Why Caroline Threw Sam Under The Bus: Details Emerge About Alameda CEO’s Generous Plea Deal

Why Caroline Threw Sam Under The Bus: Details Emerge About Alameda CEO’s Generous Plea Deal

Update (1045ET): As part of the recently unsealed plea agreement with the US Attorney’s Office of the Southern District of New York, CoinDesk reports that if Ellison fully cooperates with the SDNY’s investigation (in throwing her boyfriend under the bus), as well as any other law enforcement agency designated by the office, she won’t be further prosecuted criminally.

While the deal does not guarantee that other agencies will not pursue prosecution at a later date, it appears the former Alameda exec will be spared of all major charges, which could have seen her sentenced to up to 110 years in prison.

Ellison was accused of seven counts.

Two accused her of committing wire fraud on customers of FTX and engaging and conspiring to do so.

Another two alleged she committed wire fraud on the lenders of Alameda Research and conspired to do so.

Count five charged her with conspiracy to commit commodities fraud, and count six alleged conspiracy to commit securities fraud on FTX’s equity investors.

The seventh count accused her of conspiring to commit money laundering.

The Attorney’s Office agreed not to prosecute Ellison on any of those seven counts in exchange for her cooperation — the complete disclosure of all the information and documents demanded by prosecutors.

Ellison will be permitted bail, provided she can provide a $250,000 personal recognizance bond and restrict travel to the continental United States.

She will also need to surrender any travel documents she has.

Finally, CoinDesk points out one interesting side-note in that the plea deal also contains language that says if Ellison is not a US citizen, it is very likely that her removal from the US will be mandatory. While it’s assumed that Ellison is a US national, it is possible she may have abandoned her nationality for a citizenship of convenience for tax reasons which is a popular trend among some crypto traders living abroad, as the US taxes non-residents.

It appears Bankman-Fried’s girlfriend found a way to screw him one last time.

*  *  *

Two weeks ago, when amid reports that the former CEO of Alameda Capital (which as a reminder was ground zero of the FTX implosion after it blew up $8 billion in FTX client funds on trades gone horribly wrong), Caroline Ellison, was spotted in New York just after retaining Clinton superlawyer, Jamie Gorelick of Wilmer Hale, which as readers may recall was the former No. 2 ranking member in the Clinton Justice Department, and in a recent interview, she referred to current AG Merrick Garland as her “wingman”, we asked if Caroline had rolled on Sam Bankman-Fried, who was also her former lover.

Fast forward to today when we just got confirmation that Caroline Ellison has fucked Bankman-Fried one final time by indeed rolling on him, and “turning states” in the criminal prosecution of the corpulent “Hairy Plotter“, who commingled and stole the client money in his FTX exchange to fund a series of terrible crypto bets at his personal hedge fund Alameda, fund tens of millions in donations to democrats and buy up prestigious real estate for himself and his “altruistic” progressive lawyer parents.

According to a Manhattan Federal prosecutor, two of FTX founder Sam Bankman-Fried’s closest associates have pleaded guilty to fraud and agreed to co-operate with US authorities investigating the collapse of the bankrupt cryptocurrency exchange. In other words, they took a plea deal to avoid even more prison time in exchange for serving SBF on a silver platter to the Feds.

Damian Williams, the US attorney for the Southern District of New York, announced the guilty pleas and criminal charges against Caroline Ellison and Zixiao “Gary” Wang, the low profile co-founder of FTX, in a short video statement. His office had brought eight charges against Bankman-Fried last week.

Statement of U.S. Attorney Damian Williams on U.S. v. Samuel Bankman-Fried, Caroline Ellison, and Gary Wang pic.twitter.com/u1y4cs3Koz

— US Attorney SDNY (@SDNYnews) December 22, 2022

Ellison pleaded guilty to seven counts, including wire and securities fraud and conspiracy to commit money laundering, which carry a maximum sentence of 110 years in prison, while Wang pleaded guilty to four counts of fraud, with a maximum 50-year sentence.

The documents said prosecutors would not oppose bail requests from both defendants under certain conditions, including posting a bond and handing in their travel documents, as they awaited formal sentencing.

Concurrently, the Securities and Exchange Commission and the Commodity Futures Trading Commission also filed civil lawsuits against the 28-year-old Ellison and 29-year-old Wang, accusing them of fraud.

“As part of their deception, we allege that Caroline Ellison and Sam Bankman-Fried schemed to manipulate the price of FTT, an exchange crypto security token that was integral to FTX, to prop up the value of their house of cards,” said SEC chair Gary Gensler. Furthermore, as CEO of the FTX trading affiliate, Ellison “used FTX’s customer assets to pay Alameda’s debts” and diverted billions of dollars of depositors’ money to the company to fill a hole caused by a crypto market crash in May, the SEC’s complaint alleges.

The CFTC said Wang had a hand in creating some of the algorithms that underpinned FTX, which allowed Alameda “to maintain an essentially unlimited line of credit” on the exchange, giving it an “unfair advantage” over regular depositors. “These critical code features and structural exceptions allowed Alameda to secretly and recklessly siphon FTX customer assets from the FTX platform.”

Both defendants are co-operating with the SEC, the agency said. The CFTC said they were not contesting their liability. Which means that SBF is looking at a lot of prison time, unless he too can throw someone even more important and powerful under the bus…

Sam better have someone much bigger to rat on or he is facing about 120 years in FPMITAP. Also, he better get someone to fix his prison cam t.co/Krw5u2psZD

— zerohedge (@zerohedge) December 22, 2022

… although if that is the case, he probably will be Epsteined within hours of arriving at MDC Brooklyn, singe MCC New York where Epstein “killed himself”, has been closed since August 2021 due to deteriorating conditions.

While Ellison’s superlawyers have yet to make a statement, a lawyer for Wang, Ilan Graff, said: “Gary has accepted responsibility for his actions and takes seriously his obligations as a co-operating witness.”

Last week, the DOJ filed charges against Bankman-Fried and accused him of orchestrating “one of the biggest financial frauds in American history” by misappropriating customer assets from FTX to Alameda Research. He was arrested in the Bahamas, where he lives. He is also facing parallel civil cases from the SEC and CFTC.

Williams reiterated his call for others who worked with Bankman-Fried to come forward. “If you participated in misconduct at FTX or Alameda, now is the time to get ahead of it,” he said. “We are moving quickly and our patience is not eternal.” One of them is former Alameda CEO Sam Trabucco, best known for quietly bailing on Sam just as everyone was about to blow up and fleeing on his multi-million dollar new yacht.

Sorry for not saying an earlier, my internet was terrible because I was here pic.twitter.com/wnWcxeJVg9

— Sam Trabucco (@AlamedaTrabucco) September 8, 2022

The announcement from Williams comes just after a plane carrying Bankman-Fried took off from the Bahamas, where he waived his right to challenge extradition to the US. He is due to appear in a Manhattan court as soon as Thursday, where his bail request will be considered, although in light of Caroline’s plea, it is safe to say it won’t be granted.

The details in the SEC’s complaint have been laid out nicely by the following twitter account…

We just discovered Caroline Ellison and Gary Wang turned on @SBF_FTX, rattling him out to the Feds. The SEC’s civil (non-criminal) complaint is built on their participation and gives us our first “insider’s account” of the FTX disaster.

I’ve given you 12 key takeaways below:👇🧵 pic.twitter.com/VNL2t09S5Q

— Compound248 (@compound248) December 22, 2022

… and the full complaint can be found below (link here)

Tyler Durden
Thu, 12/22/2022 – 10:43


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