Sam Bankman-Fried‘s inner circle who helped send down the disgraced crypto king are likely to face ‘relatively short’ sentences in a minimum security prison if they are jailed, a convicted fraudster has revealed.
Disgraced FTX founder SBF was found guilty of embezzling $10 billion of his clients’ money in what the prosecutor said was ‘one of the biggest financial frauds in American history’ on Thursday night and faces up to 115 years in jail.
The star witnesses testified that Bankman-Fried directed them to commit fraud to help steal billions of dollars of customers’ money to plug gaps in the flailing FTX trading platform.
Their testimony came after they themselves admitted to a string of financial crimes in exchange for a plea deal.
Now former fraudster Justin Paperny has revealed the group are likely to enjoy lenient sentences thanks to their co-operation.
Sam Bankman-Fried’s inner circle, including Caroline Ellison (pictured) will face ‘relatively short’ sentences thanks to their testimony against the failed crypto king, according to a convicted fraudster
Former fraudster Justin Paperny said Ellison, along with Gary Wang (left) and Nishad Singh (right) would likely spend any prison term in a minimum security camp without other violent offenders
Paperny was a UBS Group AG broker who previously served 18 months for fraud in 2008.
He told Bloomberg he believed the trio’s sentences would be relatively short and spent at minimum security prison camps with no violent offenders.
The US only has seven such standalone federal prison camps: FPC Alderson, FPC Bryan, FPC Duluth, PC Montgomery, FCI Morgantown Camp, FPC Pensacola and FPC Yankton.
The camps are segregated by gender and house ‘nonviolent offenders who do not have a significant history of institutional disciplinary violations or escape’, according to prison consultants Zoukis.
Inmates in FPCs must also have less than ten years remaining on their sentence and are primarily for ‘white collar inmates’.
Ellison, who was the former CEO of FTX’s sister’s company Alameda Research, previously pleaded guilty to seven counts of fraud and money laundering charges.
If jailed, she could follow in the footsteps of fellow white-collar criminal Martha Stewart and be housed at women-only FPC Alderson, nicknamed ‘Camp Cupcake’. FPC Bryan is the only other standalone women’s federal prison camp.
Meanwhile Wang admitted four fraud counts and Singh pleaded guilty to six fraud and money laundering charges. They could be sent to FPC Duluth, PC Montgomery, FCI Morgantown Camp, FPC Pensacola and FPC Yankton which all house male inmates.
Their admissions of guilt came ahead of the New York trial of Bankman-Fried, 31, over the stunning collapse of his FTX trading platform in November 2022.
Bankman-Fried was convicted of one of the biggest financial fraud’s on record following the collapse of trading platform FTX
FPC Alderson, nicknamed Camp Cupcake after it housed fellow white-collar criminal Martha Stewart is among two standalone women’s minimum security federal prison camps
Federal prison camps, such as FPC Duluth pictured, are generally reserved for non-violent offenders with less than 10 years on their sentence
The disgraced crypto king pleaded not guilty to two counts of fraud and five counts of conspiracy, but was convicted on all charges on Thursday.
The verdict came almost a year after FTX filed for bankruptcy in a swift corporate meltdown that shocked financial markets and decimated Bankman-Fried’s estimated $26 billion personal fortune.
Paperny explained that even if they do not face jail time, Ellison, Wang and Singh could be forced to make restitution.
He himself was forced to take a minimum wage job answering phones to clear his own payments totaling $535,000.
Paperny added: ‘They’re very aggressive in collecting. You can’t sell your home or refinance it because those proceeds go to the government.’
Singh has already agree to forfeit a $3.7 million Washington home he bought in the state’s picturesque San Juan Islands, as well as shares in Anthropic PBC initially bought for $40 million but now worth more.
Details of the trio’s plea deals have not yet been made public, but they will be sentenced after Bankman-Fried – who is set to learn his fate on March 28 next year.
Without the plea deal, Ellison was looking at an 110-year sentence, Wang faced 50 years and Singh faced up to 75 years for their role in defrauding FTX customers.
But they are expected to be shown leniency in a bid to encourage other witnesses to testify against ‘big fish’ fraudsters.
Fellow fraudster Bernie Madoff was sentenced to 150 years at the medium security Otisville Prison in New York over his Ponzi scheme
Bankman-Fried is likely to be housed at a northwestern medium security prison such as this, FCI Herlong in California, according to prison consultants
Meanwhile Bankman-Fried is staring down the prospect of a 110 year sentence, most likely in a medium security prison, according to Zoukis.
Ponzi scheme fraudster Bernie Madoff was serving his 150 year sentence in medium security Otisville Prison in New York when he died aged 82.
He pleaded guilty to 11 felonies over the fraud, which was one of the biggest in financial history.
Due to his release address most likely being his parents’ Palo Alto, California address, he to be housed somewhere in the northwest.
California’s FCI Herlong, USP Lompocta or FCI Mendota are among the top candidates, according to the prison consultants.
Source: | This article originally belongs to Dailymail.co.uk