NY - Samuel Bankman-Fried (FTX), Alleged Fraud, Money Laundering, Bahamas, 2019-2022 *Arrest*

[Gemmie]

I heard this just now on CNBC financial news, yet can't find anything in writing so I'll have to say it's MOO as I cannot prove this at this time. Sometimes I hear news before it's hits online. Usually when I'm watching Asian financial news my evenings (their mornings).

The news anchor was Kelly Evans and she said that it was an unsecured bond and all they put up was their house. I believe she said it was worth $1.7M, although I could be wrong about that. I was quickly scribbling notes. She also said that that's all they'd lose (their house) if he skipped.

I guess I'm just not familiar with what an unsecured bond is, or why they could set an amount so high, yet all the parents had to do is put up something almost 1/15th of the value. What good is setting a bond amount if that's truly the case?

I'll update with a link if they hurry and print this somewhere while I still have the opportunity to edit. Meanwhile... it'll just haveta be MOO until then.

ETA - I am running out of time to find a MSM source but I'm pretty sure this is acceptable here. Appears he's a Politico columnist: Former federal prosecutor. Legal analyst for TV and print. Host, #ItsComplicated podcast. Columnist, @POLITICOMag. Partner @BCLPlaw.

https://twitter.com/i/web/status/1606003624450002944

That's the best I can do!

 

[Gemmie]

What I find odd that they'd allow him to live with his parents is this:

The parents of Sam Bankman-Fried, who was arrested Monday in the Bahamas based on an indictment in the United States, are Stanford University law professors who face scrutiny for their own roles in the collapsed cryptocurrency exchange FTX, The New York Times reported.

What if they ended up linked to wrong doings at FTX? They might as well let Caroline Ellison and Gary Wang join the party while they're at it.

Parents of Bankman-Fried, Professors, Face Scrutiny | Inside Higher Ed

The parents of Sam Bankman-Fried, who was arrested Monday in the Bahamas based on an indictment in the United States, are Stanford University law professors who face scrutiny for their own roles in the collapsed cryptocurrency exchange FTX, The New York Times reported. Joseph Bankman is a...

www.insidehighered.com

 

[Gemmie]

I was seeing MSM stating SB-F's parents could be wiped out financially, but it was tabloid sources so I didn't want to take their word for it. Then I saw mention that they got that news from the WSJ which is a respectable source. I couldn't find it in print in their newspaper, but I found the transcript of one of their podcasts. Also interesting is his dad was a paid employee of FTX. Talk about things that make ya go Hmmmm.... Hence my earlier post about why is he allowed to stay wit his parents if they may somehow be implicated.

Daniella Cheslow: Okay. And what about the parents' role since then, including, of course, now that FTX has collapsed?

Justin Baer: As his businesses grew, I think the parents, primarily his father, took a lot of interest, found ways that he could be useful. He did help his son find someone to hire as a lawyer. And almost a year, he was a paid employee of FTX, so he was fairly involved in different ways. After the collapse and the bankruptcy filing and decision by Sam to resign, obviously his parents are taking on a different role. Both parents, given their experience, are advising on some level, among the last few allies that he has on the Bahamas.

Daniella Cheslow: And they've told friends their son's legal bills will likely wipe them out financially, right?

Justin Baer: Yeah. There was something that a number of their friends and colleagues shared. Most of the people I talked to were lawyers, right? So I think they all understand the costs associated with lengthy litigation and government investigations, which very possibly could last years and years.

Sam Bankman-Fried’s Parents Accompanied FTX’s Rise And Fall - What’s News - WSJ Podcasts

P.M. Edition for Dec. 12. As Sam Bankman-Fried prepares to testify before Congress on the collapse of crypto exchange FTX, many of his allies have deserted him. But not his parents Joseph Bankman and Barbara Fried, both professors at Stanford Law. WSJ Senior Special Writer Justin Baer explains...

www.wsj.com

 

[Countem]

It’s the New York Post, so take it fwiw.

Inside the $4M Silicon Valley home where Sam Bankman-Fried is under house arrest

The fallen crypto king will spend house arrest in his parents’ Palo Alto, California home located steps from Stanford University, where they’re professors.

nypost.com

The home is estimated to be worth more than $4 million today.

I wonder if a different house was used to cover bail, as this house is worth $4M?

 

[Countem]

I wonder if a different house was used to cover bail, as this house is worth $4M?

To answer my own question, based on the following article, he only had to put up a fraction of the bail, and, if he flees, his parents, the one relative (unnamed), and the one non-relative (unnamed) who signed the paperwork will be on the hook for $250M.

