> The other payment and loan totals described by FTX yesterday were $587 million to Nishad Singh, $246 million to Zixiao "Gary" Wang, $87 million to Ryan Salame, $25 million to John Samuel Trabucco, and $6 million to Caroline Ellison. Singh, Wang, and Ellison have pleaded guilty to criminal fraud charges and are cooperating with government prosecutors.
SBF running off with $2.2B really makes Caroline's $6m look quaint. I mean, why even go after her for (relative) pennies? The compensation gap between SBF and his underlings just goes to show you that wealth inequality exists even in corrupt organizations. Her charges will be far less, but it goes to show you that even in crime you're being stiffed unless you're at the absolute top of the food chain.
Compared to SBF's 2.2 billion, Singh's 587 million or even Wang's 246 million, a couple of years of jetsetting in private jets and free rent on an apartment is a rounding error.
I wonder why nobody is talking about Trabuco. He was the one Carolina replaced just months away from FTX going down. He is probably more guilty than her. He was however smart enough to see what was cooking and decided to walk away.
Because (potentially) stealing $6 million is still a very large crime in the absolute sense, even if it is smaller than other related crimes. Because it would be bad to alert white-collar criminals to the fact that they can escape prosecution by not being the largest participant in the criminal enterprise. Because $6 million is roughly 1000x larger (not a typo) than the typical bank robbery, which carries a 20-year sentence, and we don't advocate for non-prosecution of $500 bank robberies. Because it's only fair in a justice system that routinely imprisons people for stealing much smaller amounts.
Maybe? I would imagine their case is pretty strong without her flipping on the rest of them. She will get some credit for pleading guilty, but she was CEO of a criminal enterprise while it was actively involved in criminal activity. She's not going to die old in prison, but in all likelihood she will do at least 10-15 years.
As things stand today, she could be sentenced to 110 years for what she's already pled to; she's really got to make the prosecutors happy if she ever wants to live outside again.
There is often lots of evidence in fraud cases of what happened, but the mens rea of knowingly committing fraud is bolstered by having a close partner testify. It can otherwise be difficult for the jury to differentiate negligent incompetence from willful fraud, especially in complex scenarios like most financial fraud.
If I've learned anything by reading Popehat (Ken White), it's that the "faces up to X years in prison" lines you see in news articles are totally uninformative - there's a complex set of sentencing guidelines that determines the actual range of possibilities. I don't know what that range is in this case, but I very much doubt the top end is anywhere close to 110 years.
IANAL but I understand the top end quotes (110 years in this case) are typically available to judges by ordering sentences to run consecutively.
She's pled to a set of felonies that each carry stiff penalties. A judge would apparently be within the law and federal guidelines to decide that an appropriate sentence is somewhere between the sentence for any one of the charges and below the sentence for running all the sentences consecutively. It's really easy to get sentencing guidelines to arrive at over 100 years for multiple felonies, if you stipulate consecutive sentences.
One notable exception to the typical kid-gloves treatment of financial crime syndicates was Bernie Madoff, who was sentenced to 150 years, the top of the sentencing guidelines.
Give her a great deal to make her spill every last detail on camera after rejoicing her sentence will be tiny. Then pass all the details and recordings to the Bahamas and let them extradite her back to fox hill prison to rot for decades. That's what I'd do. "The deal was with the DoJ.... not the Bahamas!!!"
The whole reason that you can make deals is because the other party believes you’ll hold up your bargain. Is it really worth giving up the ability of the DoJ to make all future deals, just to punish someone even more heavily one time?
If doing it once means they gave up the ability, that's already done. DoJ did this exact thing to Paul Le Roux. Got him to admit to murders in exchange for immunity. Now he's subject to extradition to the countries they happened in. His next stop is the Philippines.
The DoJ doesn't typically claim as far as I know that they will stop prosecution in other countries.
I wouldn't call ~20 years into the _future_ "already done". But definitely think long and hard about any agreements you sign in an adversarial situation.
TBH, the guys not even an American so I don't think he really has a right to stay in the country after his sentence is over.
OK so it's fine for DoJ to admit into public record admissions of criminal activity that can be prosecuted internationally, so long as it will be used at some point in the future and it hasn't yet been done? Apply this to Caroline. They can put it into the record so the Bahamas can use it. You say it hasn't been "already done" once they do that so everything is good. Appears we agree.
