- Bankrupt Crypto Exchange FTX filed a proceeding on September 18 against its ex-CEO and founder SBF’s parents for misappropriating millions of dollars from the company.
- FTX claims that SBF’s parents discussed with their son the transfer of a $10 million cash gift and a $16.4 million luxury property in the Bahamas.
- SBF is currently in jail pending a court hearing that is slated on October 3 for the collapse of FTX in late 2022, which lost millions of dollars.
FTX is looking to get back a multi-million dollar property and millions of dollars that were misappropriated and fraudulently transferred to Joe Bankman and Barbara Fried, the parents of the defunct FTX founder and its ex-CEO, Sam Bankman-Fried popularly known as SBF.
In a lawsuit filed on September 18 in Delaware, the crypto firm accuse SBF’s parents, who both are longtime Stanford Law School professors, of taking at least a $10 million cash gift from Sam Bankman-Fried, as well as a $16.4 million home in the Bahamas.
SBF”s Parents ‘knew or blatantly ignored “ the Fraud – FTX
The lawsuit has claimed that, Mr. Bankman and his wife Barbara Fried, ‘knew or blatantly ignored everything that was left to be seen with a naked eye that their son, Sam Bankman-Fried, and other FTX Insiders were orchestrating a vast fraudulent scheme.’
In addition to that and among other transactions, Bankman is accused of channelling some $5.5 million to Stanford University. These donations that ‘did not benefit the FTX Group, and instead amounted to naked self-dealing by Bankman, who sought to carry favour with and enrich his employer at the FTX Group’s expense.’
The disastrous collapse of the firm invited scrutiny of Bankman, a tax law professor and formal employee of FTX, who was heavily involved in the company’s philanthropic initiatives, while Fried ran a massive political-donor network that SBF and FTX helped finance.
According to the suit, Bankman helped facilitate millions of dollars in loans to top FTX employees and was listed on internal company documents as a manager of the company.
In one set of messages cited in the suit, Bankman complained about receiving a salary of just $200,000, significantly less than the $1 million per year he had been expecting.
In January 2022, Bankman complained to the FTX.US Head of Administration that he was not receiving the amount to which he believed he was entitled. He then brought the issue to his son’s attention, writing: ‘Gee, Sam I don’t know what to say here. This is the first [I] have heard of the 200K a year salary! Putting Barbara on this,’ meaning, he was bringing in his wife and SBF’s mother to lobby for a massive salary increase.
Two weeks later, SBF gave Bankman and Fried $10 million that originated from Alameda Research Ltd., FTX’s sister hedge fund, according to the suit.
Within three months, SBF gave the couple a $ 16.4 million Bahamian property paid for with funds provided by FTX Trading. The property is under police protection as the investigation continues.
Even though the couple denies the allegations saying they are completely false, Stanford University said they will return the funds awarded to them by the ex-FTX Sam Bankman-Fried.
In a statement, Bankman and Fried’s attorneys (Sean Hecker, counsel to Bankman, and Michael Tremonte, counsel to Fried) said, ‘This is a dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their child’s trial begins. These claims are completely false. Mr. Ray and his massive team of lawyers, who are collectively running up countless millions of dollars in fees while returning relatively little to FTX clients, know better.’
Stanford University, in a statement, said the institution will be returning the funds ‘in their entirety.’
‘Stanford received gifts from the FTX Foundation and FTX-related companies largely for pandemic-related prevention and research. We have been in discussions with attorneys for the FTX debtors to recover these gifts and we will be returning the funds in their entirety,’ said Dee Mostofi, a university spokesperson.
Sam Bankman-Fried is currently jailed and awaiting trial for the late 2022 collapse of FTX, which lost clients billions of dollars
He remains under federal indictment and awaits trial on money laundering and fraud charges in connection to FTX’s stunning collapse.
The 31-year-old’s trial is set to begin on October 3. He has pleaded not guilty.
