https://nypost.com/2023/01/13/...-backdoor-of-credit/

Sam Bankman-Fried ordered the co-founder of his cryptocurrency exchange FTX to create a “secret” backdoor that allowed his hedge fund Alameda Research to borrow $65 billion of clients’ money without their permission, according to testimony over the firm’s implosion.

Gary Wang was told to create a secret line of credit using customer funds from FTX to Alameda, said Andrew Dietderich, an attorney for FTX, in Delaware bankruptcy court on Wednesday.

Dietderich said the “backdoor was a secret way for Alameda to borrow from customers on the exchange without permission.”

Bankman-Fried had moved $10 billion between the two companies, with a further $2 billion still unaccounted for, according to sources cited by Reuters in November.

The lawyer’s testimony corroborates allegations made by the Commodity Futures Trading Commission, the independent federal agency which regulates derivatives such as futures and swaps.

The CFTC accused Wang of creating a “virtually unlimited” secret line of credit. Dietderich’s testimony is believed to be the first time an FTX official has given the line of credit a firm dollar value.

Wang and Ellison have both pleaded guilty to federal charges including fraud and conspiracy. They are cooperating with investigators.

Let's see, it went out the Front Door, the Back Door (a secret one at that) and probably a few side windows we don't know about yet. But hey, Sammy says the moneys all there to repay folks or was..

https://nypost.com/2023/01/19/...lped-dupe-investors/


Sam Bankman-Fried cultivated ties with A-list celebrities, politicians and investors alike — but one power couple in particular was key to boosting his profile in influential and moneyed circles.

Bill Clinton was paid north of $250,000 when he spoke at the disgraced FTX CEO’s Crypto Bahamas Conference in April, sources told The Post. At the over-the-top tropical shindig, the ex-US president along with former UK Prime Minister Tony Blair were famously photographed onstage next to Bankman-Fried, who appeared wearing shorts and a T-shirt.

Shortly thereafter, Bill and Hillary Clinton invited the 30-year-old Bankman-Fried — known as “SBF” in crypto circles — to speak at their annual Clinton Global Initiative in New York — an effective endorsement of the former FTX CEO that played a pivotal role in elevating his reputation among politicians and deep-pocketed investors alike, insiders told The Post.

https://news.yahoo.com/sam-ban...other-172209477.html

FTX wants to know who received potentially stolen funds from FTX, and what communications they had with its executives – but alleges that some potential witnesses aren't playing ball despite requests to cooperate voluntarily.

Sam Bankman-Fried’s mother, Barbara Fried, “has ignored the requests altogether,” the attorneys say, while “the debtors have not received meaningful engagement or any response from [former chief engineer Nishad] Singh or Mr. Gabriel Bankman-Fried,” Sam’s brother.

Discussions with lawyers for Sam Bankman-Fried's father, Joseph Bankman, are "ongoing" and were expected to lead to a consensual outcome, the filing said.

FTX, known in bankruptcy proceedings as the Debtor, alleges that Gabriel Bankman-Fried’s lobbying organization, Guarding Against Pandemics, “purchased a multimillion-dollar property a few blocks from the United States Capital [sic], which the debtors believe was purchased using misappropriated customer funds.”

Fried’s mother's political action committee, Mind the Gap, also allegedly received donations from Sam Bankman-Fried and other FTX staffers, and both parents “resided in a $16.4 million [Bahamas] house titled in their names, despite understanding that the house was ‘intended to be the company’s property’,” the filing said.

Not cooperating, eh? Charge them all with conspiracy, no bail, begin proceedings. Unless someone can point to where the big magical pot of cyber-gold is and can be reclaimed, letting these thieves and leftist supporting turds walk around free is infuriating.

https://www.coindesk.com/polic...r-communication-ban/

Federal prosecutors wrote a letter to U.S. District Court Judge Lewis Kaplan on Friday, requesting that he modify the conditions of Sam Bankman-Fried’s bail to include ban on private communications with current and former employees of FTX and Alameda Research.

The Department of Justice’s (DOJ) request comes after Bankman-Fried reached out to at least one FTX employee – identified as Ryne Miller, the current general counsel for FTX US – to allegedly attempt to influence his future witness testimony.

“I would really love to reconnect and see if there’s a way for us to have a constructive relationship, use each other as resources when possible, or at least vet things with each other,” the DOJ’s letter quotes Bankman-Fried as saying to Miller.

Prosecutors also requested that Judge Kaplan prevent Bankman-Fried from using “any encrypted or ephemeral call or messaging application, including but not limited to Signal.”

