On March 28, 2024, Samuel Bankman-Fried, the founder of the cryptocurrency trading firm Alameda Research and the cryptocurrency exchange FTX, was sentenced to 25 years in federal prison for his role in several fraud schemes. He was additionally sentenced to three years of supervised release following his prison term and required to forfeit USD 11 billion in illegal proceeds. In his roles, he defrauded customers, investors and lenders of more than USD 8 billion.
This sentence was handed down after Bankman-Fried was convicted by a jury on a total of seven charges. These included two counts of wire fraud, two counts of conspiracy to commit wire fraud, one count of conspiracy to commit securities fraud, one count of conspiracy to commit commodities fraud and one count of conspiracy to commit money laundering. He is currently appealing the conviction.
The United States Sentencing Guidelines recommends more lenient sentences for cooperating with investigations, such as pleading guilty and self-disclosing wrongdoing. Accordingly, it is common for those who are convicted at trial to receive more severe sentences than those who plead guilty.
Bankman-Fried’s sentence may have been enhanced based on his behavior during the trial and investigation. Several media sources, including Time, quoted judge Lewis Kaplan as stating that Bankman-Fried did not claim responsibility for his actions or express remorse. Kaplan also claimed that Bankman-Fried perjured himself three times during the trial, showed an “exceptional flexibility with the truth,” and put on a “performance.”
Because the sentencing guidelines are advisory, federal judges have discretion when sentencing offenders. This can result in wide discrepancies between offenders who have been convicted of similar or identical offenses, even within the same federal jurisdiction.
Internationally, the punishment of financial crimes varies. The noted recent case of Truong My Lan in Vietnam demonstrates this. In her role as Chair of a large real estate development firm, Lan allegedly misappropriated assets and took out unlawful loans through the Saigon Joint Stock Commercial Bank. The Vietnam Investment Review reports that Lan directed in the creation of thousands of fabricated loans with a total value of VND 1066 trillion (USD 44.4 million). Her convictions for multiple counts of embezzlement, giving bribes and "violating regulations on banking operations and other activities related to banking activities" resulted in Lan being sentenced to death under Vietnamese law. Lan appealed her conviction on April 26.
Several other offenders in Vietnam have also been sentenced to death for non-violent financial crimes. An Amnesty International report discussing the death sentence of Duong Quant Tri notes 16 individuals who were sentenced to death or executed for financial crimes between January 2003 and May 2006. More recently, in 2018, the Vietnamese appeals court upheld the death penalty conviction of Nguyen Xuan Son for engaging in a VND 1 trillion (USD 44 million) banking scheme. CNN suggests that using the death penalty for financial criminals is in line with the country’s anti-corruption messaging. Chinese financial crime offenders have also been sentenced to the death penalty.
Below are some recent U.S. cases of federal financial crime convictions, including the sentencing. Unless otherwise noted, the data sources for all the case descriptions are official U.S. Department of Justice press releases.
Individuals Convicted at Trial
Elizabeth Holmes: Holmes was previously the Chair and CEO of the blood testing company Theranos. After a trial, she was convicted of multiple financial crime charges in 2022 related to falsifying her products’ effectiveness and misleading investors.
- Number of convictions: four (one count of conspiracy to commit fraud and three counts of committing fraud).
- Length of incarceration: 135 months plus three years of post-incarceration supervision.
- Amount of financial penalties: USD 452,047,200 restitution (to be paid jointly with Ramesh Balwani, described below).
Ramesh "Sunny" Balwani: Former Theranos President Balwani was convicted after a trial for his role in the Theranos financial crimes. The pair were tried and sentenced separately.
- Number of convictions: 12 (two counts of conspiracy and ten counts of wire fraud).
- Length of incarceration: 155 months plus three years of post-incarceration supervision.
- Amount of financial penalties: USD 452,047,200 restitution (to be paid jointly with Elizabeth Holmes).
Individuals Who Pleaded Guilty
Paradise Williams: Williams was responsible for submitting over 125 fraudulent applications for multiple federal pandemic relief programs including the Paycheck Protection Program and Coronavirus Aid, Relief, and Economic Security (CARES) Act. She made a plea agreement with prosecutors.
- Number of convictions: two (one count of wire fraud and one count of money laundering).
- Approximate amount of damage: more than USD 3.3 million.
- Length of incarceration: five years.
- Amount of financial penalties: restitution of USD 2,791,241 to the U.S. Department of the Treasury; restitution of $512,730 to the U.S. Small Business Administration; forfeiture of $2,023,104 of illegal profits and two vehicles.
Changpeng Zhao (“CZ”): Zhao was the founder and CEO of Binance Holdings Limited, which operates the world’s largest cryptocurrency exchange. The company reached an agreement to pay USD 4 billion to resolve violations of the Bank Secrecy Act. Zhao pleaded guilty for failing to maintain an effective anti-money laundering program. According to Reuters, he was sentenced to four months incarceration on April 30, 2024.
- Number of convictions: one (failure to maintain an effective anti-money laundering program).
- Approximate amount of damage: USD 1.6 billion.
- Length of incarceration: four months.
- Amount of financial penalties: $50 million criminal fine plus USD 50 million to the U.S. Commodity Futures Trading Commission.
Bontiea Bernedette Goss and Tommy Ray Goss: Bontiea and Tommy Goss were COO and CFO of Preferred Family Healthcare Inc., a healthcare nonprofit serving individuals across several U.S. states. The pair pleaded guilty to participating in bribes and kickbacks in cooperation with elected state officials in Arkansas.
- Number of convictions: one for Bontiea Goss (conspiracy to commit offense or to defraud United States); two for Tommy Goss (conspiracy to commit offense or to defraud United States and aiding and assisting in the preparation and presentation of false returns).
- Approximate amount of damage: unknown.
- Length of incarceration: 36 months plus three years of post-incarceration supervision for Bontiea Goss; 72 consecutive months plus two years of post-incarceration supervision for Tommy Goss.
- Amount of financial penalties: USD 250,000.00 fine each; USD 4.35 million in forfeiture and/or restitution to be paid jointly.