Allow Caroline to testify in exchange for lenience. Share that... so that at some point in the future she can be extradited. All good now! As far as I can tell your criticism has no practical bearing on achieving these ends.
USA's DoJ isn't in charge of other countries DoJ / equivalents. If you're going to confess to a crime you committed outside of the USA you might want to get that country also to sign onto immunity.
Or you might want to be confessing to a country you're a resident of so that you have actual standing to oppose being extradited.
Our little monkey brains can't really reason about numbers that big. At some point it just becomes $*illions. The Other Guys played with this for comedic effect, but you see the same nonsense everywhere.
Ellison was Bankman's principal co-conspirator, fully aware that Alameda was a bucket shop operating on money unlawfully borrowed from FTX customers, with privileged access to the exchange thus further defrauding customers, and a massive money black whole due to the trades she organized and supervised. This hemorrhaging of money bankrupted FTX in the end, not the occasional billion here and there borrowed by Bankman. Ellison couldn't have not known this state of affairs, yet she kept the lights on and most of her staff in the dark until the very last day when everything started crumbling around her.
She fully deserves to go to jail for a long time, but probably won't since she was smart enough to get the early worm in terms of deals with the prosecution.
> I mean, why even go after her for (relative) pennies?
Because when the feds go after her, she is strongly incentivized to flip, and cooperate in kicking the stool out from under SBF.
And because 6 million is big enough of a fraud that you can do a decade for it in Club Fed all on its own. If that were the only fraud that took place with FTX, she'd still deserve to be fully investigated and prosecuted for it.
> The compensation gap between SBF and his underlings just goes to show you that wealth inequality exists even in corrupt organizations.
Related to this is an interesting piece from Freakonomics[1] about drug gangs. They claim wealth inequality existing in corrupt organizations like drug gangs is a necessity.
> The compensation gap between SBF and his underlings just goes to show you that wealth inequality exists even in corrupt organizations.
In the first Freakinomics book you learn that they once had found the accounting of a major drug cartel in NYC and the wage distribution from shoofer (?) on the street to the refiller, the dealer, the neighborhood lord, all the way to the top manager… was the same as at McDonald’s.
Feels like none of those laws helped, we’re stuck with a “natural distribution”.
> I mean, why even go after her for (relative) pennies?
Because it is still a crime and it would signal other criminals that they can be part of billion dollar scams, make 10s of millions and not be charged of fraud.
We are very lucky that cryptobros are arrogant to the point of having a god complex.
In surgeons it means they have the confidence to perform some of the most difficult tasks a human being can undertake and is a net positive even though it makes them difficult to be around.
With cryptobros it makes them easier to catch after their schemes inevitably blow up because in their arrogance they refuse to consider than anyone could ever be smart enough to catch on to them.
If the surgery is risky but the right thing, you might want people willing to take a risk in the belief they can do it and not ruin some success statistic. Might not be a "god complex" but quite a lot of confidence and ability not to panic.
My dad's surgeon had a god complex and performed a surgery within an hour of getting off a transpacific flight, confident that he'd be immune sleep depravation and jet lag. My dad died because the surgeon cut something he shouldn't have cut. Glad you can walk though.
the wheels of justice move very slowly in the US. in 2014 I worked for a startup where the founder stole all the money and spent it on his lifestyle. he stole roughly 900K.
He confessed via email and I got access to the bank accounts. Took them to the same unit that is going to prosecute SBF. Took almost 4 years for him to plead guilty, he didn't spend a day in prison, and he has his whole life to pay us all back, without interest.
Naturally, he is trying to be a christian influencer in Nashville.
Has anyone else noticed that Sam Trabucco managed to run off without a trace? No one even mentions him much. He was Alameda's former CEO & he resigned just days before FTX collapsed
51 comments
[ 2.7 ms ] story [ 109 ms ] threadSBF running off with $2.2B really makes Caroline's $6m look quaint. I mean, why even go after her for (relative) pennies? The compensation gap between SBF and his underlings just goes to show you that wealth inequality exists even in corrupt organizations. Her charges will be far less, but it goes to show you that even in crime you're being stiffed unless you're at the absolute top of the food chain.
While SBF received much more, I wonder how much in total benefits everyone received. The penthouse, private jets, and vacations probably add up quick.
