Sam Bankman-Fried’s trial is scheduled to begin on October 3, with the 12-person jury likely to spend weeks deliberating a range of criminal charges against the former FTX CEO, ranging from money laundering to wire fraud. It was once valued at US$32 billion.
While his fate — and whether he is sentenced to prison — may not be known for more than a month, the details of his spectacular trajectory are well-documented, from his rise as a billionaire crypto prodigy and philanthropist , to his downfall after allegedly using client funds to save others. his empire and made lavish purchases.
His case is likely to be called the “trial of the decade,” and government witnesses will include members of his inner circle, from childhood friend Gary Wang to SBF’s ex-girlfriend and his trading company, Alameda Research. (CEO of Alameda Research).
The United States has a long history of financial fraud, and the past two decades have been particularly littered with mysterious figures who have captured the public’s attention. Bankman-Fried’s innocence may be intact until the trial is over, but the question remains: How do the crimes for which he is accused compare to those of his peers? Perhaps more importantly, do their results tell us anything about Bankman Fried’s prospects?
Bernie Madoff
Aside from Charlie Ponzi himself, Bankmanfried’s closest analogy is to Bernie Madoff, the one-time financial titan who defrauded investors of billions of dollars.
Just like Bankman-Fried and Madoff established oneself As a leader in his industry. In addition to serving as chairman of the investment firm, he served as head of the Nasdaq stock exchange and helped innovate strategies in the lucrative market-making world, where firms act as traders to execute trades.
Madoff’s scheme was more obviously fraudulent than the alleged FTX mechanism, in which customer funds were used to plug holes after disastrous cryptocurrency bets were made by FTX-related trading firms. In Madoff’s case, he would take funds from investors and claim to use the funds to trade, but instead deposit the money into bank accounts to create false returns. As is typical of a pyramid scheme, his strategy relied on attracting more customers to repay early investors, but not enough to arouse suspicion.
Madoff was arrested by the FBI in 2008 after his sons told authorities that his asset management business was a lie.Ministry of Justice accuse him Convicted of 11 federal felonies, including securities fraud and money laundering. Madoff insists he is the sole responsible party, unlike Bankman-Fried, who has tried to pin the blame on other FTX executives, including former Alameda Research CEO Carl Caroline Ellison.
Another difference with Bankman-Fried is that Madoff pleaded guilty, but it did not ultimately reduce his sentence in a meaningful way – Federal Court Still gave it to him In 2009, Madoff was sentenced to 150 years in prison. died 2021 at the Federal Prison Medical Center.
elizabeth holmes
The Theranos founder may not have committed a financial crime like Bankman-Fried and Madoff, although the criminal charges that ultimately sank her were for defrauding investors.
As detailed in the investigation report bad blood and Hulu series DropoutHolmes was part of the legacy of Silicon Valley’s genius tech founders, Bankman-Fried later claimed, even though he hailed from Hong Kong and the Bahamas (Alameda did start in Berkeley).
After dropping out of Stanford, Holmes founded Theranos with aggressive claims that the company had developed technology to collect comprehensive medical data from a drop or two of blood. The innovation was hailed as a revolution in medicine, and investors and backers rushed in, from venture capitalist Tim Draper to former Secretary of State George Shultz.
largely due to reports wall street journal According to an investigation by reporter John Carreyrou and a former employee whistleblower, Theranos’ technology was clearly ineffective and the company had been using commercially available products to falsify test results.Although Holmes denied the claims, Theranos collapsed From 800 employees in 2015 to a few dozen in 2018.Later that year, it closure operate.
After a lengthy investigation, Holmes, along with Theranos chief operating officer and one-time lover Ramesh “Sunny” Balwani, pleaded not guilty to charges related to a criminal scheme to defraud investors, patients and doctors. sin.Her trial began in 2021, with a jury finding her guilty In 2022, she was charged with four counts of defrauding investors. She was found not guilty of defrauding patients.
Last year, a federal judge sentenced Holmes to just over 11 years in prison. After her appeal failed, she was sent to a minimum security prison in May 2022 and sentenced to prison. report This year, the Prison Service expects her sentence could be reduced by two years if she behaves well.
Martin Shkreli
Famed “pharma bro” Martin Shkreli has become a whisperer of the SBF, largely because he is also incarcerated at the Metropolitan Detention Center, the notorious Brooklyn jail where classes That’s where Kerman Fried was held.
when he is Rejected attempt from wealth Detailing his time at the MDC as a white-collar criminal, Shkreli’s high-profile social media appearances have kept him in the spotlight for years.
Shkreli, another young iconoclast, came to prominence in 2015 when his pharmaceutical company Turing bought a license for an antiparasitic drug used to treat AIDS-related complications and increased price More than 5,000%.
While this move was widely criticized, his other antics, e.g. Buy Wu-Tang Clan single album, he arrested on securities fraud charges related to the management of his hedge fund empire.Prosecutor explain He ran his business like a Ponzi scheme, forming new companies to repay defrauded investors in previous companies.
Shkreli’s trial was punctuated by stunts, including irritate prosecutors Call them “Junior Colleges” and dedication A lock of Hillary Clinton’s hair sells for $5,000. Like Bankman-Fried, Shkreli’s bail was revoked and he was sent to the MDC to await sentencing, although he did not tamper with any witnesses, while prosecutors accused Bankman-Fried of doing so.
a federal judge Sentenced In 2018, Shkreli was sentenced to seven years in prison, and the following year, the pharmaceutical brother lost his appeal and was ordered to forfeit millions in assets, including his Wu-Tang Clan album.After four years in a low-security facility, Shkreli was sent to a Bureau of Prisons halfway house and freed 2022.
Razle Khan
This list wouldn’t be complete without cryptocurrency criminals, and that’s with the exception of Ruja Ignatova (a.k.a. “The Missing Crypto Queen”–Who better than Heather “Razlehan” Morgan.
serial entrepreneur, Forbes contributors, and TikTok rapper Morgan, who went by the alias Razzlekhan, along with her husband Ilya Lichtenstein, pulled off one of the biggest heists in the cryptocurrency space in 2016. In 2016, they stole nearly 120,000 Bitcoins worth approximately $72 million from the cryptocurrency exchange Bitfinex. In 2022, when they were charged by federal authorities with conspiracy to commit money laundering, Bitcoin was worth more than $3 billion, although they had only succeeded in cashing out a fraction of that.
Both men admitted the crime, Morgan freed While out on bail, Lichtenstein was detained as a flight risk. They reached a plea deal in July 2023 and could face decades in prison. Her embarrassing TikTok videos will likely become her lasting legacy — something Bankman-Fried’s brief foray into Substack couldn’t match.
Svlook
