Below is my column in the New York Post on the potential liability of the parents of Sam Bankman-Fried. It is not uncommon for federal prosecutors to go after family members to induce a plea by a defendant. In this case, the reported involvement of the parents in some of operations or payments magnifies that risk.
Here is the column:
As Sam Bankman-Fried faces an eight-count indictment for his alleged massive crypto-fraud, his case could take a sudden turn toward resolution. The prosecutors may have the ultimate inducement for a plea to dangle over Bankman-Fried — actually two: Bankman and Fried.
SBF, as he’s known, is not the only person at risk here, particularly with prosecutors making repeated references to unnamed “co-conspirators.” Two at risk could prove his parents, Joseph Bankman and Barbara Fried. While there’s no proof of criminal acts on their part, Bankman-Fried surprisingly involved his parents in aspects of his alleged fraudulent operation.
If so, the case could bring new meaning to the doctrine of in loco parentis, when people act “in place of a parent” or “instead of a parent.” Federal prosecutors are notorious for targeting family members as a quarry’s vulnerability; do they see such an opening in Bankman-Fried’s parents’ role in litigating this massive alleged fraud?
Both parents of SBF and his close associate and ex-girlfriend, Alameda Research head Caroline Ellison, 28, are professors at leading universities. Ellison’s parents are Massachusetts Institute of Technology professors; Bankman-Fried’s parents are Stanford Law professors. Both children are obviously bright, precocious “fac brats” who spoke of using investments for good deeds. Ellison has said she had only one job before moving over to Alameda and finding herself making huge decisions.
Ellison is an obvious target for a cooperation agreement, and her counsel may be moving quickly to get her a chair before the music stops on the next round of indictments.
The more intriguing prospect, however, is using SBF’s parents as his most vulnerable pressure point. The Justice Department has previously targeted family members, as in the Michael Flynn case, to muscle defendants into pleas. While we’ve seen Justice give targets sharply different treatment in past cases, there’s ample reason for the parents to be concerned.
Joseph Bankman, a longtime Stanford Law School tax professor, was a paid employee of his son and helped promote the company. He spent considerable time in the Bahamas with Sam during the critical periods of alleged fraud. He and his wife may have benefited from some of the lavish expenditures the Justice Department cited in its indictment, including staying in a $16.4 million house in Old Fort Bay, a gated community in Nassau.
Stanford Law prof Barbara Fried didn’t appear to work for the company but reportedly used money from her son in her Democratic political-advocacy network. Fried, 71, resigned last month as board chairwoman of a political-donor network, Mind the Gap, which she’d helped start to support Democratic campaigns and causes.
Fried, who retired this year from Stanford, is an expert on the intersection of law and philosophy. She has notably written about effective altruism, the charitable movement her son and Ellison embraced. SBF pursued effective-altruism models while studying at MIT and later co-founded Alameda. The left heralded Bankman-Fried as showing that effective altruism had “real and growing political power, and an increasing ability to noticeably change the world.”
The inclusion of a federal election campaign financing charge only magnifies questions over Fried’s work. It’s not clear if the alleged use of false donor names included Mind the Gap donors or if Fried was aware of such alleged unlawful efforts. The couple’s spokesperson denied any involvement in the underlying matters relevant to the indictment.
The parents have the misfortune of looking like the type of low-hanging fruit prosecutors find irresistible. In an ordinary case, they would be on top of the targets list. Reports the parents are concerned they could be financially ruined by legal costs may only increase the interest in using them to pressure their son.
Other family members could also be subject to investigation, including Bankman’s sister, Barbara Miller, who works in Florida as a Democratic political consultant.
Again, it’s not clear if Justice will prove as aggressive in pursuing such collateral figures as it did with defendants like Michael Flynn. But it would likely take little to induce a plea given the weight of the evidence against Bankman-Fried.
One benefit is that a plea would make fast work of the case without a messy, drawn-out criminal process. That, however, could draw closer scrutiny. The timing of the indictment remains curious.
The Justice Department charged Bankman-Fried just before he was going to testify under oath for hours on every detail of the case. That is ordinarily a prosecutor’s dream: a potential windfall of self-incriminating statements that are fully admissible at trial. It only needed to wait a few hours but elected to stop the congressional testimony shortly before it was to start.
