I think this article is "directionally correct", but wrong (or at least misleading) about some key details.
> Instead, Bankman-Fried’s parents promised to pledge their Palo Alto, California, home as collateral. The Palo Alto home is rumored to be worth $4 million. And that is the full extent of the collateral pledged to guarantee the $250 million bond. No other collateral was posted or promised.
The first couple sentences are true: his parents have agreed to convey title to their ~$4M Palo Alto house to the court as partial guarantee of the $250M bond. But I think the last sentence is contradicted by the actual bond agreement:
"2 non-parent sureties to sign bonds in lesser amounts to be agreed to"
> Yes, you read that right. Bankman-Fried walked out of court a free man by signing a piece of paper where he promised to pay the court $250 million if he decides to flee to another country with no extradition.
It is true that this is all that Sam did, but it intentionally fails to mention that 3 (or perhaps four?) additional people have also signed up for the same agreement to be responsible for the gigantic (potentially non-collectible?) amount should Sam disappear. Presumably the hope is that they are able to apply social pressure to keep him from disappearing.
Given that much of the failure of FTX related to overvaluing of collateral, the irony is definitely strong. But I think we should still try to be accurate when pointing out the apparent absurdities. Further corrections of course appreciated if I'm wrong about these corrections.
Edit: dragonwriter points out below that the "2 non-parent sureties" are likely just additional signed surety bonds, and thus the article is probably correct the "no other collateral was posted or agreed to".
Seems like there's a group of people who want him to be obliterated and will be dissatisfied at every step if it isn't mounting his head on a pike. It's honestly one of the more disturbing parts of the story for me.
> group of people who want him to be obliterated and will be dissatisfied at every step if it doesn't result in his head on a pike
He’s a fraudster who was content evading justice in the Bahamas for years to come. Of course there is popular desire for retribution, even beyond that which exists and continues to build against crypto at large.
If you believe he's guilty beyond a shadow of doubt, it shouldn't disturb you that he's on house arrest instead of in prison. His trial will last a year or two, his sentence probably be 10 to life (probably closer to the "life").
> believe he's guilty beyond a shadow of doubt, it shouldn't disturb you that he's on house arrest instead of in prison
I don’t believe in his guilt beyond even reasonable suspicion. I do think he is a flight risk. He is delusional enough to attempt it, and may have the hidden means by which to make it.
> on house arrest, wearing an ankle monitor, and if he flees his parents will never recover financially. What's the problem?
That it’s not a jail. Jails are tougher to get out of than ankle bracelets.
His parents are going to spend the rest of their lives fighting civil lawsuits, if not criminal cases of their own. Losing their home is a matter of time. It is difficult to even say to what degree their plight matters to him.
What do you believe their motivation is for contributing towards his bail based on the consequences they're facing? It seems somewhat strange they didn't say, "nah, lock him up until trial" considering the sword of Damocles above their estate and past performance of the accused.
Some people may see it as unjust that SBF gets to chill in a $4mm Palo Alto house while some of his depositors may not have houses as a result of having their funds stolen by SBF.
That makes sense, but shouldn't impact the decision of the court, since he's presumed innocent.
I'm totally game for working for a more equitable society where everyone gets to live in dignity even if they put their money into bad crypto exchanges though. Let's definitely do that, regardless of what happens in this case.
Why not? He did plenty more harm to plenty more people than many others who had to wait in jail for their trial. I think it's perfectly rational to be upset that someone who destroyed billions in wealth is treated more kindly by the justice system than than people who've done far less damage.
Intentional in the sense that you understand that you are exaggerating and still repeatedly do it. No one is calling for him to be flogged or beheaded in front of the White House. Jailing a fugitive, a flight risk financial scammer is not unreasonable. He was extremely wealthy at one point and so there is a chance he has enough money stashed somewhere to make fleeing a possibility. In addition, defrauding thousands if not millions of people is a heinous crime, for which the perpetrator should not be given any easy treatment. When we ("the society") catch a serial killer, we agree that letting them go free on a negligible bail and an IOU note is not wise.
No, I am not exaggerating while secretly agreeing with you or something. That it may interpretation; you are free to disagree with it, but it's my sincere interpretation. Please avoid supposition about my mind state and intentions, if you want to know something about those subjects, just ask.
We deny bail to serial killers to avoid putting lives at risk, not because they're extra guilty. There's no indication SBF is a danger to anyone around him, and the conditions of his bail include counseling in case he's a danger to himself. Maybe he does have a house in Argentina with a stack of unmarked bills, who knows, but that is that the bond and the ankle monitor are for.
Seems to me that he made chart go up for no reason and everyone was perfectly happy with that, and when chart went down for the same reasons (i.e. fraud/no legitimate reason) then everyone is upset about it.
If people are upset about lesser offenses getting handled more aggressively, they should spend some time lobbying for lesser offenses to get handled less aggressively.
He didn't destroy money, he transferred it from whoever trusted him to the people he bought things from or made losing trades with on the market. He destroyed wealth by directing it away from honest business, and that's very hard to quantify the effects of. If I had to guess how he justifies it all in his head, it's that he was taking money away from the financial sector and giving it to the Future Fund.
This is an absolute guess because I don't know, but I think a lot of it was average joe crypto-curious investors having their money stolen and then given to the smart financial firms who were on the winning side of his secret bad bets. There may also have been some pension fund involvement because they seem to be caught up in this stuff on a regular basis. (Because of the way bonuses work, managers can skim off the top by investing in known Ponzi schemes and taking the credit for the 20% returns. They know they're not going to have to pay those bonuses back when they're inevitably "surprised." This happened with Madoff and was a big contributor to his success.)
This has nothing to do with the chart. FTX terms of service promised that if customers had a simple account, without signing up for higher-risk stuff, then FTX would hold their full assets at all times without putting them at risk.
Then SBF allegedly moved those assets over to Alameda for risky trades, and also pulled some out to buy fancy houses.
It's still early to tell but as far as I can see, there's <$2B of customer deposits missing, and even insofar as those are missing, they have been stolen and not destroyed.
The "billions destroyed" seems more likely to refer to the general "destruction" of nominal wealth which, I posit, wasn't real to begin with.
Where are you getting this $2B figure? The claimed "liquidity shortfall" was $8-10B and most of the assets (MAPS, SRM, OXY, FTT) are worthless. I would expect people in the FTX creditors telegram group for example to post about it if there was news that caused the expected value of our claims to increase from 10-30c to 80c.
He stole like 10 billion dollars from his customers. Not sure how much of it he managed to subsequently destroy vs. successfully convey to other people, but does that matter?
Well one way in which it matters is that destroyed wealth is irrecoverable. It no longer exists. Stolen wealth might still exist somewhere and might be recoverable.
Also is it $10B in stolen deposits?! I seem to be coming across a $1-2B figure but admittedly haven't been following super closely.
Funds misappropriated by Alameda and spent on VC investments may ultimately have become people's salaries. Some politicians have announced their intention to donate an amount of money equal to SBF's contributions of customer funds, but it's unclear whether they mean "donate to my own 501(c)(3)" or "return to FTX to be paid to creditors" and the phrasing certainly sounds more like the former. Most of the funds were probably embezzled (you will hear these people say "loaned" I guess) by FTX/Alameda executives or lost as part of Alameda's trading operations. Recovery of trading losses is extremely unlikely, especially trading losses that occurred long before the bankruptcy on venues other than FTX. SBF and BlockFi are currently arguing that each of them should receive the $441 million of Robinhood shares that SBF purchased using customer funds. "Hackers" stole about $500 million of customer funds from FTX US and FTX Intl immediately following the bankruptcy, and these funds have (mostly?) made their way into RenBTC and been bridged to native BTC and sent to mixers.