How Sam Bankman-Fried made his $250M bail

SBF made bond, but that doesn't mean he actually has $250 million.

www.axios.com

Also, not super newsworthy, but he has arrived in California based on The Daily Mail FWIW.

SBF arrives at $4m family home for Christmas under house arrest

Disgraced former FTX boss Sam Bankman-Fried was seen in the early hours of Friday arriving at his parents' $4 million California home, where he will remain under house arrest for the holidays.

www.dailymail.co.uk

 

[Gemmie]

Whoa... NOT cool.

“I knew that it was wrong," Ellison, 28, said in a New York federal court

“From 2019 through 2022, I was aware that Alameda was provided access to a borrowing facility on FTX.com, the cryptocurrency exchange run by Mr. Bankman-Fried,” Ellison said. “In practical terms, this arrangement permitted Alameda access to an unlimited line of credit without being required to post collateral, without having negative balances and without being subject to margin calls on FTX.com’s liquidation protocols.”

Alameda’s Ellison Says She, Bankman-Fried Agreed to Mislead FTX Lenders

(Bloomberg) -- Former Alameda Research CEO Caroline Ellison said she and FTX co-founder Sam Bankman-Fried knowingly misled lenders about how much the now-bankrupt trading firm was borrowing from the cryptocurrency exchange. Most Read from BloombergChina Estimates Covid Surge Is Infecting 37...

www.yahoo.com

 

[Countem]

Judge Ronnie Abrams recuses self from Sam Bankman-Fried case because husband’s firm advised FTX

The federal judge slated to oversee FTX founder Sam Bankman Fried’s case has recused herself because her husband’s law firm advised the bankrupt cryptocurrency exchange.

nypost.com

BBM

The federal judge slated to oversee FTX founder Sam Bankman Fried’s case has recused herself because her husband’s law firm advised the bankrupt cryptocurrency exchange.

“My husband has had no involvement in any of these representations,” she wrote in the filing. “These matters are confidential and their substance is unknown to the Court. Nonetheless, to avoid and possible conflict, or the appearance of one, the Court hereby recuses itself from this action.”

Fair decision by the judge, IMO.

 

[Missing Susan]

Judge Ronnie Abrams recuses self from Sam Bankman-Fried case because husband’s firm advised FTX

The federal judge slated to oversee FTX founder Sam Bankman Fried’s case has recused herself because her husband’s law firm advised the bankrupt cryptocurrency exchange.

nypost.com

BBM




Fair decision by the judge, IMO.

If she is the judge who set the bail, then it's not fair and there is an appearance of inpropriety.

 

[Warwick1991]

What's amazing is how many people trusted these inexperienced, unprofessional people with billions... How could the Ontario Teachers' Plan invest in $95 million in FTX without some kind of due diligence? At least Madoff had a carefully crafted veneer, with experience in the financial sector, a professional-appearing office and falsified regular statements.

 

[Gemmie]

What's amazing is how many people trusted these inexperienced, unprofessional people with billions... How could the Ontario Teachers' Plan invest in $95 million in FTX without some kind of due diligence? At least Madoff had a carefully crafted veneer, with experience in the financial sector, a professional-appearing office and falsified regular statements.

Greed? The thing about the teachers' plan is aren't those types of plans usually very cautious and don't put money in what could be considered speculation or high risk areas? So it's beyond me why a plan like that would have invested in a very risky area of the market.

 

[Countem]

If she is the judge who set the bail, then it's not fair and there is an appearance of inpropriety.

She is not the judge who imposed the bail. It was U.S. Magistrate Judge GG.

FTX's Bankman-Fried, charged with 'epic' fraud, released on $250 million bond

The bail package would require Bankman-Fried to surrender his passport and remain in home confinement at his parents' home in Palo Alto, California. He would also be required to undergo regular mental health treatment and evaluation.

www.reuters.com

 

[Countem]

RSBM

[…] How could the Ontario Teachers' Plan invest in $95 million in FTX without some kind of due diligence?

Greed? The thing about the teachers' plan is aren't those types of plans usually very cautious and don't put money in what could be considered speculation or high risk areas? So it's beyond me why a plan like that would have invested in a very risky area of the market.

Here is their official statement, FWIW.

