Sam Bankman-Fried in Custody in US, to Appear Before Judge ‘As Soon as Possible’

Tom Ozimek
By Tom Ozimek
December 22, 2022US News
Sam Bankman-Fried in Custody in US, to Appear Before Judge ‘As Soon as Possible’
FTX founder Sam Bankman-Fried (C) is led away handcuffed by officers of the Royal Bahamas Police Force at the Nassau, Bahamas, courthouse on Dec. 19, 2022. (Kris Ingraham/AFP via Getty Images)

FTX founder Sam Bankman-Fried has been extradited from the Bahamas and is now in federal custody in the United States, according to a U.S. prosecutor and media reports, with the accused fraudster expected to appear in front of a judge in relatively short order.

Manhattan U.S. Attorney Damian Williams said in a video posted on Twitter late Wednesday night that Bankman-Fried was already in FBI custody and was on his way back to the United States.

“He will be transported directly to the Southern District of New York and he will appear in court before a judge in this district as soon as possible,” Williams said.

Local media in the Bahamas showed video of a motorcade taking the 30-year-old cryptocurrency mogul to Nassau’s Odyssey Airport on the evening of Dec. 21.

Bankman-Fried landed at Westchester County Airport shortly before 10:30 p.m. later that day, according to The New York Post.

A plane taxis toward the runway at Odyssey Aviation with FTX co-founder Sam Bankman-Fried on board as he is extradited to the United States, in Nassau, Bahamas, on Dec. 21, 2022. (Joe Raedle/Getty Images)

‘Anxious to Leave’

The FTX founder agreed to the extradition on fraud charges, according to an affidavit read aloud by his lawyer during a court hearing in the Bahamas, where he had been held since being charged by federal prosecutors.

“Yes, I do wish to waive my right to such formal extradition proceedings,” he told the judge, the Reuters news agency reported.

His defense lawyer told the judge that his client was “anxious to leave.”

Video footage also showed Bankman-Fried, known as SBF, signing extradition papers to be sent back to the United States.

Prosecutors have alleged that Bankman-Fried stole billions of dollars in FTX customer assets to plug losses at his hedge fund, Alameda Research, in what Williams called “one of the biggest financial frauds in American history.”

Federal prosecutors in Manhattan last week charged Bankman-Fried with a series of crimes, including wire fraud and conspiracy to commit wire fraud, commodities fraud, securities fraud, money laundering, and fraud against the United States.

Sam Bankman-Fried, founder and former CEO of crypto currency exchange FTX, is walked in handcuffs to a plane during his extradition to the United States at Lynden Pindling international airport in Nassau, Bahamas, on Dec. 21, 2022. (Royal Bahamas Police Force/Handout via Reuters)

‘Our Patience Is Not Eternal’

Williams said in Wednesday’s video statement that Bankman-Fried’s associates—Caroline Ellison, former CEO of Alameda Research, and Gary Wang, co-founder of FTX—have pleaded guilty to defrauding investors.

He said Ellison and Wang were cooperating with investigators and also urged others involved in the alleged fraud to come forward.

“If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it,” Williams said. “We are moving quickly and our patience is not eternal.”

The Securities and Exchange Commission (SEC) said in a separate statement on Wednesday that it had also charged Ellison and Wang for their alleged roles in a long-running scheme to defraud FTX’s equity investors.

The Commodity Futures Trading Commission (CFTC) also said it had filed fraud charges against Ellison and Wang.

“Gary has accepted responsibility for his actions and takes seriously his obligations as a cooperating witness,” Ilan Graff, a lawyer for Wang, said in a statement.

An attorney for Ellison did not respond immediately to a request for comment.

A spokesman for Bankman-Fried’s legal team declined to comment.

Bankman-Fried has admitted to various risk-management failures at FTX but has said he believes he did not commit any crimes.

FTX crashed amid a rush of customer withdrawals amid concerns about its relationship with Alameda, with both companies later filing for bankruptcy.

FTX founder Sam Bankman-Fried speaks during the New York Times DealBook Summit in the Appel Room at the Jazz At Lincoln Center in New York on Nov. 30, 2022. (Michael M. Santiago/Getty Images)

‘Illegal Campaign Contributions’

Williams earlier accused Bankman-Fried of stealing billions of dollars from FTX customers and using the money for his own benefit.

“From 2019 until earlier this year, Bankman-Fried and his co-conspirators stole billions of dollars from FTX customers,” Williams said. “He used that money for his personal benefit, including to make personal investments and to cover expenses and debts of his hedge fund, Alameda Research.”

Williams also said that the FTX founder was charged with violating campaign finance laws “by causing tens of millions of dollars in illegal campaign contributions to be made to candidates and committees associated with both Democrats and Republicans.”

He said his team’s investigation into alleged fraudulent FTX activity and sister company Alameda Research was proceeding quickly.

“And all of this dirty money was used in service of Bankman-Fried’s desire to buy bipartisan influence and impact the direction of public policy in Washington,” Williams said.

Reports have indicated, however, that Bankman-Fried made more donations to Democrat candidates than Republicans.

In an indictment, prosecutors alleged (pdf) that Bankman-Fried made donations to campaigns under other people’s names. That allowed him to illegally donate far in excess of the $25,000 set by U.S. campaign finance laws, according to an unsealed indictment Tuesday.

Bankman-Fried and at least “one or more” associates agreed to make contributions to candidates and committees in New York while using the name of another person, which is illegal, officials said.

Bankman-Fried faces a maximum sentence of 115 years in prison if convicted on all eight counts, prosecutors said, though any sentence would depend on a range of factors.

During an interview with the Wall Street Journal this month, Bankman-Fried conceded that he couldn’t account for billions that were sent to Alameda from FTX.

“I don’t know of a violation of the terms of use. I don’t know every line of the terms of use. I can’t confidently say there wasn’t, but I don’t know of one,” he said.

“I ask myself a lot how I made a series of mistakes that seem—they don’t just seem dumb. They seem like the type of mistakes I could see myself having ridiculed someone else for having made.”

FTX’s demise sent shockwaves through an already-battered cryptocurrency industry, which has seen a string of meltdowns this year.

Jack Phillips and Reuters contributed to this report.

From The Epoch Times

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