Caroline Ellison, the former CEO of Alameda, takes a plea deal in the FTX scandal
America ı By Jackie Allen
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Caroline Ellison, ex-CEO of Alameda Research pleaded guilty to seven federal fraud charges including money laundering and conspiracy to commit securities, commodities, and wire fraud. The maximum time she could serve in prison is 110 years. And she agrees to pay an amount of restitution that will be determined by the court.
She was targeted by the Justice Department due to her close relationship with FTX co-founder Sam Bankman-Fried. Ellison was his on-again, off-again girlfriend.
Bankman-Fried appears to have maintained a 90% ownership interest in FTX and other companies he created.
Ellison, 28, was the chief of Alameda the trading company launched by the now-disgraced Bankman-Fried. Also working with the pair at Alameda was Gary Wang, one of the original FTX co-founders.
Caroline Ellison pleads guilty
Ellison’s plea deal with prosecutors in the Southern District of New York, was signed and dated December 18.
Brooklyn former federal prosecutor, Moira Penza, said it “is too early to predict” what her sentence could be. And if she cooperated enough with the DOJ she may even get off with probation.
“It is not unheard of for testifying cooperators, even ones facing as long a sentence as Ms. Ellison, to receive probation rather than any prison term,” Penza explained.
“Ms. Ellison was in the door as early as she could be and didn’t even need to be indicted. She is signaling at every opportunity that she is taking responsibility and is truly remorseful. If she ends up having to testify at trial against SBF or others that would make her cooperation even more significant and be a further argument for reducing her sentence,” Pensa added.
Ellison waives the right to defend herself against the charges. As part of the deal, she must cooperate fully with prosecutors, the FBI, and any other law-enforcement agencies. She will also be required to provide documents, records, and evidence to prosecutors. And she will have to testify to a grand jury and/or any other trials where she is requested.
Missing billions
On November 11, Bahamas-based FTX filed for Chapter 11 bankruptcy protection. And Bankman-Fried stepped down as CEO. The crypto company collapse resulted in billions in customer funds disappearing overnight.
On November 13, Reuters reported that prior to filing for bankruptcy Bankman-Fried covertly transferred $10 billion in customer funds from FTX to Alameda. And that between $1 to $2 billion went missing.
On Wednesday night, Bankman-Fried was extradited from the Bahamas and landed back in New York. And he will appear in a federal court in Manhattan to determine bail and face formal criminal charges including 8 counts of fraud.
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