Some FTX customers who withdrew funds as part of their normal operations will face clawbacks, and some other FTX customers such as Modulo Capital and @AlgodTrading who have essentially stolen from all other creditors will hopefully also face clawbacks, but the total amount recoverable this way is maybe $1-4 bn, and all of these people are creditors anyway, so giving the money to other creditors doesn't do anything to address the shortfall.
He operated a Ponzi scheme, so yes, he did in fact destroy billions in wealth. What is the evidence to the contrary? The fact that FTX destroyed billions in wealth is not relevant to this trial at all. It’s whether or not he intentionally and maliciously defrauded his customers.
It's not correct that he operated a Ponzi scheme. A Ponzi scheme involves selling people equity, then not actually having the underlying business, lying about returns and paying redeemers using money from other depositors. If I open a bank or "fintech" and let people deposit dollars and just steal their dollars without ever claiming that their balance of dollars has increased, it's not a Ponzi scheme.
It's just clearly not a $250M bond. Almost nothing to do with SBF himself. I mean, also, fuck the guy, but the prosecutors claiming this is a 250M bond are just being absurd. This is a $4M bond, or maybe up to $12M depending on the assets pledged by the lesser guarantors. It's a far cry from $250M claimed by the prosecution.
It is, in fact, a $250M bail bond, people just have a very wrong mental model, based on a bad generalization from an already slightly wrong mental model of the terms when an arms-length bail agent provides surety to the court for the defendant, of what that means.
> people just have a very wrong mental model, based on a bad generalization from an already slightly wrong mental model of the terms when an arms-length bail agent provides surety to the court for the defendant, of what that means.
Are you familiar with the "please don't sneer" guideline?
I don't think "please don't sneer" means "forego all metacommentary," and I didn't interpret this as particularly sneering or mean or rude. Cursory inspection of dang's citing this rule seems to be really broad, really rude snark, I don't think this comment fits the pattern I'm seeing there.
I'd propose our discourse would be hobbled if we couldn't make comments like, "many people in this discussion have misconception X". But perhaps "very wrong mental model" was too many superlatives and "misunderstanding" would've been sufficient.
The guy stole billions from average people AND big time investors (he pissed on both buckets), he then proceeded to make such dumb mistakes that make him seem like it has a borderline mental issue, he also happens to be an absolute zero for charisma. How do you expect someone to sympathize with him, honestly?
He's been charged, there's a mountain of evidence against him, and he's facing trial. That's what my expectations were. I don't think see a need to crank every step of the process up to 11. He's on a conveyor belt leading to a meat grinder.
Is he getting special treatment or do people not have detailed knowledge of how the criminal justice system operates and so are objecting to any perceived leniency at every step?
That judge recused herself because their husband works at a law firm that advised FTX - note the husband did not work with FTX, other people in the same law firm did. We found out about it from the judge, to avoid the appearance of impropriety - not because any impropriety is alleged to have happened. This wasn't even the same judge who approved the bail. I'm not seeing the conspiracy.
This really seems to me like a Thursday in the criminal justice system, with every single step being scrutinized and cast into the worst possible light.
That really makes me wonder if these people have ever followed a rich person's trial before. They all get special treatment. They even get special incarceration.
> People are upset that he is getting special treatment.
He's not, and the perception that he is comes from a misunderstanding of the systems involved, which is why the descriptions of how this is supposedly special treatment or surprising tend to include as the foundation multiple layers of wrong assumptions about how bail works in general.
At least in my circle the people screaming the loudest for his head are the same people that are adamantly opposed to any government regulation of crypto. I think they're just mad that SBF spoiled their get rich quick scheme.
He was pushing for absurd regulations himself, such as KYC for front-ends of decentralised exchanges, so it is no surprise that they weren't his fan. More importantly, people who are in those groups tend to be aware how much he stinks of government corruption given his family ties, religion etc. - so it has always been assumed that he will get unfair treatment - and now it is seemingly turning out to go as expected. He is part of 'the establishment' that acted against the interests of the space. Regulations are also seen as only protecting the interests of the traditional financial system rather than actually protecting people; that's exactly how it seems to go so far
>2 non-parent sureties to sign bonds in lesser amounts to be agreed to
I'll be extremely generous and interpret that as two bonds worth 3.99...M each or the absolute max. value that is less than the 4M house.
Would you extend a 250M credit to someone who offers you 11.8M in illiquid assets? Also, they happen to be the parents of one of the biggest fraudsters in recent years ...
Arguably their careers are now both collectively and irreversibly ruined. Like the Nobel prize winner that invented some major form of fertilizer that turned out to be a nazi
Fritz Haber was not a Nazi. In fact, he was Jewish, and was forced to leave Germany when the Nazis came to power. His involvement with chemical weapons was during WW1; he died in 1934.
Assuming you are talking about Haber, you couldn't be more wrong. He was actually a German Jew (convert to Lutheranism) who was forced out of his position when then Nazis came to power than died en route to Mandatory Palestine in 1934.
He discovered the Haber process around 1911, which was well before WWII and it was intended for fertilizer only. Eventually people realized that mass ammonia production was very helpful for chemical warfare, and many (including French nobel winners like Grignard) engaged in it.
Mandatory Palestine is a new term that has been invented post world war 2. Back then, it was simply a country called Palestine, as can be seen from passports issued in that era.
Like the Weimarer Republik (in reality still called Deutsches Reich in the republic's constitution). Nevertheless, it is useful to disguish historical periods of the country.
> Would you extend a 250M credit to someone who offers you 11.8M in illiquid assets?
The Court is not extending $250M of credit based on the collateral of the house.
The Court is assessing that the combination of the $250M penalty, the security given in the form of the claim on the house, the particular full sureties on the hook, the additional partial sureties on the hook for a lesser amount, and the nonfinancial conditions of bail are sufficient to adequately guarantee SBFs appearance (in part, based on the prosecution also accepting that.)
Given that they know that they cannot collect the full $250M in the event of default, is there a reason that they picked that number? If they had called it a billion or a trillion or a squillion, what would have been different?
Or for that matter, if they had said that the penalty was $0, and that the securities and sureties were sufficient?
Presumably, they'll never find out, so perhaps it's moot. But I feel like there's a legal distinction or rule I'm missing.
> Given that they know that they cannot collect the full $250M in the event of default
I would not assume they know that, or that that is true.
In fact, I think there is plenty of reason to think that:
(1) SBF has control of assets exceeding $250M (not untainted, and they would likely be subject to criminal forfeiture if he was convicted and they were identified, but in the case of flight...), and
(2) He would not necessarily be successful keeping them out of the reach of a default judgement in favor of the US government if he fled justice
> Or for that matter, if they had said that the penalty was $0, and that the securities and sureties were sufficient?
Security and sureties apply to the penalty, and are meaningless if it is zero.
What argument do you think I'm making? The argument I'm trying to make is that an article serving as an explainer of a complex legal topic should be factually correct, even if it complicates the desired narrative. Do you disagree with this?
> Would you extend a 250M credit to someone who offers you 11.8M in illiquid assets?
As to the bigger question of whether this bail arrangement is reasonable, I don't think we have enough information yet. $250M is an arbitrary large number, and I don't think a percentage is important. The real question is whether whatever agreement has been made is sufficient to pressure Sam into showing up for the trial. Personally, I'm worried that he may still have control of sufficient funds that he can afford to flee and repay in excess whoever takes the loss. But depending on who the unnamed unrelated party (or parties?) are, and what other assets are available for collection, maybe this worry is unfounded. I think we should call attention to the possible impropriety of the arrangement, apply pressure to find out the missing details, but reserve judgement until we know more.
> The argument I'm trying to make is that an article serving as an explainer of a complex legal topic should be factually correct
It’s weird that you’re pointing out an irrelevant technical detail which misses the point of the opinion piece. The point is that SBF was able to walk out of jail without paying anything and the author finds this absurd.
