According to two sources close to FTX, Sam Bankman-Fried, the disgraced co-founder, gave his father, Stanford Law professor Joseph Bankman, millions of dollars. The funds are reportedly being used to pay for legal costs. The sources said that Bankman-Fried allegedly gave “at least $10 million” from the now-defunct quantitative trading firm Alameda Research to his father.
Sources Claim SBF’s Legal Defense Is Paid for by Alameda Loot
After the latest revised indictment charges against Sam Bankman-Fried (SBF), Forbes reports that funds tied to Alameda Research may be paying for SBF’s legal defense. Forbes contributors Sarah Emerson and Steven Ehrlich explained that two unnamed sources disclosed that SBF directed “at least $10 million from Alameda” to his father, Joseph Bankman. The duo is accused of using a “lifetime estate and gift tax exemption” for the funds, which were allegedly given to Bankman in 2021.
SBF has pleaded not guilty to his indictment charges, and last year, he publicly stated that he had only $100,000 in his bank account. According to Forbes reporters, “it had remained unclear, until now, how the former billionaire would afford his pricey defense.” At the end of 2022, it was disclosed that SBF would be represented by white-collar lawyer Mark Cohen. Cohen and his litigation firm, Cohen & Gresser, are well-known for representing Ghislaine Maxwell, a convicted sex trafficker and confidant of Jeffrey Epstein.
The two sources informed Forbes that in 2021, SBF made a large monetary gift to his father, funded by a loan derived from Alameda Research. The Forbes reporters, Emerson and Ehrlich, noted that Cohen & Gresser “did not respond to a request for comment,” and “Bankman-Fried declined to comment” on the matter. The reporters also stated that SBF’s father “did not respond to a list of questions” sent to him. They further added that despite it being a gift, the funds still need to be filed with the Internal Revenue Service (IRS).
The Forbes article follows federal prosecutors’ addition of bribery charges to SBF’s indictment, accusing him of paying off Chinese government officials. The new charge alleges that the former FTX CEO utilized $40 million to influence “one or more Chinese government officials” in 2021. Prior to the latest charges, bank fraud charges were added to SBF’s indictment at the end of February 2023. Joseph Bankman has not been charged with any wrongdoing. However, current FTX CEO John J. Ray III told members of the U.S. Congress that Joseph Bankman and “the family certainly received payments” from FTX.