As anticipated, a superseding indictment has now been filed in the criminal case against FTX founder Sam Bankman-Fried (SBF), pending in the Southern District of New York. SBF's bond was revoked on Friday after evidence of witness tampering was presented to the judge overseeing his case, resulting in him being remanded into the custody of the U.S. Marshal and sent to a federal jail in Brooklyn. The new indictment was filed Monday and, in theory, should clean up some of the issues that arose from conflicts between the initial indictment, subsequent additional charges, and extradition treaty obligations with the Bahamas.
Under the new indictment (which can be read in full below), the following charges are alleged as to SBF:
- Wire Fraud on Customers of FTX
- Conspiracy to Commit Wire Fraud on Customers of FTX
- Wire Fraud on Lenders to Alameda Research
- Conspiracy to Commit Wire Fraud on Lenders to Alameda Research
- Conspiracy to Commit Securities Fraud on Investors in FTX
- Conspiracy to Commit Commodities Fraud on Customers of FTX in Connection With Purchases and Sales of Cryptocurrency and Swaps
- Conspiracy to Commit Money Laundering
Additionally, the indictment contains a forfeiture allegation, asserting that all real or personal property derived from the proceeds of the alleged offenses is subject to forfeiture.
There is no charge explicitly for campaign finance violations. However, the overview of the indictment alleges that, between 2019 and 2022, SBF:
misappropriated and embezzled FTX customer deposits, and used billions of dollars in stolen funds for a variety of purposes, including, among other things, to enrich himself; to support the operations of FTX; to fund speculative venture investments; to help fund over a hundred million dollars in campaign contributions to Democrats and Republicans to seek to influence cryptocurrency regulation; and to pay for Alameda's operating costs. BANK.MAN-FRIED also made, and conspired with others to make, false and fraudulent statements and representations to FTX's investors and Alameda's lenders, including by providing false financial information to those investors and lenders.
Further, the indictment alleges:
As part of this scheme, to promote the interests of FTX and Alameda and to lobby for favorable government regulation, SAMUEL BANK.MAN-FRIED, a/k/a "SBF," the defendant, used stolen customer funds in part to make campaign contributions, and made the contributions in the names of straw donors to conceal the source of the funds. As recently as late 2022, BANKMAN-FRJED boasted about FTX's profits and portrayed himself as a savior of the cryptocurrency industry, making venture investments and acquisitions purportedly to assist struggling industry participants, and making lavish federal campaign contributions and lobbying members of Congress and other high-level government officials to promote cryptocurrency regulation that would favor his business and personal interests. In fact, as BANKMAN-FRJED well knew, FTX's finances contained a multi-billion-dollar deficiency caused by his own misappropriation of customer funds from the exchange, and yet he continued through FTX's collapse in November 2022 to use misappropriated customer funds to pay for his investments, acquisitions, and campaign contributions.
A helpful breakdown of SBF's campaign-related donations can be found here and is illustrated by this graph:
SBF used stolen customer funds to make more than $100 million in campaign contributions ahead of the 2022 U.S. midterms, per a new federal indictment.
— unusual_whales (@unusual_whales) August 14, 2023
Numerous members, PACs, and Congressional representatives have not given the funds back still.
Here is the breakdown. pic.twitter.com/fkQuinZ7e5
While not included at this time, a campaign finance charge could be added later, depending on a resolution regarding the extradition treaty.
It also came on the same day that prosecutors filed a streamlined indictment that contains the seven charges Bankman-Fried faces at the Oct. 2 trial — but there’s no longer a campaign finance charge for now, though it could go to trial later if they are found to conform with the terms of an extradition treaty with the Bahamas.
Still, prosecutors said in the latest indictment that Bankman-Fried misappropriated customer money to help fund over $100 million in political contributions in advance of the 2022 election. The indictment said he sought to “maximize FTX’s political influence” and use “these connections with politicians and government officials to falsely burnish the public image of FTX as a legitimate exchange.”
In the meantime, reports are detailing the "harsh conditions" SBF is facing as he awaits his trial in a jail cell.
"The existence is pretty bleak," Christopher Zoukis, managing director of the Zoukis Consulting Group, told Yahoo Finance of the facility and those like it known as "MDCs," or Metropolitan Detention Centers.
...
Zoukis, whose firm specializes in federal prison policy matters, likened MDCs to purgatories for the facilities' role in housing inmates awaiting trial. He said MDCs offer inmates few freedoms, few activities, and minimal time outdoors compared to federal prison.
"It's like a county jail — by far the worst time anyone ever serves," he said of the high-rise, mostly indoor living quarters that aren't designed for long-term stays. "Prison is infinitely better."
...
Bankman-Fried will likely have the ability to remain out of his cell approximately three hours a day, make phone calls, and access education. High-profile inmates are often placed on a protective custody floor meant for safety.
In general, Zoukis said, MDC inmates live in a two-person cell with bunk beds, along with a toilet and sink.
"You're pretty much locked in your bathroom," he said. "And things like cockroaches and fruit flies, that's pretty common."
Among other notable folk who've spent time at MDC:
R. Kelly, Mexican drug lord Joaquín "El-Chapo" Archivaldo Guzmán Loera, accused child sex trafficker Jeffrey Epstein, Epstein's fixer Geraldine Maxwell, and Donald Trump's former lawyer Michael Cohen.
I suppose one could say he's in good company?
SBF Superseding Indictment by Susie Moore on Scribd
Join the conversation as a VIP Member