The court is not a creditor and your credit worthiness (thankfully for most folks) does not apply in court. The court is taking the promise of property (defined widely) should Sam fail to appear. This system, if the value is high enough, will keep him in the country to face justice.
Phrased another way, we're about to find out if SBF is morally bankrupt enough to take away a huge portion of his parents assets as well.
>Phrased another way, we're about to find out if SBF is morally bankrupt enough to take away a huge portion of his parents assets as well.
If he has hundreds of millions hidden away, he could easily ensure that his parents get some of it later to compensate them.
That said, I don't think he will run. His parents are both Stanford law professors and he has an insane number of connectionsand people that owe him favors. I think he will go to court and put up a very strong defense and end up with around ten years in jail at the end of it all.
Never said it was and the whole point of this is not whether they put some collateral or not.
The whole point is, how come a 250M bail can be secured with a 4M house? That is the whole thing that is driving everyone nuts.
Divide by a thousand and you may be able to get a better graps of it. Imagine you have a bail set for 250k and you tell the judge, well I have this really shitty used car which (may be) worth 4k, you can keep it, but also you can't take it from me now because well, it's my car :). You would stay in jail.
$4K is a little different than $4M. I don't think "everyone" is going nuts over this. Just some subset of people.
It doesn't really look any different than normal bail. Maybe this is many people's first exposure to the concept of bail though. Bail is also not just a dollar amount, it's about convincing the judge you've put forward enough to motivate you to stay.
Well, if I get to put ankle monitors on you, put you under house arrest, confiscate your passport and send you to jail if you don’t make payments on time…creditworthiness might not be the main factor in my decision.
> Which is to say, at least according to the published agreement, it is not true that "no other collateral was posted or agreed to".
This is wrong, a signed surety bond is not collateral, its a binding commitment to liability. Security/collateral for that liability is a separate thing, abd the only security provided is the house.
OTOH, federal law allows fully unsecured, personal bond of the accused if the jidge thinks it is sufficient, so having any security or surety (where this agreement has both) is optional, so really this just seems to be a bunch of people who don’t know how federal bail works being shocked not by something out of norms, but because their understanding of the norms is inaccurate.
Its not an IOU. Bail is not a loan. People often have the model that the premium paid to an arms-length bail agent is a finance charge on a loan, which is (1) not strictly true, because bail agents don't deposit the full bail with the court and get it back, (2) to the extent it is, while not accurate, a not-too-bad loose approximation of how doing business with a bail agent works, since a bail agent is a for-profit business weighing the risk of flight and the cost of recovery and/or bail forfeiture, within state regulations.
But that's not what courts are trying to do with bail, so when you have a bond that isn't from a bail agent, the model that is tolerably-incorrect in the bail agent case becomes wildly inapplicable.
It becomes an IOU if he skips on his court appearance, no? That is, the potential penalty here is an IOU. (You have even described it as a "promise to pay" earlier: https://news.ycombinator.com/item?id=34100971 ) Yes, if he shows up to court, no one pays $250M and everything is great. We are talking about the penalty if he skips. No one has deposited $250M with the courts to be returned when SBF shows up for trial. If he does skips on his court appearance, I find it difficult to believe that anyone will successfully recover anything like $250M from SBF and parents. Which begs the question of what the point of a $250M figure is.
The rest of your comment is just not responsive to my comment? You have replied to several of my comments talking about people in the abstract having "misconceptions" around bail agents, and these responses are wholly unrelated to my remarks, which do not mention bail agents at all and are not about bail agents. So I would appreciate it if you would respond with more specific arguments and leave out the fluff.
> Extending a large unsecured personal bond to a fraudster seems pretty useless and I think laypeople can recognize that.
Almost like there is a reason this is partially secured, not personal (there are additional sureties), and comes with extensive non-financial conditions.
Basically they can ruin his parents if he skips - take everything they own and any bitcoin or other assets up to $250 mil if they find it. They are betting he will not do that. They are trying to publicly appear to be aggressive.
> This is wrong, a signed surety bond is not collateral, its a binding commitment to liability. Security/collateral for that liability is a separate thing, abd the only security provided is the house.
Thanks for the detail. I wasn't sure if the "bonds in lesser amounts" were clearly just signed promises to pay, or might also include additional property bonds. It's the "lesser amounts" that confuses me. Does this mean that the additional signer(s) would not actually be responsible for the full $250M if both Sam and his parents were to flee? If so, this would seem to imply that the court has decided that Sam and his parents have non-tainted assets worth more than $250M, which doesn't match the story we've heard so far.
> this would seem to imply that the court has decided that Sam and his parents have non-tainted assets worth more than $250M,
What I think it actually implies is that the surety given is a condition described by 18 USC § 3142(c)(1)(B)(xiv) and not 18 USC § 3142(c)(1)(B)(xii), and that people forget that (i)-(xiii) are examples of options, but do not limit the discretion provided by (xiv).
Unpacking that, (xii) says that "such surety shall have a net worth which shall have sufficient unencumbered value to pay the amount of the bail bond", while (xiv) says that they can instead "satisfy any other condition".
Does this mean that in your interpretation the headline $250M bail bond number is indeed nominal, and likely no one was required to show that they can actually afford to pay this amount? That if Sam does flee, the court accepts that it will likely collect less than this amount from the signees? And that bail could have just as easily been set at $1B, or $1T with no difference to the court as to his parents' ability to sign for it?
(I added an edit to the thread starter mentioning your correction)
> Does this mean that in your interpretation the headline $250M bail bond number is indeed nominal
Its not nominal, it is substantive: the bail amount is itself a financial condition—the penalty assessed for flight.
Requiring sureties (people who agree to be liable in the event of flight, for the full amount—his parents—or a partial amount—the other sureties—with a process that allows default judgement on prosecution request and irrevocably designates the court as the sureties agent for process, with only what amount to courtesy copies of any notices sent to the surety themselves at the last know address) is a separate substantive condition.
Asset qualification of sureties has a purpose, especially for arms-length sureties, but it is not what makes the bail not-nominal.
> That if Sam does flee, the court accepts that it will likely collect less than this amount from the signees?
I... would not interpret it this way. What I would say is that the court probably expects that the signees so not have nontainted assets sufficient to pay the bail.
However, should SBF effectively flee justice, that would mean the any criminal forfeiture would be avoided or indefinitely delayed, but evading the ability of the US government, when motivated, to enforce a default judgement may be... somewhat more difficult.
(Furthermore, I suspect if any of the involved parties were to be seen to start moving assets to facilitate that—and I would bet there is more than a little attention on that—there would be uncomfortable conversations and prosecution motions to amend bail conditions, at best.)
Still seems like the system is bending over backwards to give him some freedom (and chance to run) before spending the rest of his youth in prison. The alternative is they keep him in jail pending trial if he can't come up with the $25m (10% bond). This is the reality any "normal" criminal would face. Why does he get special treatment?
Agreed, I'd like to see SBF prosecuted as much as anyone else, but I want it to be a legal trial. His statements should be accepted in the most generous possible light, and the case against him should be ironclad enough to hold. (Otherwise there isn't much point to the justice system existing at large).
There isn't much point to the justice system if a rich dude can give them an iou for bond. Do you think if a poor person got 2500 bond they could give the court 4$ and and a im good for the rest of it?
He has a constitutional protection from cruel and unusual punishment. If there's no reason to believe he's dangerous to society, and he's presumed innocent, and we can use a bond to ensure he'll appear, then there's no reason to hold him.
That is really the crux of the matter, and where people are (reasonably) disagreeing with you. Does a $4M bond (from his parents' assets, not his) and a $246M IOU really ensure SBF will show up in court rather than fleeing?
I'm sure it is possible to defeat an ankle monitor in some way, but I really doubt simply knocking it off will work (not to say you can't knock out off, but that this will be detected & interpreted as an escape attempt). The police aren't stupid.
