FTX Fiasco Founder SBF Faces Further Fraud Charges

https://www.theregister.com/2023/02/23/sbf_additional_charges_ftx/

FTX founder Sam Bankman-Fried's eight-count indictment related to the collapse of his crypto empire has been superseded by a new 12-count indictment unsealed in New York which provide graphic details about the extent the defunct biz paid off politicians. 

In addition to the eight prior charges, some of which have been modified, federal officials added charges of attempt/conspiracy to commit bank fraud, conspiracy to operate an unlicensed money transmitting business, conspiracy to commit money laundering and conspiracy to make unlawful political contributions and defraud America's Federal Election Commission.

The prior charges were limited to wire fraud against customers; conspiracy to commit wire, securities fraud, commodities fraud, and money laundering; and to defraud the US government and violate campaign finance laws. He denies any wrongdoing.

The new unlawful political contribution charge replaces the prior campaign finance violation charge, though the actual law SBF is being charged with violating in both counts is the same.

According to the superseding indictment [PDF], SBF "corrupted the operations of the cryptocurrency companies he founded and controlled … through a pattern of fraudulent schemes that victimized FTX customers, investors, financial institutions, lenders and the [FEC]."

In other words, as CEO of FTX, Bankman-Fried is accused of illegally siphoning off billions in customer funds – perhaps as much as $8 billion – to bankroll other activities, such as investments made by his hedge fund Alameda Research, among other alleged crimes.

Mr Bankman-Fried's 'straw donors' go to Washington

The latest indictment reveals the full extent to which SBF and his co-conspirators made over 300 allegedly unlawful contributions to politicians and causes on the left and right of the political spectrum. These payments, said to total tens of millions of dollars, were illegal in two different ways, prosecutors now claim: via straw donors, and paid for with funds stolen from his companies.

According to the indictment, SBF "became one of the largest publicly reported political donors for the 2022 midterm elections," but those contributions were only a portion of his actual funding exercise.

The DoJ alleges SBF conspired to keep his donations to Republican candidates quiet, as well as to distance himself from left-wing causes, by making anonymous donations in the names of two unnamed FTX executives, and with FTX and Alameda funds. Those straw donors didn't even support or know the candidates they donated to, the indictment alleges. 

"These straw donations were instead made for purposes of furthering the political agenda of [SBF] while providing him cover to avoid being associated with certain contributions, and concealing that the source of the contributions was in fact Alameda," Uncle Sam said in its new indictment.

One of the FTX executives reportedly expressed discomfort with being used as the public donor to a political action committee supporting pro-LGBTQ issues, according to the indictment. That executive was allegedly told by a political consultant working for SBF that "you being the center left face of our spending will mean you're giving to a lot of woke shit for transactional purposes." The executive reportedly made the donation after agreeing that there was no one at FTX who identified as LGBTQ and was trusted enough to make the contribution. 

Bankman-Fried is still scheduled to go on trial this October.