FTX fraudster Caroline Ellison sentenced to 2 years in jail, ordered to forfeit $11 billion

Caroline Ellison, the star witness within the prosecution of her former boyfriend, FTX founder Sam Bankman-Fried, was sentenced Tuesday in New York federal courtroom to 2 years in jail and ordered to forfeit $11 billion for her function within the huge fraud and conspiracy that doomed the cryptocurrency trade as soon as valued at $32 billion.

The jail time period was considerably stiffer than the advice by the federal Probation Division that Judge Lewis Kaplan sentence Ellison to a few years of supervised launch, with no time in any respect behind bars.

Protection attorneys additionally had requested a no-prison sentence for Ellison, who had run Alameda Research, a hedge fund linked to FTX.

Whereas Kaplan praised Ellison for her in depth cooperation with prosecutors — which led to the conviction of Bankman-Fried — the decide stated her prison sentence wanted to discourage different potential dangerous actors from committing fraud.

A “literal get-out-of-jail-free card I am unable to comply with,” Kaplan stated in U.S. District Court docket in Manhattan, the place Ellison’s dad and mom and two sisters seemed on from the courtroom’s gallery.

“I’ve seen numerous cooperators through the years and I’ve by no means seen one fairly like Miss Ellison,” stated Kaplan, who additionally stated he believed that Ellison was genuinely remorseful for her crimes, and that her cooperation carried a steep value for her emotionally.

Ellison learn from an announcement in a shaky voice whereas crying at occasions as she apologized to the individuals she had harm and stated she was deeply ashamed. She additionally stated she was sorry for being courageous sufficient to stroll away from FTX and Bankman-Fried.

Kaplan allowed Ellison to stay free on bail till she surrenders to jail both on or after Nov. 7.

Ellison reached a plea deal with prosecutors in December 2022, a month after FTX spiraled into chapter 11. She pleaded guilty to conspiracy and monetary fraud fees.

Bankman-Fried, in distinction, selected to face trial and was convicted of all seven prison fraud fees in opposition to him in the identical courthouse the place she was sentenced.

He was sentenced to 25 years in jail in March and in addition was ordered to pay $11 billion in forfeiture by Kaplan.

Bankman-Fried since then has appealed his conviction, and requested a brand new trial and a distinct decide, arguing that Kaplan was biased in opposition to him.

On Tuesday, earlier than sentencing Ellison, Kaplan contrasted her conduct after she was charged with that of Bankman-Fried.

Whereas the FTX founder had denied prison conduct, she cooperated with authorities, Kaplan famous.

“It did not work out so nicely” for Bankman-Fried, partly due to Ellison’s cooperation, the decide stated.

Kaplan credited Ellison for offering prosecutors with seven pretend spreadsheets, which he known as “one of many large items of proof within the case” in opposition to Bankman-Fried.

Late Monday, Ellison’s attorneys in a courtroom submitting stated that they had finalized monetary settlements with prosecutors and the FTX debtor’s property.

The submitting didn’t say how a lot she would pay in these settlements, that are separate from the forfeiture order, however it was already identified that Ellison’s $10 million in shares within the AI startup Anthropic, which have grown considerably since she first purchased them, present the majority worth of her settlements.

Each Bankman-Fried and Ellison had confronted the identical statutory most sentence of about 110 years in jail for his or her crimes.

However defendants in prison instances who cooperate with prosecutors as an alternative of combating the fees significantly in white-collar instances akin to FTX, typically obtain leniency when they’re sentenced.

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