Reading about it a bit, it seems many of them are simple to remove (not sure what kind of monitor SBF is wearing), but that indeed, it will be detected immediately.
There are a lot of people building their understanding of this situation out of breathless headlines and misleading tweets. And I think there's an element of something like, "if he escapes, that means he really was a genius all along, and now I feel a little less bad for losing my money/believing in him".
If staying in jail without bail were considered "cruel and unusual punishment", then it would be unconstitutional for anyone to be kept in jail.
Cruel and unusual punishment does not apply here, and isn't really clearly defined regardless.
I personally agree that not holding him is good fwiw.
However, it also is horribly inconsistent. People who are guilty of driving while black, or non-violent drug offenses, or so on, are given much less generous treatment when it comes to unsecured bail, and when it comes to evaluating if they're a flight risk.
> People who are guilty of driving while black, or non-violent drug offenses, or so on, are given much less generous treatment when it comes to unsecured bail
There's several factors at work here, but the most significant is that most offenders, especially most low-level offenders, are charged in state systems, and most (but not all, and this is changing, erratically) of the state systems rely much more heavily on financial conditions, and on secured bonds as the primary condition, in part due to very intense lobbying by the bail bonds industry to state governments (both directly and using astroturf groups to lobby the citizenry when their position is threatened.)
People held without bond are in that situation for (presumably) extraordinary circumstances. Long history of violent behavior, huge flight risk.
This is a punk (he is a prick) who wouldn't know how to wield a butter knife. He agreed not to have an extradition hearing in the Bahamas. He's hardly a danger to others or a flight risk.
No, he doesn't. If he was some random drug dealer that couldn't make bail he'd wait in jail for trial. The same rules should apply to him. Put up $25m (10%) or wait in jail. The bail amount was set at $250m because he is a substantial flight risk. Sitting in jail awaiting trial is not cruel or unusual. It's extremely common.
No, people who commit street level crimes should be given the same grace he's receiving.
Denying bail because we think this guy is extra guilty (as opposed to, say, because he has a history of domestic abuse, and releasing him could put people at risk) would be cruel and unusual, because it would be discretionary.
The comment you are replying to did not say that he should be denied bail. Only that the rules should apply to him too. 10% is the most common requirement, he didn't meet it.
Where are you getting that "10% is the most common requirement"? I think you may be confusing the common _non-refundable_ amount charged by private bail bondsmen for much smaller bails with an actual court requirement for collateral. Is there a published standard you could point to that shows the amount of collateral typically required by US courts for bails of this size?
Parent is not saying to keep him in jail because he’s “extra guilty.” They’re saying keep him in jail because he can’t pay bail. Basically treat him like everyone else.
For anyone who is not aware, in the US you sometimes have to put up bail money to get out of jail because you are a flight risk or there is a danger you will commit further crimes (assuming you are guilty which is at that point unproven). There are services that do this as a bond, called a bail bond.
You typically don't put up the full amount, maybe 5-10%. The rest of the risk of you not showing up for your trial is assumed by the bail-bondsman or some other intermediary. Since people usually show up it is a good business.
As an aside, the problem with this system-- like a lot of the US justice system-- is that it favors people with wealth.
You also don't have to use the bail bond services if you put up the full bail. But in this case SBF and associates only put up about $4M of the nominal $250M.
It's different from state to state. In IL, for example, (until recently) someone awaiting trail would give the government 10% directly and the state would act as their own bondsman as bondsmen/bounty hunters are illegal. If they were deemed a low flight risk they could also be released on an "i-bond" aka "released on your own recognisance" meaning they're just trusting you to show up to trials.
I said "until recently" because IL became the first state to entirely outlaw cash bail this past election because heavily favors the wealthy and can destroy innocent people's lives while they wait in jail for trial. Now they can only hold someone if they can demonstrate that they are likely to offend again if released.
>As an aside, the problem with this system-- like a lot of the US justice system-- is that it favors people with wealth.
I agree that it favors people with wealth, but don't really see a better solution, if you take that to mean detaining fewer presumably innocent people.
X People are low risk and should are released awaiting trial
Y People seem higher risk but can be made low risk by providing collateral.
It is also not quite universal. Oregon, for example, does not have a private bail bond system. And bounty hunting is illegal here (looking is okay, but you cannot apprehend, you will end up in jail; you must get the local police to intervene).
Are you sure it is just the wealth though? People get denied bail for smaller offenses like stealing from a store, because you know, they look a certain way.
People who get denied bail for robbing a store are very likely not on their first pass through the system. It's the repeat offender part that gets them denied bail. More than likely on the first pass they got RoR. Or their theft was violent. It's not just dollar amounts that count.
Constitutionally the purpose of bail is to ensure they don't flee and aren't a danger to the community while they await trial. It's not supposed to be a punishment since they haven't been convicted of anything yet.
So wealthy non-violent offenders should have the right to sit in lavish homes with an ankle monitor until they are actually convicted.
Can SBF's parents house be sold on the open market? I was under the impression that you could only sell on-campus Stanford houses to other Stanford affiliated people?
"Yes, you read that right. Bankman-Fried walked out of court a free man by signing a piece of paper where he promised to pay the court $250 million if he decides to flee to another country with no extradition. This, of course, is totally absurd."
Whew! This ought to piss off a LOT of people who couldn't afford to pay bails in the range of 1,000s-10,000s of dollars.
250M on a written IOU with (almost) no collateral to back it up, that's insane.
I expect that's because people keep thinking it's some kind of loan. If you can let go of that misunderstanding, then the process does start to make more sense.
It doesn't make sense to people who are too poor to post 5-figure bails. Unless you assume that wealthy people play by a different set of rules. Then it makes perfect sense.
I'm surprised this guy hasn't already fled. How he even allowed himself to get arrested in the first place, crazy. If you lose billions of other people's money, no matter the circumstances, you should immediate proceed to a favorable jurisdiction.
If he could have stashed even $10M he could live very comfortably in many parts of the world. Especially in the crypto world where it's much easier to move money across borders than it used to be, this should have been easy to do. SE Asia has to have at least one country that won't extradite.
So: is the bail surprising? Yes. Is it a travesty of
justice? That’s a philosophical question. Is it legally
wrong, or outside the scope of what can or should happen
under the federal bail system? No.
I want to contrast SBF's treatment at the hands of the government to that of Carl Nelson. This is a name you probably don't know but let me summarize [1].
Nelson was an Amazon employee who worked on securing real estate deals for data centers. Based on an anonymous email sent to Jeff Bezos that Nelson was getting kickbacks on these deals where Amazon was being charged exorbitant leasing fees.
In 2020, the FBI showed up and seized (through civil forfeiture) the bank accounts and assets of Nelson, his wife, several associates and even his lawyers. What prompted this? It came to light later that Amazon's lawyers from a law firm named Gibson Dunn (who have been at the center of many controversies)met with the Department of Justice hundreds of times to get this outcome.
It turns out that the only way Amazon could get out of a bad deal was for someone to be charged with a felony. The one alleged here was deprivation of "honest services". It was on this basis the the FBI seized Nelson's assets. In doing so, Amazon falsely claimed they'd paid $16.5 million they had not paid.
After nearly 2 years and no charges being filed, the government returned a portion of the seized funds. It is alleged that Amazon made false represetnations (an actual crime) to the government and these formed the basis for the warrant to seize these assets. That warrant remains under seal. It's also alleged that Amazon lied about the leases they signed.
So, no charges filed (let alone a conviction) and all these assets seized under civil asset forfeiture, a regime that I personally think should be deemed unconstitutional as a clear Fourth Amendment violation. But alas, it remains the law of the land.
SBF has cleared stolen customer assets as CEO of FTX. Why exactly is the government not seizing every asset he owns, his parents own and his FTX associates own as here there is actually a good case that they are the proceeds of a crime?