In their letter to the court, prosecutors said Bankman-Fried used the Signal app to reach out to Miller, as well as other current and former FTX employees – which prosecutors described as “the very people who until recently were the defendant’s underlings whom he supervised and financially compensated, and who are therefore most vulnerable to intimidation” – asking to talk.

Prosecutors said Bankman-Fried’s message was a thinly-veiled attempt to “influence [Miller’s] potential testimony,” which they described as “particularly concerning” given Miller’s first-hand knowledge of Bankman-Fried’s conduct around the time of FTX’s collapse.

“[Miller] participated in Signal and Slack communications with the defendant and a small group of company insiders during the relevant events of November 2022,” prosecutors said. “In those messages, among other things, [Bankman-Fried] gave instructions for liquidating Alameda’s investments to satisfy FTX customer withdrawals, and indicated that he transferred approximately $45 million dollars of Alamedas funds to FTX US to fill an apparent hole in FTX US’s balance sheet.”

Prosecutors also told Judge Kaplan that testimony from former Alameda Research CEO Caroline Ellison revealed that Bankman-Fried purposely used auto-deleting Slack and Signal messages for work communications because he knew that “many legal cases turn on documentation and it is more difficult to build a legal case if information is not written down or preserved.”

“In fact, the autodeletion of FTX and Alameda’s Slack and Signal communications has impeded the Government’s investigation; potential witnesses have described relevant and incriminating conversations with the defendant that took place on Slack and Signal that have already been autodeleted because of settings implemented at the defendant’s direction,” prosecutors said.

They gave this child billions of dollars to play with? This guy is not acquainted with the real world.

Sam Bankman-Fried thought jail would be 'like The Shawshank Redemption'

What is this guy's age? 12?

Yes, he definitely got to play with all the money because he was connected. That's why I don't feel to bad about the collapse, it was a bunch of rich idiots that wanted to make a quick buck on a ponzi scheme.

several new details of the SBF bail

The home the parents live in is on Stanford owned land.

Were Bankman and Fried ever to sell their house — or were the government to take possession of it, in the event of a bail violation, and then have to sell it — the pool of potential buyers would be limited to other eligible Stanford faculty. Whatever the scenario, a sale would have to go through Stanford.

A judge has ruled the other two people who put up bond need to be named publicly.


And it turns out "Two people whose names are under seal paid $500,000 and $200,000, respectively, to secure his release."

https://www.msn.com/en-us/mone...stanford/ar-AA16UczV

Bankman-Fried's trial is to begin in October

Bankman-Fried's Bail Guarantors Revealed

https://www.zerohedge.com/cryp...-guarantors-revealed

The guarantors were identified in the unredacted bonds as Andreas Paepcke, a Stanford research scientist...

And Larry Kramer, former dean of Stanford law school...

Both Bankman-Fried’s parents teach at Stanford.

Which leaves us with one simple question - how the fuck did these Stanford faculty members get so rich as to guarantee that size of a bail?

Under the terms of the bail package - which prosecutors said was one of the largest pretrial bonds in US history - the guarantors were to be “of considerable means” and one of them couldn’t be a relative.

It turns out, according to Bloomberg reporting, that Kramer and Paepcke had signed on as sureties for separate bonds of only $500,000 and $200,000, respectively.

so much for that $250 million?


More at link.

quote:

how the fuck did these Stanford faculty members get so rich as to guarantee that size of a bail?

^^^^^^^^^^^^^^
Doubt they were NFL draftees, although Stanford has improved. I would guess that Stanford allows for side research gigs which can be quite profitable. In those instance the University gets a taste as well.

quote:

Originally posted by ZSMICHAEL:

quote:

how the fuck did these Stanford faculty members get so rich as to guarantee that size of a bail?

^^^^^^^^^^^^^^
Doubt they were NFL draftees, although Stanford has improved. I would guess that Stanford allows for side research gigs which can be quite profitable. In those instance the University gets a taste as well.

Being able to cough up that much scratch isn't tough at all for most professors in business schools, especially at an elite institution like Stanford.

Their salary from the school is probably quite good and, as ZS said, they are 100% doing side research for companies, which is extremely lucrative.

Not at all out of the ordinary in just about any business school or hard sciences department and, I presume, but have no direct knowledge of, med schools, etc.

They have to fill out disclosure forms, conflict of interest forms, etc.

Ask me how it feels to be the schmuck who has to fill out mountains of that paperwork, but you're the one making $40k/year to teach 4/semester and not a single thing you're signing will ever be relevant to your own personal wealth.

