FTX founder Sam Bankman-Fried and Alameda Research CEO Caroline Ellison have both retained powerful criminal defense attorneys specializing in white-collar crimes amid ongoing law enforcement investigations into the collapse of their crypto empire .
Bankman-Fried was arrested in the Bahamas on Monday at the request of US authorities before his likely extradition at a later date. On Tuesday, a federal prosecutor opened an indictment revealing that Bankman-Fried was charged with eight felonies.
Charges against him include customer wire fraud, as well as a related conspiracy charge; credit card wire fraud, plus a conspiracy charge; as well as conspiracies to commit commodity fraud, securities fraud, money laundering, and violation of campaign finance laws.
SAM BANKMAN-FRIED DENIED BAIL IN BAHAMAS ORDER THROUGH FEBRUARY. 8 IN ALLEGED FTX FRAUD SCHEME
In total, the charges Bankman-Fried faces carry a potential total sentence of up to 115 years in prison under federal sentencing guidelines for those crimes. The wire fraud charges — including conspiracy charges — and the conspiracy charge for money laundering carry a maximum sentence of 20 years in prison each. Each of the counts of commodity and securities fraud and the count of campaign finance conspiracy carry a maximum sentence of five years in prison.
WHERE DID THE MONEY IN FTX CRYPTO COLLAPSE?
The job of preventing Bankman-Fried from spending the rest of his life in prison if found guilty of the crimes he is accused of falls to Mark Cohen, of the law firm Cohen & Gresser.
Cohen, a former federal prosecutor, has represented a variety of clients including financial firms, hedge funds, executives, energy companies and others facing federal charges. Notably, Cohen represented Jeffrey Epstein’s confidant Ghislaine Maxwell in his sex trafficking trial and was a defense attorney for Joaquin “El Chapo” Guzman, who was a leader in the Sinaloa drug cartel.
SEC CHARGES BANKMAN-FRIED FOR ALLEGED “HUGE, YEARS LONG FRAUD”
At a press conference announcing the charges against Bankman-Fried on Tuesday, US Attorney for the Southern District of New York Damian Williams said the Bankman-Fried case, which drew comparisons to Bernie Madoff and the Enron scandal, will be filed as “one of the largest frauds in American history”.
Williams also issued an ominous warning to the Bankman-Fried conspirators who could face charges, saying, “In terms of bringing charges against someone else, look, I can only say this: Clearly, we’re not done.”
FTX CEO BLAMES ‘GROSSLY ROOT’ OWNERS FOR COLLAPSE, SAY CUSTOMER MONEY HAS FUELED RISKY ALAMEDA BUSINESS
As of Tuesday, no charges have been filed against Caroline Ellison, Bankman-Fried’s ex-girlfriend whom he appointed to lead Alameda Research.
However, Ellison retained the services of Stephanie Avakian, WilmerHale’s law firm partner. Avakian has extensive experience in legal matters relating to the financial sector, having previously served as director of the Securities and Exchange Commission’s Division of Enforcement.
GET FOX BUSINESS ON THE GO BY CLICKING HERE
Avakian currently leads WilmerHale’s securities and financial services department and has worked to advise and defend publicly traded companies, boards of directors, investment banks and individual executives involved in government investigations.
Charles Gasparino of Fox Business noticed on Twitter that Ellison’s choice of an attorney for WilmerHale has fueled speculation that he will “cooperate” with prosecutors and turn against Bankman-Fried, given the firm’s connections to the federal attorney’s office in Manhattan and its reputation for got a plea deal.