Caroline Ellison was sentenced Tuesday to two years in prison for fraud and conspiracy to help convict her former employer and ex-boyfriend, disgraced cryptocurrency mogul Sam Bankman-Fried.
Ellison was sentenced in U.S. District Court in Manhattan by Judge Louis A. Kaplan was sentenced to 24 months in prison and ordered to forfeit $11 billion for his role in the collapse of Bankman-Fried’s crypto exchange, FTX. He faced a maximum sentence of 110 years in prison.
Ellison, 29, He accepted the plea to the charges Conspiracy and financial fraud In December 2022A month after FTX went into bankruptcy. He testified for three days against Bankman-Fried last November.
Bankman-Fried was Convicted on all seven counts He was convicted of criminal fraud and sentenced to 25 years in prison. His testimony was the “cornerstone of the trial,” prosecutors filed in court.
Ellison’s attorneys cited his cooperation and asked for time served and supervised release. In a court document filed earlier this month, his attorneys said he quickly returned to the U.S. in 2022 from FTX’s headquarters in the Bahamas and voluntarily cooperated with the U.S. attorney’s office.
He willingly worked with financial regulators to understand what went wrong at Alameda Research, FTX’s sister hedge fund run by FTX and Ellison, the document said.
With an unlimited line of credit from FTX, Alameda Research received $8 billion in FTX client funds, looted by Bankman-Fried, According to federal prosecutors. He then used it for personal expenses, business, Alameda loan payments and political contributions, Ellison and other witnesses alleged.
Seeking a sentence of the term served, defense attorney Anjan Sawhney said Ellison had “restored his moral compass” and was “deeply remorseful” for not leaving Bankman-Fried’s orbit.
Ellison read a statement to the court in which he apologized to those he hurt and expressed shame for his part in the tragedy.
But Kaplan, who described FTX’s collapse as the largest financial fraud ever uncovered in US history, said the defendant could not accept a “written get-out-of-jail-free card”.
He ordered them to surrender to the authorities on or after November 7.
In a 67-page court document filed on September 10, FTX CEO John Ray, who has been guiding the crypto company through bankruptcy proceedings, said Ellison’s government cooperation helped his team “save and protect hundreds of thousands of dollars.” Million Dollars” of assets.
Her lawyers wrote that Bankman-Fried forced her into a kind of isolation that “knocked off” her moral compass. At his direction, Ellison helped “steal billions,” “fearfully knowing that a catastrophic collapse was likely, but fearing that cutting himself off would hasten that collapse.” Her working relationship with Bankmann-Fried was further complicated by their on-and-off love affair.
Ellison’s attorneys said Bankman-Fried convinced her to stay by telling her he loved her and that she was essential to the business’s survival “while he felt she didn’t deserve to be seen in public with him at high-profile events.”
Before its collapse in 2022, FTX was one of the most popular cryptocurrency exchanges in the world and was known for its extensive lobbying campaign in Washington and its Super Bowl business.
Bankman-Fried and other top executives were accused of making risky investments by looting client accounts at money exchanges, buying luxury real estate in the Caribbean, making millions of dollars in illegal political donations and bribing Chinese officials.
Ryan Salem, a former top lieutenant at Bankman-Fried, was the first person on the FTX management team to be sentenced. In May, a judge handed down a seven-and-a-half-year prison sentence and ordered him to pay more than $6 million in forfeiture and more than $5 million in restitution.
Two other former executives, Nishad Singh and Gary Wang, will be sentenced in October and November respectively.
