Caroline Ellison, the ex-girlfriend and convicted accomplice of disgraced cryptocurrency entrepreneur Sam Bankman-Fried, was sentenced to two years in federal prison on Tuesday in Manhattan Federal Court for her role in the FTX fraud scheme.
The feds asked that Ellison, 29, receive a lenient sentence because of her “consistent” and extensive cooperation in their case against Bankman-Fried, the FTX founder convicted of defrauding his investors to the tune of around $11 billion last year and later sentenced to 25 years in prison. Ellison, who pleaded guilty to fraud and conspiracy charges ahead of Bankman-Fried’s trial, ran FTX’s sister hedge fund, Alameda Research.
Citing Ellison’s “candor and her refusal to minimize her own role or sidestep the most humiliating aspects of her conduct,” Assistant U.S. Attorney Danielle Sassoon said it was impossible to overstate the significance of Ellison’s “critical” cooperation in securing Bankman-Fried’s conviction.
Manhattan Federal Court Judge Lewis Kaplan told Ellison that while she was “gravely culpable,” her testimony over three days of the trial was “remarkable.” Still, the judge said a “get out of jail free card” was not something he could see a path to since the scheme was, “if not the very greatest financial fraud ever perpetrated in this country and probably anywhere else, close to it.”
“She cooperated, and he denied the whole thing. … I’ve seen a lot of cooperators in 30 years here — I’ve never seen one quite like Ms. Ellison. I [don’t remember] a single time when she was caught in the slightest error of fact — the slightest inconsistency with whatever she had told the government months before and what she said on the stand. I saw no inconsistency at all between the documentary evidence and what she said on the stand,” Kaplan said.
“And what she said on the stand was very incriminating of herself, and she pulled no punches about it.”
Kaplan said he believed Ellison was vulnerable and exploited by Bankman-Fried and that she was genuinely remorseful.
“He’s really sorry he got caught,” the judge said of Bankman-Fried. “Your remorse is the real thing.”
In November, a jury found Bankman-Friend, 32, guilty of wire fraud, conspiracy and money laundering. They found that the MIT grad and one-time wunderkind defrauded his investors from 2017 through 2022 and used the billions stolen from his cryptocurrency trading platform, FTX, to cover debts and risky investments by Alameda Research, fund political contributions, and live like a king in the Caribbean.
Among the A-listers to endorse FTX in paid ads shown at the Super Bowl before the walls caved in were supermodel Gisele Bündchen, comedian Larry David and sports stars Tom Brady, Shaquille O’Neal, Stephen Curry and Naomi Osaka.
On Tuesday, Ellison, who wore a gray blazer and a mauve dress to her sentencing, apologized to people who lost their jobs and money after FTX’s November 2022 implosion and said she felt “deeply ashamed.” She said she was part of a conspiracy that stole billions from people who put their trust in FTX and Alameda, abusing “that trust in the worst possible way.”
“I want to start by saying how sorry I am,” Ellison emotionally told the court. “I think, on some level, my brain can’t even truly comprehend the scale of the harm that I’ve caused. That doesn’t mean I don’t try. So, to all the victims, and everyone I harmed directly or indirectly, I’m so, so sorry.”
While Bankman-Fried was awaiting trial under house arrest at his parents’ Palo Alto, Calif., home, Kaplan revoked his $250 million bond amid allegations the FTX C.E.O. leaked his on-again-off-again girlfriend’s diary to reporters. In court filings, Ellison’s lawyer said Bankman-Fried had tormented her before and after the fraud came to light, throwing her crumbs as a boyfriend and pressuring her to take amphetamines to work untenable hours.
Attorney Anjan Sahni on Tuesday said his client had done everything she could to atone for her crimes through community volunteer work, and that she’d paid a steep price for her association with “SBF,” essentially forcing her to “live in hiding.” The attorney noted that prosecutors acknowledged they didn’t know of another cooperator in recent history who had endured a greater level of attention and harassment.
“Her notoriety will likely leave her unemployable in the future as it has in the last few years,” Sahni said. “Her physical appearance has been the subject of Internet fascination and scrutiny. Her most private thoughts and reflections were plastered over the press after Bankman-Fried leaked them.”
Ellison, who also agreed to forfeit any profits she made from the fraud, had no comment as she left court. She must report to the Bureau of Prisons on Nov. 7.
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