I clearly stated I don't support the legal basis for civil asset forfeiture, particularly as its used in the US, specifically without filing charges or that the asset is the defendant so the government can launch a civil action against an asset for being suspected of being the result of a criminal action by its alleged owner.
It's even worse that law enforcement gets to keep the proceeds of seizing assets where there are no charges (let alone convictions) so we've added a profit motive for what should be unlawful search and seizure. Yay capitalism.
But that is the legal doctrine we operated under.
Unlike the Amazon case, there is a mountain of evidence against SBF, the new CEO has no doubt coopearted and provided ample docuemntation, there are 2 cooperating witnesses and charges have been filed. Through ownership of Bahamanian property (and who knows what else) there is a clearly evidence trail between FTX customer assets to SBF and SBF's parents and associates. It is all quite plausibly the proceeds of crime.
Basically, SBF walked into a bank, robbed it and then used the money he stole to post his bond.
SBF's case is not analogous to a bank robber paying his bail out of the duffle bag used in the robbery. It is plausible that SBF had assets prior to misusing customer funds. The presumption of innocence should not just be a nice story we tell ourselves.
That might be the logical position but it isn't the legal position when it comes to criminal proceeds in fraud and other cases.
Imagine you saved $100,000 from working and spending less than you earned, all completely legitimiately and legally. Now imagine that you make another $100,000 from, say, importing and selling a few pounds of cocaine.
You might think the government may come along and seize $100,000 from you. No, they'll seize everything. It's really difficult to separate money and the government won't even try. All of that could be forfeit.
Let me give you another example: imagine you're in charge of purchasing for a company. You send out and pay invoices on that company's behalf. Imagine you skim off the top and add $1,000 in charges or increased prices or fake items to a $20,000 invoice. You send out a $21,000 invoice, keep $1,000 and then pay the company $20,000. This is fraud. Imagine you get caught. You won't be on the hook for $1,000. You may be on the hook for the full $21,000. The entire invoice is fraud at that point.
Now this may seem unfair or unreasonable. I won't argue that. I'll simply say, that's not how it works. So once SBF committed fraud, which seems to be the case, he basically has the reverse Midas touch. Everything he touches from that point becomes tainted and the government and the courts are within their rights to seize it.
If his parents accepted any proceeds of that fraud, even unknowingly, the government can start seizing their assets too. In the Nelson case I talked about originally, the government seized the bank accounts from Nelson's lawyers. Think about that.
As others have commented correctly and more pithily than I have: the issue isn't is civil asset forfeiture justified (it isn't) but why those same rules are being applied inconsistently, much to SBF's benefit as he's walking free today.
It's not that they want the same injustice happening both ways, it's that injustice seems to only happen to poorer less well-connected folk. The justice system is not supposed to favour people based on connections and/or wealth.
There's a reason people say crimes that are punished with a fine are laws that only apply to poor people.
Yes, and there are two ways we can respond to such a discrepancy. But the trend is that people seem more concerned about equity of punishment rather than improving the system for everyone. The words people use when calling out the bias do matter. Instead of asking why this rich person is getting special treatment, we should ask why aren't these poor people also being treated humanely.
You're seeing inconsistent treatment but you're mistaking the cause. SBF gave significantly to both Democrats and Republicans in the last election cycle. He was just more vocal about his Democratic Party contributions. Many (including me) seem to think there's no principle involved in any of this. It was simply an attempt to influence policy and get legislation that favored FTX and hampered or killed his competition. It's cCapitalism 101.
Take the Chevron case I mentioned in another comment. Deputizing an oil and gas law firm to criminally prosecute someone in the US for what they did in Ecuador began in the Trump administration. Biden's DoJ could intercede in the case and dismiss it. But they haven't. So there's no difference here between the two parties.
You'llsee that a lot. When it comes to any issue like this the government (including the White House, Congress and the courts up to and including the Supreme Court) will side with the wealthy most of the time.
Go back and look at any issue you might think is a partisan issue where you think someone is getting persecuted politically and really examine it through the lens of who has the money in that situation. That will determine who these institutions side with more often than not and way more than any supposed political leanings.
>law firm named Gibson Dunn (who have been at the center of many controversies)
Gibson is one of the most respect law firms in the United States. It is certainly possible that they took some sort of nefarious action, but I find that unlikely, and see no suggestion of proof here.
An article quotes this:
>>Carleton Nelson denies the allegations. His lawyers have said in court that broad allowances for outside work in his Amazon employment contract gave him leeway to do business with Amazon clients and customers.
Well, sounds to me like Nelson took the kickbacks and the argument is whether he did a good enough job papering them to look like real transactions.
>> Amazon notes that its initial calculation of damages included damages attributable to inflated rents and fees it had agreed to pay to lessors that were controlled by the defendants.... Amazon has now been able to negotiate amendments to the leases, which has mitigated, but not completely eliminated these damages
So seems like the problem was resolved because the fraud was discovered and remedied, not that there was no fraud to begin with.
> Gibson is one of the most respect law firms in the United States
Notable cases [1] includes:
> The firm is representing Chevron in its long-running, $27 billion environmental dispute in Ecuador
This is the case of Steven Donziger. I highly recommend you look into it because it's another travesty of justice. Donziger helped the Ecuadorian government secure a multi-billion judgement against Chevron for pollution. Chevron responded by finding a judge to appoint Gibson Dunn to engage in private criminal prosecution alleging fraud in the US for a case in Ecuador. Donziger spent years in home detention and had an $800,000 bond for misdemeanour in refusing to turn over his laptop to that court even though said laptop was clear work-product (and thus covered under attorney-client privilege) with the Ecuadorian case.
> The firm represented George W. Bush in Bush v. Gore
Okay...
Here is perhaps the most disturbing entry:
> Gibson Dunn is representing the plaintiffs in Haaland v. Brackeen pro bono in seeking to overturn the Indian Child Welfare Act.
The law firm isn't even paid on this one. Free of charge they are trying to end tribal sovereignty [2].
> Well, sounds to me like Nelson took the kickbacks
Why does it sound that way? No, seriously. Amazon has seemingly made false statements regarding money paid ($16.5m) and kickbacks received without providing any evidence. Any claims they have made would be documented in the affidavit, which both Amazon and the DoJ have fought to keep sealed.
And if that's the case why were no charges ever filed?
This is an opportunity for introspection here. Please, for your sake, ask yourself why your kneejerk reaction here is to side with Amazon.
And yes, I recognize there are other conditions to steer his compliance (house arrest, electronic monitoring, etc), but those would be in place regardless of the bond amount so I consider them independant of my question.
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[ 4.1 ms ] story [ 205 ms ] thread> Instead, Bankman-Fried’s parents promised to pledge their Palo Alto, California, home as collateral. The Palo Alto home is rumored to be worth $4 million. And that is the full extent of the collateral pledged to guarantee the $250 million bond. No other collateral was posted or promised.
The first couple sentences are true: his parents have agreed to convey title to their ~$4M Palo Alto house to the court as partial guarantee of the $250M bond. But I think the last sentence is contradicted by the actual bond agreement:
"2 non-parent sureties to sign bonds in lesser amounts to be agreed to"
This is in all-caps at the middle of page 5 of https://storage.courtlistener.com/recap/gov.uscourts.nysd.59.... Which is to say, at least according to the published agreement, it is not true that "no other collateral was posted or agreed to".
> Yes, you read that right. Bankman-Fried walked out of court a free man by signing a piece of paper where he promised to pay the court $250 million if he decides to flee to another country with no extradition.
It is true that this is all that Sam did, but it intentionally fails to mention that 3 (or perhaps four?) additional people have also signed up for the same agreement to be responsible for the gigantic (potentially non-collectible?) amount should Sam disappear. Presumably the hope is that they are able to apply social pressure to keep him from disappearing.
