Caroline Ellison, ex-lover of embattled Sam Bankman-Fried, who was convicted of bilking customers out of $8 billion in a cryptocurrency scheme has begged a federal judge not to put her in prison for her part in the crime.
In a court filing on Tuesday, Ellison’s lawyers asked that she be granted leniency due to how cooperative she has been in building a successful criminal case against Bankman-Fried.
Ellison is a former CEO of Alameda Research, a cryptocurrency trading firm closely tied to FTX cryptocurrency exchange, which was founded by Bankman-Fried and was at the center of the controversy.
Alameda and FTX were accused of financial mismanagement, including using customer funds for risky trades which led to billions in losses.
“From her first meeting with prosecutors, Caroline unflinchingly acknowledged her own wrongdoing. She time and again proved herself an enormously credible and important cooperating witness,” her lawyer, Anjan Sahni wrote in the filing.
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Ellison, 29, is due to be sentenced on Sept. 24.
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No risk of re-offending
The Tuesday filing recommends that the court’s Probation Department give Ellison a sentence of “time served with three years of supervised release” as a credit to her “extraordinary cooperation with the government” and “her otherwise unblemished record.”
Her lawyers also recommended, after citing Ellison’s ethics and integrity, that she not be fined.
“Caroline poses no risk of recidivism and presents no threat to public safety,” the filing says. “It would therefore promote respect for the law to grant leniency in recognition of Caroline’s early disclosure of the crimes, her unmitigated acceptance of responsibility for them, and — most importantly — her extensive cooperation with the government,” the filing added.
John Ray, FTX CEO who has been working to move the firm through the bankruptcy process called Ellison’s cooperation “valuable” and that it helped his team protect and preserve “hundreds of millions of dollars” in assets, NBC News reported.
Ray said Ellison’s cooperation helped him find cryptocurrency wallets that contain “estate assets, DeFi positions, FTX exchange internal account information, the use of third-party exchanges for pre-petition trading, and pre-petition auditing practices.”
The sprawling 67 page document describes Ellison’s earliest days in Boston up to her troubled romance with Bankman-Fried.
It says during her time with Bankman-Fried, she “moved around the globe at his direction, first to Hong Kong and later the Bahamas,” where they “worked long, stressful, Adderall-fueled hours.”
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Bankman-Fried serving 25 years
Bankman-Fried, after living a luxurious life in the Bahamas on his customers’ dime, and enjoying the reputation of a charitable, politically involved crypto entrepreneur is now serving a 25-year prison sentence following his conviction last year in a case prosecutors called one of the largest financial frauds in U.S. history.
Bankman-Fried’s sentence does not bode well for Ellison.
In December, 2022, just over a month following the collapse of FTX, Ellison pleaded guilty to fraud and conspiracy charges.
At Bankman-Fried’s trial she, along with two other former colleagues, testified that Bankman-Fried instructed them to use FTX customer funds to make up for losses at his cryptocurrency hedge fund, Alameda Research, the fund where Ellison was chief executive.
During the trial, Ellison provided intimate details into how Bankman-Fried thought about how he conducted his businesses and himself.
She said Bankman-Fried thought of himself as a “utilitarian” who believed doing the greatest amount of good for people was much more important than following basic tenets like “don’t lie” and “don’t steal.”
Another former FTX executive, who was not not cooperative, Ryan Salame, was sentenced to seven years and six months in prison last May after he pled guilty to making unlawful campaign donations to causes supported by Bankman-Fried.
Two other FTX executives, Nishad Singh and Gary Wang, are scheduled to be sentenced concerning their role in the fraud on Oct. 30 and Nov. 20 respectively.