Ontario Teachers’ statement on FTX

In October 2021, Ontario Teachers’ invested a total of US$75 million in both FTX International and its US entity (FTX.US) and participated with a follow-on investment of US$20 million in the FTX.US entity in January 2022.

www.otpp.com

These investments were made through our Teachers’ Venture Growth (TVG) platform. […] TVG was established in 2019 to invest in emerging technology companies raising late-stage venture and growth capital. Investments are structured to provide Ontario Teachers’ with returns commensurate with the risk undertaken and to provide proprietary insights that inform investing elsewhere across the Plan.

Our investment [in FTX] represented less than 0.05% of our total net assets and equated to ownership of 0.4% and 0.5% of FTX International and FTX.US, respectively.

 

[Elley Mae]

Sam Bankman-Fried claimed he didn’t know how a $16.4 million Bahamas mansion got listed under his parents’ names, insisting that it was meant to house staffers at his now-defunct FTX cryptocurrency exchange.

Sam Bankman-Fried said parents’ $16.4M Bahamas house was meant for FTX staff

“I don’t know the details of the house for my parents,” Bankman-Fried told The New York Times’ Andrew Ross Sorkin.

nypost.com

…

His parents, Joseph Bankman and Barbara Fried, live in a multimillion-dollar home in Stanford, in the San Francisco Bay Area, according to news reports and state records.

Zillow estimates the value of the five-bedroom home at about $4 million, while Redfin's estimate is $3.1 million.

Sam Bankman-Fried's parents, who bought him a dog while he's under house arrest, are some of the only people he still speaks to. Here's what we know about the Stanford Law professors.

Barbara Fried is a poet, biographer, and short-story writer. Joseph Bankman spent time working on charitable projects at FTX.

www.businessinsider.com

 

[Countem]

Sam Bankman-Fried claimed he didn’t know how a $16.4 million Bahamas mansion got listed under his parents’ names, insisting that it was meant to house staffers at his now-defunct FTX cryptocurrency exchange.

Sam Bankman-Fried said parents’ $16.4M Bahamas house was meant for FTX staff

“I don’t know the details of the house for my parents,” Bankman-Fried told The New York Times’ Andrew Ross Sorkin.

nypost.com

…

His parents, Joseph Bankman and Barbara Fried, live in a multimillion-dollar home in Stanford, in the San Francisco Bay Area, according to news reports and state records.

Zillow estimates the value of the five-bedroom home at about $4 million, while Redfin's estimate is $3.1 million.

Sam Bankman-Fried's parents, who bought him a dog while he's under house arrest, are some of the only people he still speaks to. Here's what we know about the Stanford Law professors.

Barbara Fried is a poet, biographer, and short-story writer. Joseph Bankman spent time working on charitable projects at FTX.

www.businessinsider.com

The following is MOO. Quotes are BBM and referenced at the bottom.

There is a significant upgrade to a $4M five-bedroom home in the San Francisco Bay Area when adding a $16.4M vacation home in the Bahamas, especially when SBF’s father was (at one point) an employee of FTX and was heavily involved in FTX beyond his employment.

Property records described the house as a “vacation home,” according to Reuters, which was the first to report the news.

A spokesperson for Bankman told The Wall Street Journal that Bankman was a paid FTX employee for 11 months, in which time he worked on charitable projects, and was not involved in running the company.

Bankman helped FTX recruit its first lawyers, joined FTX executives in meetings on Capitol Hill, and advised his son as he prepared to testify before the House Financial Services Committee, The New York Times reported. Bankman regularly flew to the Bahamas, per The Times.

The Times also reported that Bankman organized an FTX event at Miami Heat's FTX Arena in March, where local high school students pitched business ideas to a panel of judges.

Also, someone does not simply “accidentally” get listed on real estate paperwork. (Facepalm.) To claim that is ludicrous, especially when other properties were in the company’s or active employees’ names. It seems like they are simply employing a CYA tactic to keep SBF’s parents excluded from legal issues.

A spokesperson for the couple told Reuters that they had long been in the process of returning the deeds to the home to FTX.

Sam Bankman-Fried said parents’ $16.4M Bahamas house was meant for FTX staff

“I don’t know the details of the house for my parents,” Bankman-Fried told The New York Times’ Andrew Ross Sorkin.

nypost.com

Sam Bankman-Fried's parents, who bought him a dog while he's under house arrest, are some of the only people he still speaks to. Here's what we know about the Stanford Law professors.

Barbara Fried is a poet, biographer, and short-story writer. Joseph Bankman spent time working on charitable projects at FTX.

www.businessinsider.com

 

[Elley Mae]

FTX founder Sam Bankman-Fried was 'chilling' in the American Airlines lounge at JFK before flying business class to his parents' home to await trial

FTX founder Sam Bankman-Fried was 'chilling' in the American Airlines lounge at JFK before flying business class to his parents' home to await trial

The cofounder and former CEO of collapsed crypto trading platform FTX was spotted at JFK airport on Thursday before flying to his parents' home.

finance.yahoo.com

…

In the business lounge on computer.