Given that much of the failure of FTX related to overvaluing of collateral, the irony is definitely strong. But I think we should still try to be accurate when pointing out the apparent absurdities. Further corrections of course appreciated if I'm wrong about these corrections.
Edit: dragonwriter points out below that the "2 non-parent sureties" are likely just additional signed surety bonds, and thus the article is probably correct the "no other collateral was posted or agreed to".
He’s a fraudster who was content evading justice in the Bahamas for years to come. Of course there is popular desire for retribution, even beyond that which exists and continues to build against crypto at large.
I don’t believe in his guilt beyond even reasonable suspicion. I do think he is a flight risk. He is delusional enough to attempt it, and may have the hidden means by which to make it.
That it’s not a jail. Jails are tougher to get out of than ankle bracelets.
His parents are going to spend the rest of their lives fighting civil lawsuits, if not criminal cases of their own. Losing their home is a matter of time. It is difficult to even say to what degree their plight matters to him.
The love of a parent for their son. That's a benefit of doubt I'd need to see extraordinary evidence of sociopathy to discard.
I'm totally game for working for a more equitable society where everyone gets to live in dignity even if they put their money into bad crypto exchanges though. Let's definitely do that, regardless of what happens in this case.
This is my honest read of the situation, you're welcome to disagree. I have no agenda, only an opinion.
We deny bail to serial killers to avoid putting lives at risk, not because they're extra guilty. There's no indication SBF is a danger to anyone around him, and the conditions of his bail include counseling in case he's a danger to himself. Maybe he does have a house in Argentina with a stack of unmarked bills, who knows, but that is that the bond and the ankle monitor are for.
Seems to me that he made chart go up for no reason and everyone was perfectly happy with that, and when chart went down for the same reasons (i.e. fraud/no legitimate reason) then everyone is upset about it.
If people are upset about lesser offenses getting handled more aggressively, they should spend some time lobbying for lesser offenses to get handled less aggressively.
This is an absolute guess because I don't know, but I think a lot of it was average joe crypto-curious investors having their money stolen and then given to the smart financial firms who were on the winning side of his secret bad bets. There may also have been some pension fund involvement because they seem to be caught up in this stuff on a regular basis. (Because of the way bonuses work, managers can skim off the top by investing in known Ponzi schemes and taking the credit for the 20% returns. They know they're not going to have to pay those bonuses back when they're inevitably "surprised." This happened with Madoff and was a big contributor to his success.)
Then SBF allegedly moved those assets over to Alameda for risky trades, and also pulled some out to buy fancy houses.
The "billions destroyed" seems more likely to refer to the general "destruction" of nominal wealth which, I posit, wasn't real to begin with.
Also is it $10B in stolen deposits?! I seem to be coming across a $1-2B figure but admittedly haven't been following super closely.
Funds misappropriated by Alameda and spent on VC investments may ultimately have become people's salaries. Some politicians have announced their intention to donate an amount of money equal to SBF's contributions of customer funds, but it's unclear whether they mean "donate to my own 501(c)(3)" or "return to FTX to be paid to creditors" and the phrasing certainly sounds more like the former. Most of the funds were probably embezzled (you will hear these people say "loaned" I guess) by FTX/Alameda executives or lost as part of Alameda's trading operations. Recovery of trading losses is extremely unlikely, especially trading losses that occurred long before the bankruptcy on venues other than FTX. SBF and BlockFi are currently arguing that each of them should receive the $441 million of Robinhood shares that SBF purchased using customer funds. "Hackers" stole about $500 million of customer funds from FTX US and FTX Intl immediately following the bankruptcy, and these funds have (mostly?) made their way into RenBTC and been bridged to native BTC and sent to mixers.
Some FTX customers who withdrew funds as part of their normal operations will face clawbacks, and some other FTX customers such as Modulo Capital and @AlgodTrading who have essentially stolen from all other creditors will hopefully also face clawbacks, but the total amount recoverable this way is maybe $1-4 bn, and all of these people are creditors anyway, so giving the money to other creditors doesn't do anything to address the shortfall.
It is, in fact, a $250M bail bond, people just have a very wrong mental model, based on a bad generalization from an already slightly wrong mental model of the terms when an arms-length bail agent provides surety to the court for the defendant, of what that means.
Are you familiar with the "please don't sneer" guideline?
I'd propose our discourse would be hobbled if we couldn't make comments like, "many people in this discussion have misconception X". But perhaps "very wrong mental model" was too many superlatives and "misunderstanding" would've been sufficient.
The guy stole billions from average people AND big time investors (he pissed on both buckets), he then proceeded to make such dumb mistakes that make him seem like it has a borderline mental issue, he also happens to be an absolute zero for charisma. How do you expect someone to sympathize with him, honestly?
What would you like to happen then?
This really seems to me like a Thursday in the criminal justice system, with every single step being scrutinized and cast into the worst possible light.
https://www.yahoo.com/entertainment/judge-sbf-case-recuses-h...
Do any of them deserve it?
He's not, and the perception that he is comes from a misunderstanding of the systems involved, which is why the descriptions of how this is supposedly special treatment or surprising tend to include as the foundation multiple layers of wrong assumptions about how bail works in general.
He "stinks of corruption" in part because he's Jewish? How am I meant to interpret this as anything other than bigotry?
>2 non-parent sureties to sign bonds in lesser amounts to be agreed to
I'll be extremely generous and interpret that as two bonds worth 3.99...M each or the absolute max. value that is less than the 4M house.
Would you extend a 250M credit to someone who offers you 11.8M in illiquid assets? Also, they happen to be the parents of one of the biggest fraudsters in recent years ...
Come on, this is ridiculous.
Evidence seems to be building that, if they weren’t complicit, they at least benefited from his fraud.
He discovered the Haber process around 1911, which was well before WWII and it was intended for fertilizer only. Eventually people realized that mass ammonia production was very helpful for chemical warfare, and many (including French nobel winners like Grignard) engaged in it.
The Zyklon B synthesis is a red herring.
The Court is not extending $250M of credit based on the collateral of the house.
The Court is assessing that the combination of the $250M penalty, the security given in the form of the claim on the house, the particular full sureties on the hook, the additional partial sureties on the hook for a lesser amount, and the nonfinancial conditions of bail are sufficient to adequately guarantee SBFs appearance (in part, based on the prosecution also accepting that.)
Or for that matter, if they had said that the penalty was $0, and that the securities and sureties were sufficient?
Presumably, they'll never find out, so perhaps it's moot. But I feel like there's a legal distinction or rule I'm missing.
I would not assume they know that, or that that is true.
In fact, I think there is plenty of reason to think that:
(1) SBF has control of assets exceeding $250M (not untainted, and they would likely be subject to criminal forfeiture if he was convicted and they were identified, but in the case of flight...), and
(2) He would not necessarily be successful keeping them out of the reach of a default judgement in favor of the US government if he fled justice
> Or for that matter, if they had said that the penalty was $0, and that the securities and sureties were sufficient?
Security and sureties apply to the penalty, and are meaningless if it is zero.
What argument do you think I'm making? The argument I'm trying to make is that an article serving as an explainer of a complex legal topic should be factually correct, even if it complicates the desired narrative. Do you disagree with this?
> Would you extend a 250M credit to someone who offers you 11.8M in illiquid assets?
As to the bigger question of whether this bail arrangement is reasonable, I don't think we have enough information yet. $250M is an arbitrary large number, and I don't think a percentage is important. The real question is whether whatever agreement has been made is sufficient to pressure Sam into showing up for the trial. Personally, I'm worried that he may still have control of sufficient funds that he can afford to flee and repay in excess whoever takes the loss. But depending on who the unnamed unrelated party (or parties?) are, and what other assets are available for collection, maybe this worry is unfounded. I think we should call attention to the possible impropriety of the arrangement, apply pressure to find out the missing details, but reserve judgement until we know more.