For reference, an ex of mine has a marketing PhD. She started out at $105k/year--and she was the lowest paid marketing PhD that went on the job market that year.

https://lawandcrime.com/live-t...to-watch-super-bowl/

Days after a federal judge roasted the embattled cryptocurrency chief over a suspected violation of his pretrial release, Sam Bankman-Fried is under fire again for using a virtual private network for web surfing.

While the FTX chief’s lawyers claim their client just used the technology to watch the Super Bowl, federal prosecutors are not treating the development as a game.

“Today, it came to the Government’s attention—based on data obtained through the use of a pen register on the defendant’s gmail account—that the defendant used a VPN or ‘Virtual Private Network’ to access the internet on January 29, 2023, and February 12, 2023,” Assistant U.S. Attorney Danielle R. Sassoon wrote in a two-page letter on Monday night. “After learning this, the Government promptly informed defense counsel and raised concerns about the defendant’s use of a VPN.”

For now, Bankman-Fried remains free on a $250 million bond as he awaits trial on wire fraud and campaign finance charges. Prosecutors recently tried to change the terms of that pretrial agreement after Bankman-Fried, also known by his initials SBF, sent a message through the encrypted messaging app Signal to FTX’s general counsel asking to “vet things” through each other.

Senior U.S. District Judge Lewis Kaplan suggested that federal prosecutors were too permissive with SBF’s bond at a recent hearing, where he ordered the parties to agree to a more restrictive agreement. That was before prosecutors discovered that the FTX founder had been using a VPN, which hides a user’s IP address by routing it through a remote server run by the network’s host.

A form of internet cryptography, VPNs have many legal and mundane uses. Journalists use it to protect sources. Privacy-conscious individuals use it to protect their personal data from corporate exploitation, and people living under authoritarian regimes frequently turn to it to avoid government surveillance.

“As defense counsel has pointed out, and the Government does not dispute, many individuals use a VPN for benign purposes,” the government’s letter concedes.

The same technology, however, can also be used to try to elude law enforcement, and prosecutors say that Bankman-Fried’s use of it “raises several potential concerns.”

“For instance, it is well known that some individuals use VPNs to disguise the fact that they are accessing international cryptocurrency exchanges that use IPs to block U.S. users,” the letter states, adding that the technology also represents a “more secure and covert method of accessing the dark web.”

Bankman-Fried’s lawyer Christian R. Everdell suggested that the matter was much ado about nothing.

“Further, we wish to note that, on the specific dates referenced by the Government, our client used the VPN to access an NFL Game Pass international subscription that he had previously purchased when he resided in the Bahamas, so that he could watch NFL playoff games,” Everdell wrote in a reply letter. “On January 29, 2023, he watched the AFC and NFC Championship games and on February 12, he watched the Super Bowl. This use of a VPN does not implicate any of the concerns raised by the Government in its letter.”

Everdell said that his client will avoid VPN use pending further discussions with the government.

“Nevertheless, in order to resolve the matter and as the Government notes, the defense is prepared to adopt a reasonable bail condition that allays any concerns of the Government or the Court about the use of a VPN. Our client will not use a VPN in the interim.”

The parties have asked to extend the deadline for a new proposed bond package until Friday.

https://www.latimes.com/busine...-plea-deal-ftx-probe

Another member of Sam Bankman-Fried’s inner circle nears a plea deal in FTX probe

Nishad Singh has been hammering out a deal with Manhattan prosecutors as they prepare to file fraud charges against him, according to people familiar with the matter. Such an agreement could involve cooperating with authorities and could further isolate Bankman-Fried

As head of engineering, Singh played a major role in the day-to-day operations at FTX. He also had a close personal relationship with Bankman-Fried, living with him in a Bahamas penthouse. Singh was hired at Alameda in 2017 before establishing FTX two years later with Wang and Bankman-Fried. Singh helped write the software that the exchange was built on and contributed to the launch of FTX U.S. in 2020.

If he were to cooperate with authorities, Singh could possibly offer insight into the campaign finance side of FTX, a dynamic that U.S. officials have been looking into. Bankman-Fried’s indictment accused him of violating campaign finance laws.

Singh has given more than $9.3 million to Democratic candidates and committees since 2020, according to filings. In the last election cycle, he shelled out $8 million alone.

Among the largest recipients was Mind The Gap, a political action committee founded by Bankman-Fried’s mother that received $1 million from Singh in April 2021.

