Former FTX CEO Sam Bankman-Fried arrives for a bail hearing in Manhattan Federal Court on August 11, 2023 in New York.
Michael M. Santiago | Getty Images
Heather Ferguson’s son lost about $130,000 in cash when crypto exchange FTX went bankrupt in November 2022. At the time, Ferguson traveled to where her child lived to spend four days comforting him. Since hitting rock bottom, however, he has shown “resilience,” “confidence” and “a determination to meet life’s challenges ahead with renewed focus and vigor,” Ferguson wrote in a memo to U.S. District Judge Lewis Kaplan on Tuesday.
Modernize: FTX founder Sam Bankman-Fried sentenced to 25 years for crypto fraud, to pay $11 billion in forfeiture
It helps that in January, the entity that oversees the disbursement of FTX customer funds contacted her son that he would be refunded the full amount owed to him.
“I am writing to express my hope that Sam Bankman-Fried will be sentenced to 70 months for his role in the collapse of FTX,” Ferguson wrote in her letter to the judge. “The hope that customers’ funds will be returned to some extent mitigates the seriousness of Sam’s guilt and it seems to me that the length of his sentence should reflect that fact.”
Ferguson’s letter is part of an eleventh-hour push by the defense to appeal to Kaplan’s sense of leniency as the judge prepares for Bankman-Fried’s sentencing hearing Thursday.
In November, a twelve-person panel found the former crypto executive guilty of all seven criminal charges against him, including wire fraud and conspiracy to commit fraud against FTX clients and Alameda Research lenders. conspiracy to commit securities fraud and conspiracy to commit commodities fraud against FTX investors; and conspiracy to commit money laundering.
That the jury was able to reach a unanimous verdict in just a few hours that the former CEO of FTX stole $8 billion from customers of the now-defunct crypto exchange suggests that they were truly convinced and that there were no cases to be swayed, Yesha Yadav, a law professor and associate dean at Vanderbilt University, previously told CNBC.
On Tuesday, the defense filed three letters in support of Bankman-Fried, while prosecutors filed more than 50 letters of their own, bringing the total number of victim impact statements to 117.
The question of whether FTX customers liquidated through bankruptcy should affect the court’s sentencing decision is a major point of contention.
Earlier this month, federal prosecutors in Manhattan wrote in a court filing that Bankman-Fried should spend 40 to 50 years in prison.
“Even now Bankman-Fried refuses to admit that what he did was wrong,” the government wrote.
Although the bankruptcy estate promises to repay customers in full, many of FTX’s thousands of victims (reportedly up to a million) claim that their crypto holdings have been significantly undervalued by the exchange’s new leadership team.
Parents knock
Ferguson was one of three concerned parents who wrote Kaplan, suggesting that Bankman-Fried’s emotional and behavioral disorders be taken into account as part of his sentencing deliberations.
“In the vein of mitigating factors, some mention should be made of Sam’s ASD and the passive emotions that resulted from his ADHD and medication,” Ferguson wrote. “These are significant factors in his history that likely caused him to exercise poor judgment, but were not likely associated with an intent to be malicious to his clients.”
Bankman-Fried’s psychiatrist, George Lerner, told Judge Lewis Kaplan in a letter in August that the former FTX CEO has a history of depression and attention-deficit/hyperactivity disorder. ADHD is one of the most common neurodevelopmental disorders in children.
“Additionally, there were times when Mr. Bankman-Fried did not have access to the Emsam patch (usually when he was traveling/abroad) and exhibited symptoms of depression, including lethargy, anhedonia, low motivation, and increased rumination,” Lerner wrote.
Without his medication, Lerner warned the judge, “Bankman-Fried will experience a return of his depression and ADHD symptoms and his ability to assist in his defense will be severely impaired.”
Maria Centrella, mother of a 34-year-old son with Asperger syndrome, also wrote to Judge Kaplan to share her experience of raising a child on the autism spectrum.
“I have no opinion as to his guilt or innocence under the law, but I want to share with you my experiences with my son which I hope will give you some pause to think about Sam’s behavior and state of mind before and during the trial. ” wrote Centrella, who says she wasn’t familiar with Bankman-Fried’s story until she watched Michael Lewis’ “60 Minutes” interview, in which he shared anecdotes from shadowing Bankman-Fried as part of a book report for his life.
“As Sam described, I saw my son and I kept wondering why Asperger’s never came up in the department because those of us who knew about it could see his behavior, his mannerisms… and his brilliance… as huge indicators of his that it was on the spectrum,” Centrella wrote.
He went on to say that he contacted Bankman-Fried’s father, Joe, who confirmed that Sam had indeed been diagnosed as being on the autism spectrum and that the court had been informed.
“I have no idea how familiar you are with Asperger’s, especially those who work and support themselves, but I can say from experience that the minds of those on the spectrum work differently. Although I have never met Sam, I firmly believe that while he may be an MIT graduate — he didn’t fully understand the scope of what was going on and had no malicious intent,” he wrote.
Matt Kelly, who also has an autistic son and has worked as a special needs teacher in the UK, wrote a three-paragraph letter to share his personal and professional observations which “may be taken into account when a proposal is decided”.
“Many of Sam’s personality traits suggest some type of atypical neurological processes, whether it’s a tendency to avoid eye contact, a habit of not being able to focus on one thing at a time, or a lack of emotional response in a situation where most people would show outward signs stress and anxiety,” Kelly wrote.
“He has also seen his ex-partner and associates testify against him in court and in a
person with unusual processing, this may have caused confusion and disruption,” added Kelly. “I hope that Sam’s abnormal presentation will be taken into account in your sentencing so that the punishment is commensurate with the degree of culpability and takes into account what type institution would be more appropriate in the case of someone like Sam.”
MIT roommate: Did shared laundry on time
Two of Bankman-Fried’s former friends and roommates at the Massachusetts Institute of Technology also filed character reports on his behalf.
Daniel Grazian, who graduated in 2013, says he knew Bankman-Fried “well” for three years.
“Sam was a kind friend and a wonderful person,” Gracian wrote in his letter to the court.
He goes on to say that Bankman-Fried “felt deeply about every living thing, including farm animals” and that his portrayal as “motivated by greed” was “totally inconsistent” with the Sam he knew.
“I believe that if Sam is given a lenient sentence, it will be an asset to society. If the fact that I continue to limit my meat consumption for ethical reasons is any indication, Sam will continue to inspire others to be a little kinder and kinder,” he concludes. Gratian’s letter.
Another classmate, Adam Hesterberg, who was part of the 2018 PhD class, knew Bankman-Fried before MIT, starting at a math boot camp in 2007.
“In the time I knew him, Sam was responsible, fun to be around, and cared about doing good for the world,” Hesterberg wrote in a letter to the judge.
One example she cited was Bankman-Fried’s role in doing housework.
“Sam did his chores, usually washing the pots and pans we use to cook our meals and doing our kitchen laundry. He was doing so well and on time. I only noticed him late once when a queue for the washing machine the kitchen washing machine was delayed,” the letter says.
Hesterberg went on to detail other instances of Bankman-Fried’s good nature, including wanting to “reduce the suffering of farm animals” and encouraging his classmates to donate to charities such as the Foundation Against Malaria.
“I don’t know to what extent a character reference from a decade ago should affect Sam’s sentencing, but to whatever extent it does, my impression of Sam has been almost uniformly positive and is an argument for leniency in his sentence,” he concludes. Hesterberg.