It’s weird that you’re pointing out an irrelevant technical detail which misses the point of the opinion piece. The point is that SBF was able to walk out of jail without paying anything and the author finds this absurd.
Sounds like something SBF would find reasonable.
Phrased another way, we're about to find out if SBF is morally bankrupt enough to take away a huge portion of his parents assets as well.
huge portion being +/-10x their net worth and a debt that can not be discharged through bankrupcy.
If he has hundreds of millions hidden away, he could easily ensure that his parents get some of it later to compensate them.
That said, I don't think he will run. His parents are both Stanford law professors and he has an insane number of connectionsand people that owe him favors. I think he will go to court and put up a very strong defense and end up with around ten years in jail at the end of it all.
Never said it was and the whole point of this is not whether they put some collateral or not.
The whole point is, how come a 250M bail can be secured with a 4M house? That is the whole thing that is driving everyone nuts.
Divide by a thousand and you may be able to get a better graps of it. Imagine you have a bail set for 250k and you tell the judge, well I have this really shitty used car which (may be) worth 4k, you can keep it, but also you can't take it from me now because well, it's my car :). You would stay in jail.
It doesn't really look any different than normal bail. Maybe this is many people's first exposure to the concept of bail though. Bail is also not just a dollar amount, it's about convincing the judge you've put forward enough to motivate you to stay.
This is wrong, a signed surety bond is not collateral, its a binding commitment to liability. Security/collateral for that liability is a separate thing, abd the only security provided is the house.
OTOH, federal law allows fully unsecured, personal bond of the accused if the jidge thinks it is sufficient, so having any security or surety (where this agreement has both) is optional, so really this just seems to be a bunch of people who don’t know how federal bail works being shocked not by something out of norms, but because their understanding of the norms is inaccurate.
And judge, don’t forget, Mr. SBF voluntarily waived extradition.
But that's not what courts are trying to do with bail, so when you have a bond that isn't from a bail agent, the model that is tolerably-incorrect in the bail agent case becomes wildly inapplicable.
It becomes an IOU if he skips on his court appearance, no? That is, the potential penalty here is an IOU. (You have even described it as a "promise to pay" earlier: https://news.ycombinator.com/item?id=34100971 ) Yes, if he shows up to court, no one pays $250M and everything is great. We are talking about the penalty if he skips. No one has deposited $250M with the courts to be returned when SBF shows up for trial. If he does skips on his court appearance, I find it difficult to believe that anyone will successfully recover anything like $250M from SBF and parents. Which begs the question of what the point of a $250M figure is.
The rest of your comment is just not responsive to my comment? You have replied to several of my comments talking about people in the abstract having "misconceptions" around bail agents, and these responses are wholly unrelated to my remarks, which do not mention bail agents at all and are not about bail agents. So I would appreciate it if you would respond with more specific arguments and leave out the fluff.
Almost like there is a reason this is partially secured, not personal (there are additional sureties), and comes with extensive non-financial conditions.
Thanks for the detail. I wasn't sure if the "bonds in lesser amounts" were clearly just signed promises to pay, or might also include additional property bonds. It's the "lesser amounts" that confuses me. Does this mean that the additional signer(s) would not actually be responsible for the full $250M if both Sam and his parents were to flee? If so, this would seem to imply that the court has decided that Sam and his parents have non-tainted assets worth more than $250M, which doesn't match the story we've heard so far.
What I think it actually implies is that the surety given is a condition described by 18 USC § 3142(c)(1)(B)(xiv) and not 18 USC § 3142(c)(1)(B)(xii), and that people forget that (i)-(xiii) are examples of options, but do not limit the discretion provided by (xiv).
https://www.law.cornell.edu/uscode/text/18/3142
Unpacking that, (xii) says that "such surety shall have a net worth which shall have sufficient unencumbered value to pay the amount of the bail bond", while (xiv) says that they can instead "satisfy any other condition".
Does this mean that in your interpretation the headline $250M bail bond number is indeed nominal, and likely no one was required to show that they can actually afford to pay this amount? That if Sam does flee, the court accepts that it will likely collect less than this amount from the signees? And that bail could have just as easily been set at $1B, or $1T with no difference to the court as to his parents' ability to sign for it?
(I added an edit to the thread starter mentioning your correction)
Its not nominal, it is substantive: the bail amount is itself a financial condition—the penalty assessed for flight.
Requiring sureties (people who agree to be liable in the event of flight, for the full amount—his parents—or a partial amount—the other sureties—with a process that allows default judgement on prosecution request and irrevocably designates the court as the sureties agent for process, with only what amount to courtesy copies of any notices sent to the surety themselves at the last know address) is a separate substantive condition.
Asset qualification of sureties has a purpose, especially for arms-length sureties, but it is not what makes the bail not-nominal.
> That if Sam does flee, the court accepts that it will likely collect less than this amount from the signees?
I... would not interpret it this way. What I would say is that the court probably expects that the signees so not have nontainted assets sufficient to pay the bail.
However, should SBF effectively flee justice, that would mean the any criminal forfeiture would be avoided or indefinitely delayed, but evading the ability of the US government, when motivated, to enforce a default judgement may be... somewhat more difficult.
(Furthermore, I suspect if any of the involved parties were to be seen to start moving assets to facilitate that—and I would bet there is more than a little attention on that—there would be uncomfortable conversations and prosecution motions to amend bail conditions, at best.)
That is really the crux of the matter, and where people are (reasonably) disagreeing with you. Does a $4M bond (from his parents' assets, not his) and a $246M IOU really ensure SBF will show up in court rather than fleeing?
Reading about it a bit, it seems many of them are simple to remove (not sure what kind of monitor SBF is wearing), but that indeed, it will be detected immediately.
Having someone pay attention is also all that you need to prevent the world's most wanted man from hanging himself in a federal prison in Manhattan.
Cruel and unusual punishment does not apply here, and isn't really clearly defined regardless.
I personally agree that not holding him is good fwiw.
However, it also is horribly inconsistent. People who are guilty of driving while black, or non-violent drug offenses, or so on, are given much less generous treatment when it comes to unsecured bail, and when it comes to evaluating if they're a flight risk.
There's several factors at work here, but the most significant is that most offenders, especially most low-level offenders, are charged in state systems, and most (but not all, and this is changing, erratically) of the state systems rely much more heavily on financial conditions, and on secured bonds as the primary condition, in part due to very intense lobbying by the bail bonds industry to state governments (both directly and using astroturf groups to lobby the citizenry when their position is threatened.)
https://constitution.congress.gov/browse/essay/amdt8-2-2/ALD...
States also have their own amendments that can differ on bail as well.
This is a punk (he is a prick) who wouldn't know how to wield a butter knife. He agreed not to have an extradition hearing in the Bahamas. He's hardly a danger to others or a flight risk.
Denying bail because we think this guy is extra guilty (as opposed to, say, because he has a history of domestic abuse, and releasing him could put people at risk) would be cruel and unusual, because it would be discretionary.
You typically don't put up the full amount, maybe 5-10%. The rest of the risk of you not showing up for your trial is assumed by the bail-bondsman or some other intermediary. Since people usually show up it is a good business.
As an aside, the problem with this system-- like a lot of the US justice system-- is that it favors people with wealth.
Wouldn't it be better then to pay the $250 million (if you have it) since you will get all of it back when you show up in court?
Now you understand what business bail bondsman are actually in.
I said "until recently" because IL became the first state to entirely outlaw cash bail this past election because heavily favors the wealthy and can destroy innocent people's lives while they wait in jail for trial. Now they can only hold someone if they can demonstrate that they are likely to offend again if released.
Are you saying they no longer take flight risk into account at all for release?
Do they take any consideration for ability to pay the i-bond?
I agree that it favors people with wealth, but don't really see a better solution, if you take that to mean detaining fewer presumably innocent people.
X People are low risk and should are released awaiting trial Y People seem higher risk but can be made low risk by providing collateral.