 

[Elley Mae]

During the Twitter Spaces interview, Bankman-Fried admitted he was playing video games, which were causing the clicking sounds heard in the background. He said he will appear on his own before the House panel on Tuesday.

Sam Bankman-Fried to testify before Congress remotely: ‘Quite overbooked’

Bankman-Fried said he’s “quite overbooked” and has security concerns about “paparazzi” if he were to travel to Washington, DC.

nypost.com

…

Mr. Bankman-Fried, who was the only person charged in the indictment, was taken into custody by the Bahamian authorities, the person said. He was arrested shortly after 6 p.m. at his apartment complex in the Albany resort in the Bahamas, according to a statement from the Bahamian police.

FTX’s Sam Bankman-Fried Is Arrested in the Bahamas

A statement by the government of the Bahamas said Mr. Bankman-Fried was arrested after prosecutors in the United States filed criminal charges.

www.nytimes.com

…

I was actually listening to cspan that day to hear what SBF had to say only to hear of the arrest the evening before.

I find that suspect personally like to keep him from saying too much.

Jmo

 

[Warwick1991]

Sam Bankman-Fried claimed he didn’t know how a $16.4 million Bahamas mansion got listed under his parents’ names, insisting that it was meant to house staffers at his now-defunct FTX cryptocurrency exchange.

Sam Bankman-Fried said parents’ $16.4M Bahamas house was meant for FTX staff

“I don’t know the details of the house for my parents,” Bankman-Fried told The New York Times’ Andrew Ross Sorkin.

nypost.com

…

His parents, Joseph Bankman and Barbara Fried, live in a multimillion-dollar home in Stanford, in the San Francisco Bay Area, according to news reports and state records.

Zillow estimates the value of the five-bedroom home at about $4 million, while Redfin's estimate is $3.1 million.

Sam Bankman-Fried's parents, who bought him a dog while he's under house arrest, are some of the only people he still speaks to. Here's what we know about the Stanford Law professors.

Barbara Fried is a poet, biographer, and short-story writer. Joseph Bankman spent time working on charitable projects at FTX.

www.businessinsider.com

IMO his parents' house is a relatively modest looking wood frame house, which would be worth far less if it wasn't in Stanford. I'm not sure I'd call it a multi-million dollar property. The value is the result of the extremely high real estate prices in the San Francisco Bay area, where even the simplest ranch is worth at least $1 million.

The house in the Bahamas is a different story - real estate purchases aren't just made with the wrong names. I think SBF's parents won't escape prosecution and, at the very least, some kind of clawback.

 

[Countem]

North Dimension was central to misappropriation of FTX customers' cash, regulators say

North Dimension was where FTX customers were told to wire money if they wanted to trade on its exchange, according to a complaint filed by the SEC.

www.nbcnews.com

BBM

North Dimension [a subsidiary of Alameda Research] was where FTX customers were told to wire money if they wanted to trade on its exchange, according to a complaint filed by the SEC. […] But North Dimension Inc. also appears to have been a fake online electronics retailer, an NBC News investigation found.

FTX customers sending money to North Dimension likely wired it through Silvergate Bank[.] Silvergate Bank did not immediately respond to a request for comment about the due diligence it conducted on North Dimension or whether it visited its website [which was obviously problematic] to verify its operations.

North Dimension was incorporated […] about a year and a half after FTX commenced operations. Its incorporation papers, and those of a sister company called North Wireless Dimension, were drawn up by Fenwick & West, the Seattle-based law firm that employed Daniel Friedberg, FTX’s chief regulatory officer, before he joined the crypto empire.

 

[Countem]

Emails reveal Sam Bankman-Fried's courtship of federal regulators

The cryptocurrency billionaire employed several former regulators who aided his efforts to woo top CFTC officials, emails obtained by the Los Angeles Times show.

www.latimes.com

This is an excellent article. It’s hard to summarize but basically lays out the integration of former colleagues of SEC and CFTC into the upper-ups at FTX to push favorable legislation.

 

[Elley Mae]

Testimony of Mr. John J. Ray III CEO, FTX Debtors December 13, 2022
House Financial Services Committee

https://financialservices.house.gov/uploadedfiles/hhrg-117-ba00-wstate-rayj-20221213.pdf

…

This I heard on cspan.