Parent of FTX victim who lost $130,000 asks judge to go easy on SBF, suggests six years in prison versus DOJ’s 40-50

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Former FTX CEO Sam Bankman-Fried arrives for a bail hearing at Manhattan Federal Court on August 11, 2023 in New York City.
Michael M. Santiago | Getty Images

Heather Ferguson’s son lost approximately $130,000 in cash when crypto exchange FTX went bankrupt in November 2022. At the time, Ferguson traveled to where her child was living to spend four days consoling him. Since touching bottom, however, he has shown “resilience,” “confidence,” and a “determination to meet life’s challenges head on with renewed focus and vigor,” Ferguson wrote in a note to U.S. District Judge Lewis Kaplan on Tuesday.

It helps that in January, her son was contacted by the entity overseeing the disbursement of FTX client funds and told that he would be refunded the full amount he was owed.

“I am writing to convey my hope that Sam Bankman-Fried will be given a sentence in the range of 70 months for his role in the collapse of FTX,” Ferguson wrote in her letter to the judge. “The hope that customer funds will be reimbursed in some measures mitigates the severity of Sam’s guilt, and it seems to me that the length of his sentence should reflect this fact.”

Ferguson’s letter is part of an eleventh hour push by the defense to appeal to Kaplan’s sense of leniency as the judge gears up for Bankman-Fried’s sentencing hearing on Thursday.

In November, a jury of twelve found the former crypto executive guilty of all seven criminal counts against him, including wire fraud and conspiracy to commit wire fraud against FTX customers and against Alameda Research lenders; conspiracy to commit securities fraud and conspiracy to commit commodities fraud against FTX investors; and conspiracy to commit money laundering.

That the jury was able to reach a unanimous verdict in just a few hours that FTX’s ex-CEO stole $8 billion from customers of his now bankrupt crypto exchange suggests that they were truly convinced and that there were no holdouts that needed to be coaxed, Yesha Yadav, law professor and Associate Dean at Vanderbilt University, previously told CNBC.

On Tuesday, the defense submitted three letters in support of Bankman-Fried, while prosecutors filed more than 50 letters of their own, bringing the total number of victim impact statements to 117.

The question of whether FTX customers being made whole through bankruptcy should influence the court’s decision over sentencing is a major point of contention.

Earlier this month, federal prosecutors in Manhattan wrote in a memo to the court that Bankman-Fried should spend between 40 and 50 years in prison.

“Even now Bankman-Fried refuses to admit what he did was wrong,” the government wrote.

Even as the bankruptcy estate promises to pay back customers in full, many of FTX’s thousands of victims (reportedly up to a million) argue that their crypto stakes have been significantly undervalued by the exchange’s new leadership team.

Parents chime in

Ferguson was one of three concerned parents to write Kaplan, suggesting that Bankman-Fried’s emotional and behavioral disorders be taken into account as part of his deliberations over sentencing.

“Along the vein of mitigating factors, some mention should be made of Sam’s ASD and the afflictive emotions that stemmed from his ADHD and his medications,” Ferguson wrote. “These are relevant factors in his background which likely caused him to show poor judgment, but did not likely correlate with an intention to be malicious toward his clients.”

Bankman-Fried’s psychiatrist, George Lerner, told Judge Lewis Kaplan in a letter in August that the former FTX CEO has a history of depression and attention-deficit/hyperactivity disorder. ADHD is among the most common neurodevelopmental disorders in children. 

“Additionally, there have been times when Mr. Bankman-Fried did not have access to the Emsam patch (typically when travelling/abroad) and exhibited symptoms of depression, including lethargy, anhedonia, low motivation, and increased ruminations,” Lerner wrote.

Without his medication, Lerner warned the judge, “Bankman-Fried will experience a return of his depression and ADHD symptoms and will be severely negatively impacted in his ability to assist in his own defense.”

At one point during Bankman-Fried’s criminal trial last year, the defense team also argued that he was not receiving adequate access to prescribed medication, including Adderall, a treatment for attention-deficit/hyperactivity disorder. And when initially remanded to custody, lawyers for Bankman-Fried argued that their client had a “limited” and “dwindling” supply of Emsam, a transdermal patch for treating depression. 

