Sunday, July 14, 2024

‘You can commit fraud in shorts and T-shirts in the sun,’ says SDNY attorney on SBF indictment

Damian Williams, United States Attorney for the Southern District of New York, said the investigation leading to charges against former FTX CEO Sam Bankman-Fried had been “very, very fast” but prosecutors were “not done” with arrests.

In a press conference livestream on Dec. 13, Williams said the timing of the arrest of Bankman-Fried had been based on progress from law enforcement officials, who authorized charges on Dec. 7 and indicted the former FTX CEO on Dec. 9, leading to a warrant being executed in the Bahamas on Dec. 12. An eight-count indictment released on Dec. 13 revealed U.S. authorities alleged SBF had defrauded customers and investors at FTX, defrauded lenders at Alameda, and violated campaign finance laws with contributions to both Democratic and Republican lawmakers.

“Bankman-Fried knowingly defrauded customers of FTX through the misappropriation of customer deposits to pay expenses and debts of a different company,” said FBI assistant director in charge Michael Driscoll in the same press conference. “In addition, Bankman-Fried executed deliberate transactions designed to obscure and disguise the misuse of customer funds. He preyed on his customers, the victims of this case, abusing the trust placed not only in his company but in himself as the lead of that company.”

Williams said the investigation in the collapse of FTX was ongoing, hinting at additional announcements on potential arrests in the future. He called on individuals who may have been involved in alleged illegal actions at FTX and Alameda to “come see us before we come see you.”

“You can commit fraud in shorts and T-shirts in the sun,” said Williams in response to a reporter’s question on SBF fitting the profile of a fraudster. “We are not done. Extradition is ongoing in the Bahamas.”

Williams added:

“This was one of the biggest financial frauds in American history.”

U.S. Attorney for the Southern District of New York Damian Williams addressing reporters on Dec. 13

Related: SBF’s lawyers request bail in Bahamas Magistrate Court pending extradition

Complaints from both the U.S. Securities and Exchange Commission and Commodity Futures Trading Commissions on Dec. 13 followed the indictment against Bankman-Fried. The former FTX CEO had been expected to testify before a hearing of the House Financial Committee on Dec. 13 prior to his announced arrest. U.S. lawmakers with the Senate Banking Committee will also explore the collapse of FTX in a Dec. 14 hearing.

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