prosecutors. He said he spoke with Mr. Bankman-Fried and his mother last year after another law professor at Stanford University reached out about the matter and offered to get in touch.
According to unpublished drafts shared with The New York Times, Lipson and Skeel wrote in their article that Sullivan & Cromwell had given prosecutors broad access to FTX's resources and data to “improve criminal justice.” “It may have distorted the process.”
A spokesperson for Sullivan & Cromwell declined to comment. In a court filing, prosecutors said the sharing of information was a “routine practice by companies cooperating with investigations.”
Mr. Bankman-Fried has long potential. Criminal convictions are rarely overturned on appeal.
He has been held at Brooklyn's Metropolitan Detention Center since last summer, where he spends much of his time investigating the case, according to people familiar with the matter. According to the person, Bankman Freed also shared tips about the virtual currency market with the security guards and recommended them to invest in the digital coin Solana.
Bankman Freed made her first public appearance since her trial this month, leaving jail for a hearing to approve new legal representation. In the Manhattan courtroom, he was clean-shaven and wearing a loose-fitting brown prison uniform. Every once in a while, he turned and smiled at the reporters sitting in the gallery.
J. Edward Moreno Contributed to the report.