Pressuring his parents could be the final straw for Bankman-Fried, who is looking at a high likelihood of conviction on counts that can individually bring up to 20 years in prison. While offenses are likely to run concurrently, he can count on little sympathy from a sentencing court if convicted.
That is why a plea “in place of his parents” may be the one prospect SBF has to eke out an “effective altruistic” element to his criminal charges. This movement is based on the notion of “using evidence and careful reasoning to work out how we can do the most good with our limited resources.”
Bankman-Fried reportedly claims he is down to just $100,000 of cash in his bank. His “limited resources” may be reduced to his ability to assume the costs for others, particularly his parents. After wheeling and dealing in billions, SBF has become his own sole remaining asset. That is why the Justice Department just might offer him one final “effective altruistic” moment.
Jonathan Turley is an attorney and professor at George Washington University Law School.
Sarcasm aside. IMHO he wat grabbed by the DOJ to sequester him from testifying before Congress. Too much information that The Hill did not want to come to light. Congress (Dem and Rep) and the Executive. Plea will be contingent on a gag. I will defer other comments to the Legal Scholars.
SBF PARENTS should not escape, they are involved, the father was paid and the mother along with her husband were big Democrat donors and his mother received funds from FTX, according to reports, to use for the Democrats and Democrat causes. Also, noted a report the parents are on one or more of the Bahamian property deeds, one property is worth $16 mil according to reports.
In the clawbacks, FTX Admin. should go after the parents, the properties the parents have deeds on from FTX and the money that was given to them for Political donations to the Democratic Party and their causes.
I don’t believe SFB’s parents are innocent and his father was actively involved in his son’s businesses. LOL, you gotta be outraged by the FAKE altruism of these diehard #Democrats. They were living lifestyles of the rich and famous. No money ever went to help the hungry & poor. Entitled! Arrogance on steroids!
They’re not exactly Charles Manson’s parents (m. Kathleen Maddox | f. Colonel Walker Henderson Scott Sr),
but on par for teaching their child the Trade. [lol: “effective altruism” my ass ! ]
Sam Bankman-Fried’s family reportedly called prison to request vegan meals
By Snejana Farberov | December 15, 2022 9:22am Updated
(Photos of SBF’s Parents incl.)
https://nypost.com/2022/12/15/sam-bankman-frieds-family-requested-jail-serve-him-vegan-food-report/
Who are Sam Bankman-Fried’s parents? Meet law professors Joseph and Barbara
By Katherine Donlevy | December 14, 2022 6:24pm Updated
https://nypost.com/2022/12/14/who-are-sam-bankman-frieds-parents-meet-joseph-and-barbara/
Bernie Madoff would be proud.
To be fair, crypto risks were always closer to a Las Vegas casino than a blue-chip stock on the stock market or an FDIC insured savings account at a bank.
I think there is a disclaimer before buying crypto, that it’s a high risk venture and you may lose all of your money. Successful investors simply never invested in crypto for that very reason. Although he allegedly mismanaged funds, not sure that was very well regulated either in the crypto investing.
Conventional banks and conventional investment companies receive regular monitoring by federal agencies to prevent them from getting into these situations.
This stuff usually happens after Republicans in Congress defund regulation or dismantle laws like the Glass-Steagal Act. Maybe Congress should investigate the roulette wheel at a Las Vegas casino as well?
What a tangled web of moral and political corruption that Left has created. They assume high academic positions and preach to students about the Left’s “altruism” (and by inference the selfishness of other Americans). Then their children feel empowered to cheat thousands of ordinary people (a/k/a “suckers”) out of millions of dollars. Then the purloined money is fed to the Democratic Party. Then the Democratic Party uses the money to win elections and stay in power, from which positions they condemn us as selfish. Then, when the fraud is uncovered, the Justice Department, now controlled by the Democratic Party, protects the dishonest children from facing full public investigation and punishment, and Democratic-appointed judges will let them do it. Of course, the Democrat Party returns none of the money, but they and their journalistic allies continue to assume a stance of moral superiority. It is almost a farce.
How can it be called effective altruism if the practitioners are effectively immoral or amoral. Totally agree that it’s only altruism if you risk what you own. Thats different from congress which spends everyone else’s money with no moral qualms at all. These people are decadent and degenerate. Personally I would lock them all in stocks on the Washington Mall for 30 years apiece. Humiliation should always be apart of punishment. I’m no looking for rehab. I don’t think they deserve it.
