Former FTX CEO Sam Bankman-Fried faces four additional charges related to the disgraced entrepreneur’s allegedly fraudulent cryptocurrency empire.
Several companies controlled by Bankman-Fried filed for bankruptcy at the end of last year after customers and investors learned that FTX had improperly commingled funds with sister trading company Alameda Research. A superseding indictment unveiled on Thursday adds four new charges, including conspiracy to commit bank fraud and conspiracy to operate an unlicensed money transfer business, to the eight charges to which Bankman-Fried has already pleaded not guilty.
According to the document, the former business leader “falsely represented” his intentions to open a bank account and obtain customer funds for the purposes of trading and market making, as well as knowingly controlled and supervised “an unlicensed money transmitting business affecting interstate and foreign commerce.” The indictment noted that Bankman-Fried sought to “purchase influence over cryptocurrency regulation” at the federal level by “steering tens of millions of dollars of illegal campaign contributions to both Democrats and Republicans.”
Bankman-Fried was previously charged with conspiracy to commit wire fraud, conspiracy to commit securities fraud, and conspiracy to defraud the Federal Election Commission through campaign finance violations.
The indictment unsealed on Thursday added that some political contributions were “made in the names of others in order to obscure the true source of the money and evade federal election law.” Bankman-Fried donated $39 million primarily to Democratic nominees and political action committees ahead of the 2022 midterm elections after emerging as the second-largest donor for the Biden campaign in the 2020 cycle; he was granted four meetings at the White House with senior advisers in the months before his companies filed for bankruptcy.
Beyond using the customer funds to enrich himself, acquire luxury real estate in the Bahamas, and influence the political system, Bankman-Fried donated millions to various media outlets through a nonprofit organization called Building a Stronger Future, which he ran with the help of his brother, Gabe Bankman-Fried, a former Democratic congressional staffer and the director of Guarding Against Pandemics. Several media outlets ran favorable coverage for Bankman-Fried in the days after his empire imploded; The New York Times, for instance, posited in one article that the alleged fraudster merely had “ambitions” that “exceeded his grasp.”
Bankman-Fried is currently staying at his parents’ home in northern California. Mark Cohen, a lawyer for Bankman-Fried who previously defended Jeffrey Epstein confidant Ghislaine Maxwell, initially succeeded in requesting that the identities of two unknown individuals who secured the bond remain sealed; last week, however, court documents showed that Larry Kramer, the dean emeritus of Stanford Law School and president of the William and Flora Hewlett Foundation, and Andreas Paepcke, a senior research scientist at Stanford University, were the two individuals who secured the bond.
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The academics respectively signed bonds worth $500,000 and $200,000, while Joseph Bankman and Barbara Fried, the parents of Sam Bankman-Fried and former Stanford Law School professors, also secured the bond with equity in their home. Bankman-Fried, who claimed that his entire multibillion-dollar fortune evaporated after FTX collapsed, was initially denied bail due to the significant flight risk he posed.