USA v. Samuel Bankman-Fried Court Filing, retrieved on March 15, 2024 is part of . You can jump to any part in this filing . This part is 13 of 33. HackerNoon’s Legal PDF Series here I. Calculation of the Applicable Sentencing Guidelines The Probation Department calculated that the adjusted offense level subtotal is 56, which is reduced to a total offense level of 43 pursuant to Chapter 5, Part A, comment n.2, since the total offense level is in excess of level 43. (PSR ¶¶ 70-89). The Government agrees with the Probation Department’s conclusion that the total offense level is 43. The Government, however, submits that the adjusted offense level subtotal is 60, not 56: six levels should be added under U.S.S.G. § 2B1.1(b)(2) because the offense resulted in substantial financial hardship to 25 or more victims (rather than the 2-level enhancement proposed by Probation for at least one victim experiencing financial hardship). Besides that modification, the Government agrees with the Probation Department’s calculation, and submits that the Court should calculate the applicable Sentencing Guidelines as follows: • Counts One through Six are grouped for guideline calculation purposes because the offense level is determined largely on the basis of the total amount of harm or loss. U.S.S.G. § 3D1.2(d). These counts are grouped with Count Seven, the money laundering conspiracy, pursuant to U.S.S.G. § 3D1.2(c) and Application Note 6 to U.S.S.G. § 2S1.1, because the defendant was convicted of conspiring to launder the funds derived from the underlying wire fraud offense charged in Count One. Pursuant to U.S.S.G. § 3D1.3(a), since the counts are grouped, the offense level applicable to the group is the highest offense level of the counts in the groups, which is the offense level for money laundering conspiracy. The applicable guideline section for a violation of 18 U.S.C. § 1956(h) is U.S.S.G. § 2S1.1. Pursuant to U.S.S.G. § 2S1.1(a)(1), the guideline set forth in U.S.S.G. § 2B1.1 is used. Pursuant to U.S.S.G. § 2B1.1(a)(1), the base offense level is 6.[1] • Base Offense Level: The total loss to FTX’s customers was in excess of $8 billion; the total loss to FTX’s equity investors was in excess of $1 billion; and the total loss to Alameda’s lenders was in excess of $1 billion. Because the loss involved was $10 billion or more, which exceeds $550 million, an increase of 30 levels is required by U.S.S.G. § 2B1.1(b)(1)(P). • Loss Amount: The offense involved at least one million victims, and resulted in substantial financial hardship to 25 or more victims. First, as the PSR correctly indicates, the defendant’s offense involved over one million victims, and the trial evidence indicated that at least one victim, BlockFi, experienced substantial financial hardship as a result of the defendant’s conduct, declaring bankruptcy soon after FTX.com’s bankruptcy was revealed. (Tr. 1228). BlockFi’s bankruptcy is a sufficient basis to find that at least one victim experienced substantial hardship. See U.S.S.G. § 2B1.1, Application Note 4(F)(i)-(ii) (“substantial financial hardship” includes insolvency and filing for bankruptcy under Chapter 11). Accordingly, at a minimum, an increase of 2 levels is required by U.S.S.G. § 2B1.1(b)(2)(A). However, as described below, more than 25 individual customers experienced substantial hardship, losing their life savings on FTX. See U.S.S.G. § 2B1.1, Application Note 4(F)(i), (iii) (“substantial financial hardship” includes insolvency and suffering substantial loss of a retirement, education, or other savings or investment fund).[2] Accordingly, an increase of 6 levels is required by U.S.S.G. § 2B1.1(b)(2)(C). • Number of Victims: Because the offense involved a misrepresentation or other fraudulent action during the course of a bankruptcy proceeding, a 2-level increase is required by U.S.S.G. § 2B1.1(b)(9). • Fraudulent Action During Bankruptcy: Because the defendant deliberately located FTX outside of the United States to evade law enforcement or regulatory officials, because a substantial part of the fraudulent scheme was committed from outside of the United States, and because the offense otherwise involved sophisticated means, a 2-level increase is required by U.S.S.G. § 2B1.1(b)(10). • Conduct Outside of the United States and Sophisticated Means: Because the defendant derived more than $1 million in gross receipts from one or more financial institutions as a result of the offense, a 2-level increase is required by U.S.S.G. § 2B1.1(b)(17). • Gross Receipts from a Financial Institution: Because the defendant was convicted under 18 U.S.C. § 1956, a 2-level increase is required by U.S.S.G. § 2S1.1(b)(2)(B). • Conviction Under Section 1956: Because the defendant was involved in sophisticated money laundering, specifically through the use of offshore accounts and multiple layers of transactions, a 2-level increase is required by U.S.S.G. § 2S1.1(b)(2)(C). • Sophisticated Money Laundering: The defendant was the CEO of FTX, and through his decision-making authority, directed and led his employees to commit criminal activities as part of the fraud and money laundering conspiracies. As such, he was an organizer and leader of criminal activity that involved five or more participants or was otherwise extensive. Accordingly, a 4-level increase is required by U.S.S.G. § 3B1.1(a). • Role Adjustment: The defendant misappropriated customer deposits that had been entrusted to him and FTX as part of the wire fraud scheme. Therefore, he abused a position of private trust in a manner that significantly facilitated the commission of the offense; a 2-level increase is required by U.S.S.G. § 3B1.3. • Abuse of Trust Adjustment: The defendant willfully obstructed and impeded, and attempted to obstruct and impede, the administration of justice with respect to the investigation, this prosecution, and sentencing in several manners. First, as the PSR notes and as discussed above, the defendant instructed employees to set Signal messages to auto-delete to evade law enforcement scrutiny. (PSR ¶ 85). Second, as discussed above, on two occasions the defendant attempted to tamper with potential trial witnesses. Third, the defendant perjured himself when he testified which, as discussed herein, is a basis to impose the adjustment for obstruction of justice. Accordingly, a 2-level increase is required by U.S.S.G. § 3C1.1. • Obstruction of Justice Adjustment: Because at no time has the defendant clearly demonstrated acceptance of responsibility for the offense, there is no offense level decrease under U.S.S.G. § 3E1.1. • No Acceptance of Responsibility: Based on the foregoing, the adjusted offense subtotal is 60. Because any offense level in excess of 43 is treated as an offense level of 43, 43 is the total applicable offense level. (PSR ¶ 89). The defendant’s criminal history score is zero, which puts him in Criminal History Category I. (PSR ¶ 92). Based upon these calculations, Bankman-Fried’s advisory Guidelines imprisonment range is life. (PSR ¶ 129). However, because the statutorily authorized maximum sentence is 110 years’ imprisonment, which is less than life imprisonment, the applicable Guidelines sentence is 110 years’ (1,320 months) imprisonment. U.S.S.G. §§ 5G1.1(a), 5G1.2(d). Continue Reading . Here [1] The base offense level is not 7 because money laundering is not an offense referenced to U.S.S.G. § 2B1.1. [2] At the time the PSR was drafted, the Probation Department did not have the victim impact information that is the basis for an enhancement under this section of the Guidelines. About HackerNoon Legal PDF Series: We bring you the most important technical and insightful public domain court case filings. This court case retrieved on March 15, 2024, from is part of the public domain. The court-created documents are works of the federal government, and under copyright law, are automatically placed in the public domain and may be shared without legal restriction. storage.courtlistener Lead image . source

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