Eliminating Y just means more people in jail.
Are you sure it is just the wealth though? People get denied bail for smaller offenses like stealing from a store, because you know, they look a certain way.
Wealth buys comfort.
Constitutionally the purpose of bail is to ensure they don't flee and aren't a danger to the community while they await trial. It's not supposed to be a punishment since they haven't been convicted of anything yet.
So wealthy non-violent offenders should have the right to sit in lavish homes with an ankle monitor until they are actually convicted.
But seriously, there are probably enough people willing to buy that house.
Whew! This ought to piss off a LOT of people who couldn't afford to pay bails in the range of 1,000s-10,000s of dollars.
250M on a written IOU with (almost) no collateral to back it up, that's insane.
Nelson was an Amazon employee who worked on securing real estate deals for data centers. Based on an anonymous email sent to Jeff Bezos that Nelson was getting kickbacks on these deals where Amazon was being charged exorbitant leasing fees.
In 2020, the FBI showed up and seized (through civil forfeiture) the bank accounts and assets of Nelson, his wife, several associates and even his lawyers. What prompted this? It came to light later that Amazon's lawyers from a law firm named Gibson Dunn (who have been at the center of many controversies)met with the Department of Justice hundreds of times to get this outcome.
It turns out that the only way Amazon could get out of a bad deal was for someone to be charged with a felony. The one alleged here was deprivation of "honest services". It was on this basis the the FBI seized Nelson's assets. In doing so, Amazon falsely claimed they'd paid $16.5 million they had not paid.
After nearly 2 years and no charges being filed, the government returned a portion of the seized funds. It is alleged that Amazon made false represetnations (an actual crime) to the government and these formed the basis for the warrant to seize these assets. That warrant remains under seal. It's also alleged that Amazon lied about the leases they signed.
So, no charges filed (let alone a conviction) and all these assets seized under civil asset forfeiture, a regime that I personally think should be deemed unconstitutional as a clear Fourth Amendment violation. But alas, it remains the law of the land.
SBF has cleared stolen customer assets as CEO of FTX. Why exactly is the government not seizing every asset he owns, his parents own and his FTX associates own as here there is actually a good case that they are the proceeds of a crime?
[1]: https://www.bloomberg.com/news/newsletters/2021-03-15/the-st...
I find it utterly strange that people respond to injustice by asking why isn't more injustice being done, you know for equity?
It's even worse that law enforcement gets to keep the proceeds of seizing assets where there are no charges (let alone convictions) so we've added a profit motive for what should be unlawful search and seizure. Yay capitalism.
But that is the legal doctrine we operated under.
Unlike the Amazon case, there is a mountain of evidence against SBF, the new CEO has no doubt coopearted and provided ample docuemntation, there are 2 cooperating witnesses and charges have been filed. Through ownership of Bahamanian property (and who knows what else) there is a clearly evidence trail between FTX customer assets to SBF and SBF's parents and associates. It is all quite plausibly the proceeds of crime.
Basically, SBF walked into a bank, robbed it and then used the money he stole to post his bond.
Imagine you saved $100,000 from working and spending less than you earned, all completely legitimiately and legally. Now imagine that you make another $100,000 from, say, importing and selling a few pounds of cocaine.
You might think the government may come along and seize $100,000 from you. No, they'll seize everything. It's really difficult to separate money and the government won't even try. All of that could be forfeit.
Let me give you another example: imagine you're in charge of purchasing for a company. You send out and pay invoices on that company's behalf. Imagine you skim off the top and add $1,000 in charges or increased prices or fake items to a $20,000 invoice. You send out a $21,000 invoice, keep $1,000 and then pay the company $20,000. This is fraud. Imagine you get caught. You won't be on the hook for $1,000. You may be on the hook for the full $21,000. The entire invoice is fraud at that point.
Now this may seem unfair or unreasonable. I won't argue that. I'll simply say, that's not how it works. So once SBF committed fraud, which seems to be the case, he basically has the reverse Midas touch. Everything he touches from that point becomes tainted and the government and the courts are within their rights to seize it.
If his parents accepted any proceeds of that fraud, even unknowingly, the government can start seizing their assets too. In the Nelson case I talked about originally, the government seized the bank accounts from Nelson's lawyers. Think about that.
As others have commented correctly and more pithily than I have: the issue isn't is civil asset forfeiture justified (it isn't) but why those same rules are being applied inconsistently, much to SBF's benefit as he's walking free today.
There's a reason people say crimes that are punished with a fine are laws that only apply to poor people.
If he was a wealthy donor to Trump in an identical case he'd be rotting in Rikers with no hope of bail.
Take the Chevron case I mentioned in another comment. Deputizing an oil and gas law firm to criminally prosecute someone in the US for what they did in Ecuador began in the Trump administration. Biden's DoJ could intercede in the case and dismiss it. But they haven't. So there's no difference here between the two parties.
You'llsee that a lot. When it comes to any issue like this the government (including the White House, Congress and the courts up to and including the Supreme Court) will side with the wealthy most of the time.
Go back and look at any issue you might think is a partisan issue where you think someone is getting persecuted politically and really examine it through the lens of who has the money in that situation. That will determine who these institutions side with more often than not and way more than any supposed political leanings.
Posters here are merely pointing that out.
Gibson is one of the most respect law firms in the United States. It is certainly possible that they took some sort of nefarious action, but I find that unlikely, and see no suggestion of proof here.
An article quotes this:
>>Carleton Nelson denies the allegations. His lawyers have said in court that broad allowances for outside work in his Amazon employment contract gave him leeway to do business with Amazon clients and customers.
Well, sounds to me like Nelson took the kickbacks and the argument is whether he did a good enough job papering them to look like real transactions.
https://www.geekwire.com/2022/former-seattle-entrepreneur-an...
As for no damages:
>> Amazon notes that its initial calculation of damages included damages attributable to inflated rents and fees it had agreed to pay to lessors that were controlled by the defendants.... Amazon has now been able to negotiate amendments to the leases, which has mitigated, but not completely eliminated these damages
So seems like the problem was resolved because the fraud was discovered and remedied, not that there was no fraud to begin with.
https://twitter.com/Amy_K_Nelson/status/1489227415108919297/...
Notable cases [1] includes:
> The firm is representing Chevron in its long-running, $27 billion environmental dispute in Ecuador
This is the case of Steven Donziger. I highly recommend you look into it because it's another travesty of justice. Donziger helped the Ecuadorian government secure a multi-billion judgement against Chevron for pollution. Chevron responded by finding a judge to appoint Gibson Dunn to engage in private criminal prosecution alleging fraud in the US for a case in Ecuador. Donziger spent years in home detention and had an $800,000 bond for misdemeanour in refusing to turn over his laptop to that court even though said laptop was clear work-product (and thus covered under attorney-client privilege) with the Ecuadorian case.
> The firm represented George W. Bush in Bush v. Gore
Okay...
Here is perhaps the most disturbing entry:
> Gibson Dunn is representing the plaintiffs in Haaland v. Brackeen pro bono in seeking to overturn the Indian Child Welfare Act.
The law firm isn't even paid on this one. Free of charge they are trying to end tribal sovereignty [2].
> Well, sounds to me like Nelson took the kickbacks
Why does it sound that way? No, seriously. Amazon has seemingly made false statements regarding money paid ($16.5m) and kickbacks received without providing any evidence. Any claims they have made would be documented in the affidavit, which both Amazon and the DoJ have fought to keep sealed.
And if that's the case why were no charges ever filed?
This is an opportunity for introspection here. Please, for your sake, ask yourself why your kneejerk reaction here is to side with Amazon.
[1]: https://en.wikipedia.org/wiki/Gibson_Dunn#Notable_cases
[2]: https://lakotalaw.org/news/2021-09-17/icwa-sovereignty
https://twitter.com/whalechart/status/1606293657518080001