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Sam Bankman-Fried's fraud should have been detected earlier: Patrick Hillman
Former Binance chief strategy officer Patrick Hillman reacts to Sam Bankman-Fried's 25-year prison sentence on The Big Money Show.
FTX founder and former CEO Sam Bankman-Fried was sentenced to 25 years in prison for fraud on Thursday by a federal judge, who made a recommendation about where the disgraced crypto king should serve his sentence.
Bankman-Fried, 32, was found guilty in November on two counts of wire fraud and five counts of conspiracy following the collapse of his crypto empire in November 2022, which has been compared to Enron. Bankman-Fried merged the assets of the FTX cryptocurrency exchange with sister hedge fund Alameda Research, and the two firms collapsed once investors moved to withdraw their funds – with billions of dollars of customer assets lost.
U.S. District Judge Lewis Kaplan, who oversaw Bankman-Fried's trial in Manhattan federal court, handed down his sentence on Thursday and made a recommendation to the federal Bureau of Prisons about where the former billionaire should serve his time.
"I strongly recommend to the Bureau of Prisons that the defendant be designated initially to a medium security facility or any lower security institution the BOP considers appropriate, and I do so for two reasons," Judge Kaplan said.
DISGRACED CRYPTO KING SAM BANKMAN-FRIED SENTENCED TO 25 YEARS FOR FTX FRAUD
Sam Baknman-Fried was sentenced to 25 years in prison over the collapse of FTX. (Photographer: Yuki Iwamura/Bloomberg via Getty Images / Getty Images)
"First, I have no reason to believe that the defendant would initiate any act of violence against another prisoner or any BOP staff," which Kaplan said would typically merit assignment to a maximum security prison facility.
"Second, defendant's notoriety. His association with vast wealth – regardless of his present and actual financial resources – and his autism and social awkwardness are likely to make him more than usually vulnerable to misconduct by other inmates in the environment of a maximum security facility," Kaplan explained.
"I further recommend that the designated facility be as close to the San Francisco Bay Area as possible for the purpose of facilitating family visitation," he added.
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Sam Bankman-Fried was found guilty on two counts of wire fraud and five counts of conspiracy in connection with FTX's collapse. (Photographer: Ting Shen/Bloomberg via Getty Images / Getty Images)
The Bureau of Prisons declined to comment on the circ*mstances of Bankman-Fried's assignment to a specific prison facility or provide a timeline for BOP officials to decide where he will serve his sentence. The agency offered a statement outlining the factors it considers in assigning individuals to specific correctional institutions.
"Some of the factors include the level of security and supervision the inmate requires, any medical or programming needs, separation, and security measures to ensure the individual's protection, and other considerations including proximity to an individual's release residence," the BOP explained in a statement to FOX Business.
"The same criteria apply for both initial designations and re-designations for transfer to a new facility," BOP added.
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Joseph Bankman and Barbara Fried reside in the San Francisco Bay Area, which prompted the judge's recommendation that Sam serve his sentence near the area. (Reuters/Brendan McDermid)
Bankman-Fried's parents, Joseph Bankman and Barbara Fried, both reside in the San Francisco Bay Area and have worked as professors at Stanford Law School.
Judge Kaplan's recommendation that Sam serve his sentence at a medium security prison near the Bay Area points to two potential medium security federal prisons in northern California where he may be sent to serve his sentence – FCI Herlong and FCI Mendota.
FCI Herlong is located in Lassen County near the Nevada border northwest of Reno, Nevada, while FCI Mendota is in California's Central Valley within Fresno County. Both correctional institutions have adjacent satellite prison camps to house minimum-security offenders.
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Judge Kaplan's suggestion that BOP designate Sam Bankman-Fried to a medium security facility or a lower security institution deemed appropriate by BOP could allow for his transfer to a lower security portion of either facility if he is initially sent to a medium security prison.
FOX Business' Suzanne O'Halloran contributed to this report.
