Paul Tuchman, a former U.S. prosecutor and partner at the law firm Wiggin & Dana, said the strength of Ellison’s testimony before Bankman Freed also likely went a long way in persuading the judge to impose a lenient sentence.
Testifying at Bankman-Fried’s criminal trial in October 2023, Ellison portrayed her ex-girlfriend as the driving force behind the FTX fraud. On the stand, she portrayed Bankman-Fried as pushy and calculating, outlining to the jury his various deceptions, his careful management of his public image, and his twisted relationship with risk. Under questioning by the prosecution, Ellison said Bankman-Fried “was completely comfortable taking risks as long as he thought it had a positive expected value. He talked about being willing to take a big coin flip where if it came up tails, he might lose $10 million, but if it came up heads, he’d gain a little over $10 million.”
Ellison cried on the stand as he recalled the “state of fear” he was in, racked with guilt over the stolen funds, and the strange relief he felt when FTX began to collapse. “I worried every day about what would happen when the truth finally came out,” Ellison said. “I was relieved that I didn’t have to lie anymore.”
“Typically in a case like this, it’s very important for the prosecution to have someone who is close to the main defendant they’re trying and who can persuade the jury,” Tuchman said. “She was an extremely valuable witness in a very important case.”
The judge took that cooperation into consideration. “I’ve seen a lot of cooperators in 30 years, but I’ve never seen anyone like Mr. Ellison,” Judge Kaplan said. It was “remarkable” that “not one” of Mr. Ellison’s testimony or interviews with police differed from the physical evidence in the case, Judge Kaplan said.
The damage Ellison suffered likely also influenced the judge’s lenient sentence. “In this case, Ellison was subjected to a near-harassment situation because of the massive amount of press coverage, plus the fact that her personal love life was exposed to the world, which would have been very painful for everyone,” Tuchman said. “Cooperation would be appreciated more if it produced results, and the results for her were great.”
As Ellison prepares to begin his prison sentence, FTX aides await their own sentencing. Former FTX executives Nishad Singh and Gary Wang, who pleaded guilty to fraud, are scheduled to be sentenced on October 30 and November 20, respectively.
Meanwhile, Bankman Freed is seeking a new trial in an attempt to avoid a lengthy prison sentence for himself. “Sam Bankman Freed has never been presumed innocent…the presiding judge presumed him guilty,” his lawyers wrote in a filing with the U.S. Court of Appeals. But the conviction is unlikely to be overturned, and his decision to fight the charges against him to the end, in contrast to Ellison and the other co-conspirators, may continue to be unfruitful.
“Judge Kaplan is a highly respected judge, especially in complex white-collar crime cases. The brief’s assertion that he got it all wrong is a very tough argument,” Naftalis said. “It is unlikely to be appealed.”
As people filed out of the courtroom on Tuesday, Ellison’s two younger sisters visibly but quietly cried next to their parents. One of Ellison’s lawyers tried to comfort them by touching their backs, but Ellison remained motionless.
Additional reporting by Caroline Haskins.
