Bankman-Fried used $100 million in stolen FTX funds for political
donations, US says
Send a link to a friend
[August 15, 2023]
By Luc Cohen
NEW YORK (Reuters) -Sam Bankman-Fried used money he stole from customers
of his FTX cryptocurrency exchange to make more than $100 million in
political campaign contributions before the 2022 U.S. midterm elections,
federal prosecutors said on Monday.
An amended indictment accused the 31-year-old former billionaire of
directing two FTX executives to evade contribution limits by donating to
Democrats and Republicans, and to conceal where the money came from.
"He leveraged this influence, in turn, to lobby Congress and regulatory
agencies to support legislation and regulation he believed would make it
easier for FTX to continue to accept customer deposits and grow," the
indictment said.
Bankman-Fried faces seven counts of conspiracy and fraud over FTX's
collapse, though the indictment no longer includes conspiracy to violate
campaign finance laws as a separate count.
Federal prosecutors in Manhattan said last month they would drop that
charge after the Bahamas, where FTX was based and where Bankman-Fried
was arrested in December 2022, said it never intended to extradite him
on that count.
Instead, prosecutors told U.S. District Judge Lewis Kaplan last week
that a new indictment would "make clear that Mr. Bankman-Fried remains
charged with conducting an illegal campaign finance scheme as part of
the fraud and money laundering schemes originally charged."
Mark Botnick, a spokesman for Bankman-Fried, declined to comment.
Bankman-Fried has previously pleaded not guilty to stealing billions of
dollars in FTX customer funds to plug losses at Alameda Research, his
crypto-focused hedge fund.
Kaplan jailed him last Friday ahead of his Oct. 2 trial, after finding
probable cause that Bankman-Fried tampered with witnesses.
Previously, Bankmman-Fried had been largely confined to his parents'
Palo Alto, California, home on $250 million bond.
Bankman-Fried rode a boom in cryptocurrency values to amass a fortune
that was once estimated at $26 billion, and became an influential donor
to mostly Democratic candidates and causes.
[to top of second column]
|
Sam Bankman-Fried, the founder of
bankrupt cryptocurrency exchange FTX, arrives at court as lawyers
push to persuade the judge overseeing his fraud case not to jail him
ahead of trial, at a courthouse in New York, U.S., August 11, 2023.
REUTERS/Eduardo Munoz/File Photo
The November 2022 collapse of FTX after a flurry of customer
withdrawals destroyed his wealth and stained his reputation.
EX-FTX EXEC SALAME DECLINES TO TESTIFY
Bankman-Fried's indictment does not name the two people prosecutors
say he used for "straw donors" to donate money at his direction. But
other court papers and Federal Elections Commission data show they
are Nishad Singh and Ryan Salame.
Singh, FTX's former engineering chief, pleaded guilty to fraud and
campaign finance violations in February. He donated $9.7 million to
Democratic candidates and causes, and said in court he knew the
money came from FTX customers.
Salame, the former co-CEO of FTX's Bahamian unit, gave more than $24
million to Republican candidates and causes in the 2022 election
cycle, according to Federal Election Commision data.
He has not been charged with a crime. In a separate court filing on
Monday, prosecutors said Salame's lawyer had told them he would
invoke his Fifth Amendment right against self-incrimination if
called to testify.
Prosecutors said Salame told a family member in a November 2021
message that Bankman-Fried wanted to use political donations to
"weed-out" anti-crypto Democratic and Republican lawmakers, and
would likely “route money through me to weed out that republican
[sic] side.”
Salame's lawyer did not immediately respond to a request for
comment.
(Reporting by Luc Cohen in San Jose, CaliforniaEditing by Chris
Reese, David Gregorio, Jonathan Oatis and Shri Navaratnam)
[© 2023 Thomson Reuters. All rights
reserved.]This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content. |