Caroline Ellison, the important thing witness within the trial of her ex-boyfriend, FTX founder Sam Bankman-Fried, was sentenced by a New York federal court on Tuesday to 2 years in prison and an $11 billion tremendous for her role in the huge fraud and conspiracy that brought down the once $32 billion cryptocurrency exchange.
The prison sentence was significantly harsher than the suggestion of the Federal Parole Board, which sentenced Judge Lewis Kaplan Ellison, who ran the Alameda Research hedge fund, to a few years of probation without prison time. Defense attorneys had also asked for a jail sentence without prison time for Ellison.
Alameda received much of the $8 billion in customer funds that Bankman-Fried stole from FTX. The stolen money was used for Alameda's trading operations and other purposes.
While Kaplan praised Ellison for her extensive cooperation with prosecutors – which led to Bankman-Fried's conviction – the judge said her sentence should deter other potential wrongdoers from committing fraud.
The judge said the FTX case was likely the most important financial fraud in U.S. history and due to this fact he “could not agree to a literal carte blanche for prison break,” Kaplan said outside U.S. District Court in Manhattan, where Ellison's parents and two sisters watched from the courtroom gallery.
“I have met many cooperators over the years, but never one like Miss Ellison,” said Kaplan, who also said he believes Ellison is sincerely sorry for her crimes and that her cooperation has taken a fantastic emotional toll on her.
Assistant U.S. Attorney Danielle Sassoon urged Kaplan for leniency, citing Ellison's consistent honesty but refusing to downplay her role within the fraud. Sassoon also said she couldn’t overstate Ellison's assist in convicting Bankman-Fried.
Ellison's attorney, Anjan Sahni, urged Kaplan to provide Ellison a second probability, saying she had “rediscovered her moral compass” and “deeply regretted” not leaving the sphere of influence of FTX and Bankman-Fried.
Ellison, her voice shaking and at times crying, read a press release apologizing to the people she had hurt and saying she was deeply ashamed. She also said she was sorry she had not been brave enough to show her back on FTX and Bankman-Fried.
Kaplan allowed Ellison to stay free on bail until she reports to prison on or after November 7.
Ellison reached a Agreement with the Public Prosecutor's Office in December 2022a month after FTX went bankrupt. She pleaded guilty on charges of conspiracy and financial fraud.
Bankman-Fried, nevertheless, opted for a trial and was found guilty on all seven counts of fraud against him. He was sentenced to 25 years in prison in March and in addition ordered by Kaplan to pay $11 billion in fines.
Bankman-Fried has since appealed his conviction and requested a retrial before a special judge, arguing that Kaplan was biased against him.
Two other former FTX executives, Gary Wang and Nishad Singh, are scheduled to be sentenced later this 12 months. Like Ellison, they pleaded guilty fairly than stand trial.
On Tuesday, before announcing the decision to Ellison, Kaplan stressed that although the FTX founder denied any criminal conduct, she had nevertheless cooperated with the authorities.
“Things didn't go so well” for Bankman-Fried, partly due to Ellison's cooperation, the judge said.
Kaplan thanked Ellison for providing prosecutors with seven fake spreadsheets, which he called “one of the most important pieces of evidence in the case” against Bankman-Fried.
Late Monday, Ellison's lawyers said in a court filing that they’d reached financial settlements with prosecutors and the FTX debtor's estate.
The filing didn’t specify how much she would pay under those settlements, that are separate from the forfeiture order, but it surely was already known that Ellison's $10 million price of shares in AI startup Anthropic, which have increased significantly in value since she bought them, make up the majority of her settlements.
Both Bankman-Fried and Ellison faced the identical statutory maximum sentence of about 110 years in prison for his or her crimes.
Defendants in criminal proceedings who cooperate with prosecutors fairly than contesting the fees often receive more lenient sentencing sentences – particularly in white collar crimes resembling FTX.
REGARD: FTX founder Sam Bankman-Fried appeals fraud conviction
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