FTX fraud: Bankman-Fried's partner Caroline Ellison gets 2-year jail sentence
Caroline Ellison, a central figure in the prosecution of her ex-partner and FTX founder Sam Bankman-Fried, has been sentenced to two years in prison by a New York federal court. The court also ordered her to forfeit $11 billion for her involvement in the fraud and conspiracy, that led to the downfall of the cryptocurrency exchange. This sentence is notably harsher than what was suggested by the federal probation department.
Judge rejects leniency in sentencing
The federal probation department had recommended that Ellison, who previously managed the hedge fund Alameda Research, be given three years of supervised release without any prison time. This recommendation was also supported by her defense lawyers. However, Judge Lewis Kaplan imposed a stricter sentence to serve as a deterrent for others contemplating similar fraudulent activities.
Cooperation and remorse acknowledged
Judge Kaplan acknowledged Ellison's significant cooperation with prosecutors, which played a crucial role in convicting Bankman-Fried. He also noted her genuine remorse for her actions. Despite these factors, Kaplan stated that the severity of the FTX case, which he described as "probably the greatest financial fraud perpetrated in the history of the US," did not warrant a lenient sentence.
Ellison's plea deal and Bankman-Fried's conviction
In December 2022, Ellison entered a plea deal with prosecutors, admitting to conspiracy as well as financial fraud charges. This agreement came a month after FTX filed for bankruptcy. In contrast, Bankman-Fried chose to contest the charges in court but was found guilty on all seven criminal fraud counts against him. He received a 25-year prison sentence in March, and was also ordered to pay $11 billion in forfeiture by Judge Kaplan.
Bankman-Fried appeals conviction and seeks new trial
Following his conviction, Bankman-Fried has appealed the verdict, requested a new trial, and sought a different judge on grounds of alleged bias by Kaplan. Two other former FTX executives, Gary Wang and Nishad Singh, who like Ellison pleaded guilty instead of standing trial, are due to be sentenced later this year.
