On Wednesday, summations for Sam Bankman-Fried's criminal fraud case commenced. Nicolas Roos, Assistant U.S. Attorney, informed the jury that Bankman-Fried "used deceit to obtain funds, which were then squandered by him." Bankman-Fried, who entered a plea of not guilty for all accusations, would face a possible life imprisonment if found guilty.
In the ongoing criminal fraud trial of Sam Bankman-Fried, prosecutors in their closing argument on Wednesday reminded the jury why they had been in the lower Manhattan courtroom for the past four weeks.Assistant U.S. Attorney Nicolas Roos outlined that there was no real debate on the fact that around $10 billion in customer funds belonging to the crypto exchange FTX had gone missing. Some of it, he said, had been used for buying real estate, making investments, repaying loans and giving political donations.The prosecutor posed the main query before the jury to be answered: whether or not Bankman-Fried knew that taking the funds was illegal. Roos pointed out that Bankman-Fried had allegedly "schemed and lied to get money, which he spent".The 31-year old defendant, who is the son of two Stanford legal scholars and a former graduate from the Massachusetts Institute of Technology, has pleaded not guilty and is exposed to a possible life sentence if convicted on the charges related to the collapse of FTX and sister hedge fund Alameda Research.The trial nearing its end has put forth the testimonies of Bankman-Fried's close friends and colleagues against the sworn statements made by their former boss and, in many cases, former roommate. The government's primary witnesses have been Caroline Ellison, Bankman-Fried's ex-girlfriend and previous head of Alameda, and FTX co-founder Gary Wang, who was Bankman-Fried's childhood companion from math camp. Both had pleaded guilty to multiple counts in December and testified for the prosecution.
Lead counsel Mark Cohen allowed Bankman-Fried to take the stand, where the defendant declared he had not committed fraud or taken any customer money, nor had he intentionally tried to cause FTX's failure. Roos asked the jury to consider the evidence and asked, "Who is responsible?" before gesturing towards the defendant and saying "This man, Samuel-Bankman-Fried." Roos went on to accuse Bankman-Fried of creating a "pyramid of deceit" that fed into FTX's ultimate collapse. He reminded the jury that customers had believed their funds were their own, FTX ads touted the exchange as safe and easy, and that $10 billion had gone missing.
Roos reminded the jury of Bankman-Fried's smoothness when answering questions from his attorney, followed by being "a different person" when questioned by prosecutors. This suspecting man with a perfect memory about his California Airbnb office, the reason for going to Hong Kong and selecting the Miami Heat arena for FTX's sponsorship, suddenly began replying with "I can't recall" over 140 times. To believe this tale, Roos said, "you'd have to ignore the evidence" and accept that such a highly educated man responsible for building two multibillion-dollar companies was "actually clueless."
Roos asserted that FTX's collapse was inextricably linked to the use of customer funds to cover losses in Alameda's books after last year's crypto crash; something which, according to Roos, Bankman-Fried was fully aware was wrong and thus kept hidden from the public. Roos went on to state that Bankman-Fried's explanations were lies, and had investors known the truth "they would have run for the exits". Bankman-Fried had claimed the errors were due to "messy accounting," an explanation Roos dismissed as "implausible". In court, a juror was delayed in traffic, resulting in a technical issue with the monitors in the jury box that necessitated a 1-minute break. Roos also brought up Ellison's spreadsheet of seven alternate versions of Alameda's finances which Bankman-Fried had seen, but claimed he didn't remember the details and hadn't asked any questions about it.
Roos cited metadata that showed Bankman-Fried taking part in a discussion for roughly half an hour in relation to the financial issues FTX was having and how to repay the lenders. It was also mentioned that the executive was reviewing a Google Doc with the details of the loans FTX had taken out worth billions. Three witnesses who stated Bankman-Fried had communicated with them about the entity's large deficit, with Ellison noting that it was impossible to pay off and Singh testifying that the executive had conceded to him that "they were lacking in what they had promised to deliver." In Roos' opinion, Bankman-Fried "had been incredibly presumptuous in thinking he would not face any consequences".
Roos told the jury that Bankman-Fried's tweeting testified to the defendant's intent, referencing his thread sent when he knew there was only enough money to process one-third of client assets which stated "assets are fine" while a bank run was happening. Roos further revealed that Bankman-Fried had a negative net asset value of $2.7 billion but wanted to make additional venture investments of $3 billion and so used customer funds. As if this weren't enough he even diverted client proceeds towards a $30 million penthouse in the Bahamas and $16 million for his parents' home. Roos summarized the defendant as a "celebrity chaser" in noting his Super Bowl picture with Katy Perry and others. He then went on to explain a timeline of key moments; Bankman-Fried was aware of FTX's $13.7 billion hole on Sept. 1, wrote a memo proposing Alameda's shutdown on Sept. 7, paid himself $4million on Sept. 22, sent $250 million to Modulo Capital in the Bahamas on Sept. 26, and then on Oct. 3, dispensed $6 million for political donations. Concluding his argument to the jury, Roos declared, "That's all you need to know to find him guilty." -- CNBC's Dawn Giel contributed to this report. WATCH: Closing arguments underway in SBF trial
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