The strength of Ellison’s testimony against Bankman-Fried will also have gone a long way toward convincing the judge to show leniency, says Paul Tuchmann, a former U.S. prosecutor and partner at the law firm Wiggin and Dana.
Testifying at Bankman-Fried’s criminal trial in October 2023, Ellison described his former lover as the driving force behind the FTX fraud. On the stand, he painted Bankman-Fried as forceful and calculating and described for the jury his various deceptions, careful preservation of his public image and twisted relationship with risk. “(Bankman-Fried) was totally comfortable taking a risk, as long as he thought it was a positive expected value,” Ellison said, under questioning from the prosecution. “He talked about being willing to flip a coin, like if it comes up tails, you might lose $10 million, but if it comes up heads, you win a little bit more than $10 million.”
Ellison cried on the stand as she recalled her “state of dread,” wracked with guilt over the stolen funds, and the perverse relief she felt when FTX began to fall apart. “It’s something that had been on my mind every day, worrying about what would happen when the truth finally came out,” Ellison said. “I felt a sense of relief that I didn’t have to lie anymore.”
“In cases like this, it is often very important for the prosecution to have someone close to the main defendant on trial who can take the jury inside the case,” Tuchmann said. “She was an immensely valuable witness in an immensely important case.”
The judge took that cooperation into account. “I’ve seen a lot of cooperators in 30 years. I’ve never seen one like Ms. Ellison,” Kaplan said. It was “remarkable” that there was “not a single instance” in which Ellison’s testimony and interviews with law enforcement differed from the physical evidence in the case, he said.
The cost to Ellison probably also played a role in her leniency. “In this case, there was something of a harassment (of Ellison) because of the huge media coverage of the case. In addition, her personal and romantic life was made known to the world, which would be very painful for anyone,” says Tuchmann. “You can get more credit if cooperation has consequences. The consequences for her were severe.”
As Ellison prepares to begin his sentence behind bars, other members of FTX’s inner circle are awaiting their own sentences. Former FTX executives Nishad Singh and Gary Wang, who also pleaded guilty to fraud, will be sentenced on October 30 and November 20, respectively.
Meanwhile, in an attempt to escape her own lengthy prison sentence, Bankman-Fried is pushing for a new trial. “Sam Bankman-Fried was never found innocent … The judge presiding over his trial found him guilty,” her lawyers wrote in a brief filed with the U.S. Court of Appeals. But the chances of having her conviction overturned are slim, and the decision to fight the charges against her – unlike Ellison and the other co-conspirators – to the bitter end may still prove fruitless.
“Kaplan is a highly respected judge, particularly in complex economic crime cases. The argument in the brief – that he got everything wrong – is very difficult to sustain,” Naftalis says. “The appeal is a long shot.”
As people filed out of the courtroom, Ellison’s two younger sisters wept visibly but quietly alongside their parents. One of Ellison’s attorneys touched her back to comfort her. Ellison did not move.
This is a developing story. Please check back for updates.
Additional reporting by Caroline Haskins.