Maria Centrella, the mother of a 34-year-old son with Asperger’s Syndrome, also wrote to Judge Kaplan to share her experience raising a child on the Autism spectrum.

“I have no opinion as to his guilt or innocence under the law, but do want to share with you my experiences with my son that hopefully might give you some pause to reflect on Sam’s behavior and mental state leading up to and during the trial,” wrote Centrella, who says that she was not familiar with Bankman-Fried’s story until she watched Michael Lewis’s “60 Minutes” interview, in which he shared anecdotes from shadowing Bankman-Fried as part of reporting a book about his life.

“As he described Sam I saw my son and kept wondering why Asperger’s never came up in the segment, because those of us knowledgeable about it, could see his behavior, his mannerisms … and his brilliance… as huge indicators of him being on the spectrum,” Centrella wrote.

She went on to say that she reached out to Bankman-Fried’s father, Joe, who confirmed that Sam had indeed been diagnosed as on the autism spectrum and that the court had been made aware.

“I have no idea how familiar you are with Asperger’s, particularly those who are out working and supporting themselves, but I can speak from experience that the mind of those on the spectrum works differently. Though I have never met Sam, I firmly believe that while he may be an MIT grad – he did not fully understand the scope of what was going on and did not have malicious intent,” she wrote.

Matt Kelly, who also has an autistic son and has worked as a special needs teacher in the UK, wrote a three paragraph letter to share his personal and professional observations that “might be of consideration when deciding a sentence.”

“Many of Sam’s personality traits suggest some type of atypical neurological processes; whether this is a tendency to avoid eye contact, a habit of being unable to focus on one thing at a time, or a lack of emotional response in a situation where most people would show outward signs of strain and distress,” wrote Kelly.

“He has also witnessed his ex-partner and associates testify against him in court, and to a
person with unusual processing, this may have been confusing and upsetting,” Kelly added. “I hope that account is taken of Sam’s abnormal presentation in your sentencing, so that retribution is in proportion to the degree of fault, and that account is taken of which type of institution would be most appropriate in the case of someone like Sam.”

MIT roommate: He did communal laundry “on time”

Two of Bankman-Fried’s former friends and roommates at the Massachusetts Institute of Technology also submitted character references on his behalf.

Daniel Grazian, who graduated in 2013, says that he knew Bankman-Fried “well” for three years.

“Sam was a kind friend and a wonderful person to be around,” Grazian wrote in his letter to the court.

He goes on to say that Bankman-Fried “felt deeply for every living being, farm animals included” and that his portrayal as “being motivated by greed” was “completely inconsistent” with the Sam he knew.

“I believe that if Sam is given a lenient sentence, he will be an asset to society. If the fact that I still limit my meat consumption on ethical grounds is any indication, Sam will continue inspiring others to be a little bit kinder and gentler,” concludes Grazian’s letter.

Another classmate, Adam Hesterberg, who was part of the PhD class of 2018, had known Bankman-Fried before MIT, beginning at a math camp in 2007.

“In the time I knew him, Sam was responsible, was pleasant to be around, and cared about doing good for the world,” wrote Hesterberg in a letter to the judge.

One example he cited was Bankman-Fried’s role in executing house chores.

“Sam did his fair share of chores, usually by washing the pots and dishes used in cooking our meals and doing our kitchen laundry. He consistently did so well and on time; I only observed him late once, when a queue for the washing machine delayed the kitchen laundry,” the letter states.

Hesterberg went on to detail other instances of Bankman-Fried’s good nature, including wanting to “reduce farm animals’ suffering” and encourage his fellow classmates to donate to charitable causes, such as the Against Malaria Foundation.

“I don’t know to what extent a character reference from a decade ago should affect Sam’s sentencing, but to whatever extent it does, my impression of Sam was almost uniformly positive and is an argument for leniency in his sentence,” Hesterberg concludes.

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