Because (potentially) stealing $6 million is still a very large crime in the absolute sense, even if it is smaller than other related crimes. Because it would be bad to alert white-collar criminals to the fact that they can escape prosecution by not being the largest participant in the criminal enterprise. Because $6 million is roughly 1000x larger (not a typo) than the typical bank robbery, which carries a 20-year sentence, and we don't advocate for non-prosecution of $500 bank robberies. Because it's only fair in a justice system that routinely imprisons people for stealing much smaller amounts.
As things stand today, she could be sentenced to 110 years for what she's already pled to; she's really got to make the prosecutors happy if she ever wants to live outside again.
Edit: One such article for illustrative purposes: https://www.popehat.com/2013/02/05/crime-whale-sushi-sentenc... . In this case, the news-headline number is "up to 77 years" and the plausible range Popehat calculates is 2-2.5 years.
She's pled to a set of felonies that each carry stiff penalties. A judge would apparently be within the law and federal guidelines to decide that an appropriate sentence is somewhere between the sentence for any one of the charges and below the sentence for running all the sentences consecutively. It's really easy to get sentencing guidelines to arrive at over 100 years for multiple felonies, if you stipulate consecutive sentences.
One notable exception to the typical kid-gloves treatment of financial crime syndicates was Bernie Madoff, who was sentenced to 150 years, the top of the sentencing guidelines.
The DoJ doesn't typically claim as far as I know that they will stop prosecution in other countries.
I wouldn't call ~20 years into the _future_ "already done". But definitely think long and hard about any agreements you sign in an adversarial situation.
TBH, the guys not even an American so I don't think he really has a right to stay in the country after his sentence is over.
[1]: https://en.wikipedia.org/wiki/Paul_Le_Roux#Trial_of_Le_Roux
Allow Caroline to testify in exchange for lenience. Share that... so that at some point in the future she can be extradited. All good now! As far as I can tell your criticism has no practical bearing on achieving these ends.
Or you might want to be confessing to a country you're a resident of so that you have actual standing to oppose being extradited.
I'd argue that it's worse in corrupt organizations. Sometimes much worse.
She fully deserves to go to jail for a long time, but probably won't since she was smart enough to get the early worm in terms of deals with the prosecution.
Because when the feds go after her, she is strongly incentivized to flip, and cooperate in kicking the stool out from under SBF.
And because 6 million is big enough of a fraud that you can do a decade for it in Club Fed all on its own. If that were the only fraud that took place with FTX, she'd still deserve to be fully investigated and prosecuted for it.
Related to this is an interesting piece from Freakonomics[1] about drug gangs. They claim wealth inequality existing in corrupt organizations like drug gangs is a necessity.
[1] https://genius.com/Steven-levitt-the-freakonomics-of-mcdonal...
In the first Freakinomics book you learn that they once had found the accounting of a major drug cartel in NYC and the wage distribution from shoofer (?) on the street to the refiller, the dealer, the neighborhood lord, all the way to the top manager… was the same as at McDonald’s.
Feels like none of those laws helped, we’re stuck with a “natural distribution”.
Because it is still a crime and it would signal other criminals that they can be part of billion dollar scams, make 10s of millions and not be charged of fraud.
In surgeons it means they have the confidence to perform some of the most difficult tasks a human being can undertake and is a net positive even though it makes them difficult to be around.
With cryptobros it makes them easier to catch after their schemes inevitably blow up because in their arrogance they refuse to consider than anyone could ever be smart enough to catch on to them.
Now I can walk.
Hooray for god complexes!
>>>>> I do not want my surgeon to 'have a god complex'.
>>>> My surgeon had (well, has, but also had) a god complex
>>> My dad's surgeon had a god complex
> I have no clue what you're on about and I'm morbidly curious.
Proper nouns are capitalized.
There’s been numerous other scandals where we look back and could say “do you think we’d really be that stupid?”
But then again that’s a cognitive bias, because we only know of the scams/fraud that have failed
Also he should already be in prison, as every second he's not spending there is a second robbed away from his jail time.
He confessed via email and I got access to the bank accounts. Took them to the same unit that is going to prosecute SBF. Took almost 4 years for him to plead guilty, he didn't spend a day in prison, and he has his whole life to pay us all back, without interest.
Naturally, he is trying to be a christian influencer in Nashville.