Singh also received hundreds of millions of dollars in loans from Alameda Research, according to Bankruptcy Court filings.

xxxxxxxxxxxxxxxxxx

I hope Ellison, Wang and Singh do not all get off, while SBF takes the full hit. All 4 were in this completely

quote:

Originally posted by sdy:
I hope Ellison, Wang and Singh do not all get off, while SBF takes the full hit

If this flock of fuckwit fraudsters doesn't get a sentence that has them eligible Social Security before they are paroled i will be disheartened.

this is why i am worried

https://news.yahoo.com/carolin...t-250-062910768.html

The agreement states that if Ellison fully cooperates with the SDNY's investigation, as well as any other law enforcement agency designated by the office, she won't be further prosecuted criminally except for possible criminal tax violations with regard to the wire and commodity fraud charges that resulted from commingling funds between FTX and Alameda accounts.

The deal does not guarantee that other agencies will not pursue prosecution at a later date.

A court would need to agree to the plea deal for it to be in effect.


plea agreement:

https://www.documentcloud.org/...lison-plea-agreement

https://www.breitbart.com/poli...r-sam-bankman-fried/

Sam Bankman-Fried has been hit with four new criminal charges via a superseding indictment in New York federal court as U.S. prosecutors widen their criminal case against the disgraced FTX co-founder.

The added charges against the Democrat megadonor include securities fraud, conspiracy to commit bank fraud, and operating an unlicensed money transmitting business, the Financial Times reports.

The updated indictment, released on Thursday morning, brings the total number of federal charges against the ex-billionaire to 12.

and now

Former FTX engineering chief Nishad Singh pleaded guilty to fraud as part of a cooperation deal with prosecutors, the third member of the collapsed cryptocurrency exchange’s inner circle to flip against co-founder Sam Bankman-Fried.

https://www.latimes.com/busine...te-takes-a-plea-deal

Singh said at a hearing Tuesday that he was “unbelievably sorry for my role in this and the harm it caused.” He admitted he knew for months that Alameda Research, the exchange’s trading arm, was borrowing billions of dollars in funds from FTX without customers’ knowledge.

“I took actions to make it appear that FTX’s revenues were higher than they were and provided that information to auditors,” Singh told the court, wearing a dark suit and white dress shirt. “I knew my conduct was wrong.”

Singh, 27, pleaded guilty to six criminal counts, including wire fraud, conspiracy to commit securities fraud and a campaign finance law violation, in federal court in Manhattan after making his cooperation agreement with federal prosecutors in the Southern District of New York.

He is the third close associate of Bankman-Fried to plead guilty and sign on as a cooperating witness for the government. Gary Wang and Caroline Ellison pleaded guilty last year to charges in connection to their roles at FTX and Alameda Research and are working with the government. Singh had been negotiating his deal since taking part in a proffer session last month

Also on Tuesday, the Securities and Exchange Commission and the Commodity Futures Trading Commission filed civil lawsuits against Singh. Both agencies alleged that he created software code that allowed FTX customer assets to be transferred to Alameda.

According to the SEC complaint, Singh played an active role in deceiving investors and was aware that Bankman-Fried had directed hundreds of millions of dollars of customer funds to Alameda to be used for loans and venture investments, even as it became clear there was a shortfall because of client money already sent to the hedge fund.

The SEC said Singh withdrew about $6 million from FTX, as the platform neared its implosion, for personal use and expenses, including to buy a multimillion-dollar home and to donate to charity. The CFTC accused him of personally misappropriating millions of dollars of assets, including customer funds, through poorly documented loans from Alameda and improper withdrawals from FTX.

The SEC said Singh is cooperating with its ongoing investigation into the alleged fraud at FTX.

Singh has provided prosecutors with a window into the political donations side of the FTX operation. He had given more than $9.3 million to Democratic candidates and committees since 2020, according to campaign finance filings. In the last election cycle, he donated $8 million.

Among the largest recipients was Mind the Gap, a political action committee founded by Bankman-Fried’s mother that received $1 million from Singh in April 2021.

Last week, federal prosecutors filed four additional charges against Bankman-Fried, accusing him of using FTX executives to make millions of dollars of political donations in hopes of influencing crypto regulation.

Singh joined Alameda in 2017 and helped write the software on which FTX was built. He also had a close personal relationship with Bankman-Fried, living with him in a Bahamas penthouse.

I hate that all these turds are able to make deals so that they can add another coffin nail to Bankman-Fried‘s wooden box. They should all fry and given the case against them, the government shouldn’t need to cut deals with ANYONE. Every damn one of them was clearly implicit and should go to prison for a very long time for theft of clients monies.

^^^^ Agreed. That's unfortunately what you get when the Fumbling Bunch of Idiots investigates a crime and the Dimwits Out of Justice prosecutes these days.