Charity or Fraud? Uncover the Truth About Sam Bankman-Fried’s Criminal Conduct

IV. The Defendant’s History and Characteristics Do Not Warrant a Significant Variance

Bankman-Fried’s personal history and characteristics do not warrant a variance from what should be a lengthy sentence of incarceration. Unlike many criminals who come before the Court who began life with almost nothing, Bankman-Fried began with and continued throughout his life to enjoy substantial advantages over others in society. (See Def Mem. at 39-43 (summarizing Bankman-Fried’s comfortable upbringing and education at MIT)). After getting a sought-after job at an “elite quantitative trading firm” earning hundreds of thousands of dollars (Def. Mem. at 43), Bankman-Fried started two companies that could have been successful without fraud. Indeed, as he emphasized during trial, FTX earned around a billion dollars a year in transaction fees by users. But the defendant chose to abandon honest work to pursue profit and influence through crime, and he used the proceeds of those crimes to enjoy his own lifestyle of affluence. The fact that he chose to engage in a massive fraud is an aggravating factor, not a mitigating one.

Urging leniency, the defendant has submitted several letters from friends and family attesting to his character. From those, he argues that the evidence at trial did not show the “real Sam.” The fact that the version of the defendant presented at trial is unrecognizable to his family and friends does not mean that the defendant did not willfully engage in enormously damaging conduct. Humans are complicated, and the capacity of one person to be generous while also committing heinous crimes is almost unexplainable. Famously, Madoff was described by several people as a “generous person” who paid for employees’ honeymoons, purchased a machine to read to a blind man, arranged for medical care of an employee’s mother after a stroke, and assisted another employee in her efforts to adopt a child. See United States v. Bonventre, No. 10 Cr. 228 (LTS) (S.D.N.Y.) (Trial Tr. 2649, 2850, 7550, 9501, 10198). This is all to say that the defendant could be honest with his family while he lied to customers and investors; he could behave in a selfless manner with friends while being motivated by influence, power, fame, and wealth in his business. The defendant’s father, brother, and psychiatrist all submitted letters suggesting that Bankman-Fried is not motivated by greed. (Def. Mem. at 50-52). While that may be their experience, the trial record demonstrates otherwise: the defendant engaged in a myriad of fraudulent conduct to maximize his business’s earnings and his own wealth. He may have claimed that he intended to give all his money away, but the evidence at trial demonstrated that the defendant lived in an expensive penthouse apartment, owned other properties, bought a home for his parents, gifted his parents millions of dollars, named the Miami Heat’s sports arena after FTX, paid for a Superbowl advertisement, paid millions of dollars to K5 to be connected to celebrities and politicians, made risky venture investments, flew around in a private jet, and made millions of dollars in political donations.

The defendant makes a point in his sentencing submission to note his charitable giving. (Def. Mem. at 46-50). But that was charity with other people’s money. The defendant’s contributions to the FTX Foundation, which he now highlights, and his brother’s pandemic prevention non-profit, Guarding Against Pandemics, were paid for with customers’ funds routed through Alameda. (GX-1035, 1040). Even if that were not the case, prior charitable works, however commendable and extensive, by professionally successful defendants rarely, if ever, should be considered a materially mitigating factor because, as courts have previously recognized, it is not extraordinary for such individuals to be involved in charities. See, e.g., United States v. Barbera, No. 02 Cr. 1268 (RWS), 2005 WL 2709112, at *12-13 (S.D.N.Y. Oct. 21, 2005); United States v. Fishman, 631 F. Supp. 2d 399, 403 (S.D.N.Y. 2009) (a defendant’s “good name and good works” should not serve as “the human shield he raises to seek immunity or dramatic mitigation of punishment when he is caught”). Indeed, many defendants do not have the resources—in time, money, or social standing—to perform such deeds, and so the law is reticent to show leniency to the few defendants who are fortunate enough to have such options. See, e.g., United States v. Vrdolyak, 593 F.3d 676, 682 (7th Cir. 2010) (“Wealthy people commonly make gifts to charity. They are to be commended for doing so but should not be allowed to treat charity as a get-out-ofjail card.”); United States v. Ali, 508 F.3d 136, 149 & n.17 (3d Cir. 2007) (charitable service is “evaluated with reference to the offender’s wealth and status in life” because defendants “who enjoy sufficient income and community status . . . have the opportunities to engage in charitable and benevolent activities.” (citations and quotation marks omitted)); United States v. McClatchey, 316 F.3d 1122, 1135 (10th Cir. 2003) (“[E]xcellent character references are not out of the ordinary for an executive who commits white-collar crime; one would be surprised to see a person rise to an elevated position in business if people did not think highly of him or her.”). Bankman-Fried should not be credited with charitable giving when it was done with fraud proceeds and its benefits pale in comparison to the damage done by his fraud.