Reports of a quarter-billion-dollar 'bond' for Bankman-Fried are almost as fraudulent as the crimes of which he is accused
The public is being bamboozled about the conditions for pretrial release of accused mega-fraudster Sam Bankman-Fried.
It is the worst possible signal to those who fear that his scores of millions of dollars of political donations have bought him kid-glove treatment by the judicial system.
The stories you read and hear from the media would have you believe that a “record” bail of $250 million has been paid to ensure that he doesn’t flee the country or otherwise evade prosecution. Where that figure comes from, I don’t know, but this account from The Hill suggests that the federal prosecutors from the Southern District of New York had a hand in it:
At the request of prosecutors, Manhattan U.S. District Court Judge Gabriel Gorenstein agreed to the bond price and said Bankman-Fried can reside at his parent’s home in Palo Alto, Calif., ahead of the trial, according to The Associated Press.
Bankman-Fried stated in an interview with Andrew Ross-Sorkin of the New York Times at a public event that he had about $100,000 in funds available, so he was incapable of posting any bond beyond that amount. And it turns out, it was his parents who signed a lien on their equity in their home in Palo Alto, California to guarantee payment of the quarter billion-dollar bond should Bankman-Fried forfeit his bond by fleeing to Dubai or some other trick.
Palo Alto real estate is extremely expensive, but I seriously doubt that their home is worth more than a small percent of the publicized amount of the bond. But the media mostly do not report this fact, or if they do, they bury it.
For example, twenty-five paragraphs into the New York Times account of the release of Bankman-Fried hours after his return from the Bahamas – headlined “Sam Bankman-Fried Released on $250 Million Bond With Restrictions” -- we read:
Mr. Bankman and Ms. Fried are not actually paying $250 million to have Mr. Bankman-Fried released. But in theory, they would be liable for that amount if their son fled, and their house could be seized.
That directly contradicts the headline, but only a few “conspiracy theorists” are likely to notice.
Also, it has been reported that his parents have purchased real estate worth eight or even nine figures, and that his father was for a time employed by FTX.
Sam Bankman-Fried's FTX, his parents and senior executives of the failed cryptocurrency exchange bought at least 19 properties worth nearly $121 million in the Bahamas over the past two years, official property records show. (snip)
The documents for another home with beach access in Old Fort Bay -- a gated community that was once home to a British colonial fort built in the 1700s to protect against pirates -- show Bankman-Fried's parents, Stanford University law professors Joseph Bankman and Barbara Fried, as signatories. The property, one of the documents dated June 15 said, is for use as a "vacation home."
That raises the question of whether or not their real estate purchases were financed through fraudulent activity of the sort that Bankman-Fried is accused of. Law professors at Stanford University no doubt make handsome salaries that can be supplemented by outside consulting. But such activities are unlikely to yield amounts to pay for such properties. It is reasonable to ask if such purchases would make the parents co-conspirators in the fraud of which their son is accused.
The fact that the media are trumpeting a phony amount for pretrial release bond and that the Southern District of New York prosecutors and the judge in the case, federal magistrate Gabriel W. Gorenstein – a former chief of the civil rights unit in that same Southern District of New York prosecutors’ office -- have enabled this misreporting suggests that Bankman-Fried is getting treatment commensurate with the political influence his donations evidently sought to purchase.
Photo credit: YouTube screen grab.