In a recent court filing, legal representatives for Sam Bankman-Fried, the embattled cryptocurrency entrepreneur, have requested a lenient sentence akin to that of Michael Milken, the infamous "junk bond king" of the 1980s.
This plea comes in stark contrast to the century-long prison term suggested by a presentence investigation report.
Bankman-Fried's attorneys have proposed a prison sentence ranging from 63 to 78 months for his role in the massive financial fraud that occurred at his cryptocurrency exchange, FTX, and its associated hedge fund, Alameda Research. The defense team's filing highlights Bankman-Fried's "neurodiversity," selflessness, and "kindness," while vehemently disputing allegations that his fraudulent actions resulted in billions of dollars in losses for his companies' clients.
In the filing submitted to Manhattan federal court Judge Lewis Kaplan, the defense team stated, "Sam Bankman-Fried has been described as a 'sociopath,' 'a man with no morals, remorse or empathy,' who is an 'an ice-cold manipulator, bully and shameless liar.'" However, they argue that these characterizations fail to capture the true essence of Bankman-Fried.
The defense team maintains that Bankman-Fried, 31, deeply regrets the extensive damage his actions have caused to his former friends, family, partners, colleagues, and the causes he once passionately championed. The filing includes a letter from his mother, Barbara Fried, who asserts that her son is consumed by remorse over his failure to prevent the downfall of FTX and the ensuing damage.
Bankman-Fried has been incarcerated since his bail was revoked in August, eight months after he was indicted on multiple fraud charges related to the dramatic collapse of FTX in late 2022. He was found guilty at trial in November and is scheduled for sentencing on March 28.
The Manhattan U.S. attorney's office, which prosecuted Bankman-Fried, has yet to submit its sentencing recommendation. However, it is anticipated that they will advocate for a significantly harsher sentence than that proposed by the defense team.
In November, U.S. Attorney Damian Williams stated, "Bankman-Fried perpetrated one of the biggest financial frauds in American history," dismissing the notion that Bankman-Fried's actions were driven by altruism. Williams emphasized that the case was fundamentally about dishonesty and theft, for which there is no tolerance.
In their nearly 100-page document, the defense attorneys present a series of arguments aimed at persuading Judge Kaplan to significantly reduce the federal sentencing guidelines, which recommend a prison term of 100 years or more for Bankman-Fried. The defense team, led by attorney Marc Mukasey, described this recommendation as "grotesque" and called for the court to reject the "barbaric proposal" of the Presentence Investigation Report.
The federal guidelines suggest a severe sentence for Bankman-Fried, largely due to the $10 billion loss incurred by FTX and Alameda Research customers, as concluded by the PSR. However, the defense lawyers argue that this loss calculation lacks evidential support, contending that "the most reasonable estimate of loss is zero."
The defense team also dedicated a significant portion of the filing to detailing Bankman-Fried's personal history, psychological makeup, and charitable endeavors. They describe him as a "shy" child who struggled socially and was diagnosed with anhedonic depression in college. The lawyers argue that Bankman-Fried's "neurodiversity" significantly influences how he perceives and is perceived by others.
The defense team also warns that due to his condition, Bankman-Fried is "uniquely vulnerable in a prison population," and that individuals with ASD are often at a significantly higher risk of physical harm and extortion in prison than other inmates.
The attorneys argue that Bankman-Fried is not likely to commit further crimes and has already been severely punished by the poor conditions in the Brooklyn, New York, federal jail where he has been held since last summer.
The defense team urged the judge to consider a sentence similar to that of Michael Milken, who received a 10-year term for his fraudulent activities at investment bank Drexel Burnham Lambert in the 1980s but only served two years. They argue that Milken's early release allowed him to make a positive impact and become a "tremendous force for good in the world."
The defense team concluded their filing by stating, "Given the same chance, Sam would dedicate his post-prison life to charitable works, finding the best ways to help others, and put them into practice, consistent with his commitment to effective altruism."
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