FTX Founder Sam Bankman-Fried and Alameda Research CEO Caroline Ellison have both hired top-flight criminal defense attorneys specializing in white-collar crime amid ongoing law enforcement investigations into the collapse of their crypto empire.
Bankman-Fried was arrested on Monday at the request of US authorities in the Bahamas ahead of his expected extradition at a later date. On Tuesday, a federal prosecutor unveiled an indictment showing Bankman-Fried was charged with eight felonies.
Charges against him include wire fraud at customers and a related conspiracy charge; lender wire fraud and a conspiracy charge; in addition to conspiracies to commit commodity fraud, securities fraud, money laundering and violations of campaign finance laws.
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Overall, the charges against Bankman-Fried carry a possible combined sentence of up to 115 years in prison based on federal guidelines for sentencing these crimes. The wire fraud charge – including the conspiracy charge – and the money laundering conspiracy charge each carry a maximum sentence of 20 years in prison. Each of the charges of fraud in goods and securities and the charge of conspiracy to fund campaigns carry a maximum sentence of five years in prison.
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Mark Cohen of the law firm Cohen & Gresser is tasked with preventing Bankman-Fried from spending the rest of his life in prison if he is found guilty.
Cohen, a former federal prosecutor, has represented a variety of clients, including financial firms, hedge funds, executives, energy companies, and others facing federal indictments. Notably, Cohen represented Jeffrey Epstein’s confidante Ghislaine Maxwell in her sex trafficking trial and was defense attorney for Joaquin “El Chapo” Guzman, a leader of the Sinaloa drug cartel.
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At a news conference Tuesday announcing the charges against Bankman-Fried, US Attorney for the Southern District of New York Damian Williams said that the Bankman-Fried case, which drew comparisons to Bernie Madoff’s Ponzi scheme and the Enron scandal is going down as “one of the biggest scams in American history.”
Williams also issued an ominous warning to the Bankman-Fried conspirators who may be charged, saying, “In terms of whether we’re going to press charges against anyone, all I can say is this: We’re clearly not done.”
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As of Tuesday, no charges had been filed against Caroline Ellison, Bankman-Fried’s reported ex-girlfriend, whom he appointed to head Alameda Research.
However, Ellison has engaged the services of Stephanie Avakian, a partner at the law firm WilmerHale. Avakian has extensive experience in legal matters related to the financial sector, having previously served as Director of Enforcement for the Securities and Exchange Commission.
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Avakian currently leads WilmerHale’s securities and financial services practice and has worked advising and defending public companies, corporate directors, investment banks and individual executives involved in government investigations.
Charles Gasparino of Fox Business noted on Twitter that Ellison’s selection of an attorney from WilmerHale has fueled speculation that “they are working with prosecutors” and will oppose Bankman-Fried given the firm’s ties to the Manhattan Attorney’s Office and its reputation for closing pleas.