Also the best way to punish the Rich is to make them poor.
GEB,
I would agree with you, but as we have seen, even useful idiots will be protected by the DNC.
As far as I know, the DNC is not in the altruism business.
If I understand Prof Turley correctly, and I think I do, he is suggesting Federal Prosecutors themselves, in some strange twist of fate, will be standing ‘in loco parentis’ for young SBF. .. “If so, the case could bring new meaning to the doctrine of in loco parentis, when people act “in place of a parent” or “instead of a parent.”
Every rancid form of machine politic and CYA is involved.
A lot of investor money is involved and the DNC should be civilly liable.
More than blowing a kiss.
The defense and the progressive prosecutors both have an incentive to reach a deal, no court evidence. SBF will get a slap on the wrist.
I fail to understand why the prosecutors would need additional ‘leverage’ or ‘incentive’ to reach ‘a deal’? The facts of FTX failure are uncontested.
*Shaq, and I think he speak for everybody involved, was only a ‘paid spokesperson’.
Evidence needs to be presented at trial. I have no doubt of the political nature of garland, and I have no doubt he would do anything to prevent bad press for progressives. No trial, no public evidence.
I personally would like to know how, when the Bidens had direct ties to business dealings in the Ukraine, this guy is connected to the Ukraine, Maxine Waters cancels a hearing warranting further questions, and we have been literally shoveling money by the boatload to the Ukraine, where the truth of the matter lies. We may very well all have simply been pawns since Biden was ‘elected’. Pass me my tin foil hat, but something here stinks to high heaven. If this dude doesn’t get to testify, I don’t even know what to say. If you don’t oppose the modern Democratic party, welcome to the 21st century USSR. It begs a great many questions about why suddenly and randomly we are going to begin shoveling money to Africa, where Russia is not an obvious factor. Some of us are not stupid, and neither are we extremists about to take up arms, modern DNC. That people still believe this **** is just beyond me. Please, modern humans: pay attention to something other than the ‘gram, Facebook, or Tik Tok. Reality still exists, and it still has ramifications.
Given the global ramifications and seriousness of the conflict in Ukraine, one would think the Bidens long financial history in Ukraine – both public and private – would be a topic of great public interest in the media. One would be wrong.
At best, one can only find a few remnants of stories on lawless law professors like Prof Turley defending President Trump during the 1st impeachment.
*evidently, a U.S./Nato funded Ukrainian charity ‘Aid to Ukraine’ had an FTX account that converted large amounts of crypto into cash.
There are many fine public servants working at the U.S. Department of Justice – most probably very loyal to their constitutional Oath if Office (federal statute Title 5 US Code 3331). The supreme loyalty oath governing their authority over any citizen.
The DOJ, as a bureaucratic system, will never regain legitimacy until it owns up to it’s lead role in the Bush torture program. It’s been 20 years so it’s time to fess up! The U.S. Department of Justice attorneys knowingly violated Ronald Reagan’s Torture Treaty.
Under Article VI (Sections 1,2 and 3) of the U.S. Constitution, Ronald Reagan’s treaty was (and still is) the “supreme law of the United States” and even codified into federal criminal law.
George W. Bush’s DOJ attorneys knew torture was illegal in the USA, so they simply renamed it non-torture. The DOJ actually green-lighted permission to the CIA and DOD to commit war crimes. The DOJ had way more culpability than the actual interrogators following DOJ legalese.
In other words, once one of the greatest law enforcement agencies in the world, intentionally falsified legal interpretations for political purposes. Today we also know Bush officials intentionally lied and misled the American voters. Not honest mistakes, they knew it was misleading when they said it.
Remember “the worst of the worst” line. Since then more than 90% were released without any charges whatsoever. Apparently not that dangerous after all. Today Guantanamo Bay is the most expensive gulag on Earth (based on the number of prisoners).
Average Americans simply aren’t buying it. DOJ has some major work to do to repair it’s legitimacy.
I truly believe all crypto currencies are a Ponzi scheme. The SEC -Gov’t should have already terminated it. Biitcoin, Bitcoin, Bitcoin What trinsic, intrinsict, tangible, or intangible value does Bitcoin or any crypto currency have? I say de minimus to none. The US Constitution states in Article I Section 8 “Congress shall have the power to coin-mint money and determine the value thereof”. US Gov’t will soon implement the US Digital dollar and render all other cryptocurrencies moot and demised (in the crypt). The US Gov’t will never abdicate this power, is my belief. The only thing backing the US Dollar is an Undeclared bankrupt Nation.
How can it be Effective Altruism when he used Other People’s Money, while helping himself to some pricey real estate? It’s a nice theory I guess but only if you’re using your own money. This kid ripped off a lot of people. On a Madoff scale, I’d put him as worse than Elizabeth Holmes, especially since he was buying influence with the dems, again with other people’s money. He was trying to influence regulation of crypto and their exchanges when he couldn’t even keep simple records of customer accounts that any bookkeeper without the lofty education credentials he has could do in their sleep.
My guess is that some of the missing money was squirreled away in some of the 100+ companies, or at least was funneled through them. It is just a simple embezzlement and that complex corporate structure is suspicious. Rewarding him by giving him a lighter sentence would send the wrong message (donate your stolen funds to politicians and they’ll see that you get away with whatever you want).
To be fair, another FTX employee donated to the republicans (I think that the ratio was $40 million to the dems and $20 million to the reps but that’s just what I read and I have no inside knowledge of this case).
Like virtual reality and artificial intelligence, effective altruism is neither.
Mitch McConnell who is trying to ram the Progressive Omnibus bill through is actually not a Republican. He works for Chucky. Quite obvious. And Boehner was crying over Nancy leaving ….Rinos sell us out everytime. THAT is what the payments are for.
Just for giggles, here’s the FTX 2022 NFL Superbowl commercial.
Roll the video to the 2:25 mark. Yeah, there is Larry David…He’s never wrong about this stuff.
All FTX sleaze and criminality aside, the commercial is great. Full of laughs. The “Are we going to let stupid people vote?” was the funniest. It is also the most accurate comment on the American electorate SBF as the same politicians who are now running away from their cozy, money talks, bendover relationship with SBF will likely be re-elected in 2024.
Members of our government, democrat (Maxine Waters et al) and “republican” (Mitch McConnell et al?), who took payoffs — I mean accepted political “donations” (LOL) — from SBF and/or his associates and coincidentally looked the other way while these massive financial crimes were being committed are certainly lobbying our ethically-challenged DOJ to wrap this scandal up as expeditiously as possible, without the ugly necessity of publicizing the who and how of the payoffs I mean “donations” — so I’d expect a quick conclusion to the criminal case via overly-generous plea deal, followed by heaps of praise for the remarkable efficiency of our illustrious DOJ.
Oh Yea ! like that touch:
“… the doctrine of ‘in loco parentis’, when people act “in place of a parent” or “instead of a parent.”
Like Hunter Biden acting “in place of a parent” Joe Biden.
The “loco” being apt to both.
My first thought have hearing about this overschooled & undereducated adolescence was check the parents because as I noted then and “Felix” repeats “the apple doesn’t fall far from the tree. These overprivileged kids were raised to think of themselves as “hot stuff”, untouchable by anyone. Ain’t so. For every action, there is a reaction…… The parents and their kids will look stylish in orange. Ain’t high priced schooling, underwritten by the feds, great?
The phrase “effective altruism” ends up being ironic in that it is “effective” in making SBF and his “socialist” parents wealthy. It is much more “effective” than it is actually altruistic.
Sammy Scammer is one of those apples that didn’t fall far from the tree.
Dirty. Disgusting. Family.
Actually, I think most reform Jews who have liberal educations believe that their actions are in line with the philosophy of “Tikkun Olam” (which means repair the world) a sentiment held by them that their prog/left actions are in line with a biblical demand to heal the world. Actually they have done more damage in the long view but they are self-righteous in their ideology and cannot contemplate any criticism of their actions.
Just a reminder.
There are two types of people in the US: the protected and the unprotected.
We are seeing that dynamic here.
The Democrat party is protecting its own (see how Gensler has already benefitted).
SBF will pay, but I bet that the price will be smaller than expected.
Monument, it is another example of life here in Doublestandardstan.