FTX customer money bought SBF’s parents a $16.4M house in the Bahamas, expert says
As of June 2022, $228 million of the $11.3 billion FTX was supposed to be holding for its customers had been spent on real estate
Artwork by Crystal Le
Sam Bankman-Fried’s parents have been sitting quietly in the courtroom for nearly the entire duration of his criminal trial – which is now on its third week – but they can’t avoid witnesses mentioning their names.
The government on Wednesday produced a deed to a $16.4 million property in the Bahamas, almost certainly purchased with FTX customer funds, according to an expert. The owners? Joe Bankman and Barbara Fried.
Fried, who has hardly left the courtroom since her son’s criminal trial started on Oct. 3, was in her usual spot a few rows back when the prosecution presented the deed. She showed no strong visual reaction.
Peter Easton, an accounting professor at Notre Dame, took the stand on Wednesday and delivered some unexpected revelations. He presented the results of his comprehensive analysis of thousands of pages of bank statements and internal data from FTX.
Read more: Former FTX lawyer ‘shocked’ by missing $7B
As of June 2022, $228 million of the $11.3 billion FTX was supposed to be holding for its customers had been spent on real estate, Easton said. An additional $195.2 million went to what Easton classified as the “insiders,” or executives at FTX and Alameda.
FTX had only around $2 billion of the $11.3 billion it owed to customers in June 2022, Easton added.
Easton, the government’s second expert witness, confirmed to the jury that the vast majority of FTX customer funds went to the wrong places.
Political donations, real estate, venture investments and repayments to third party lenders make up the majority of what Bankman-Fried and his team spent the customer money on, Easton said.
At its peak toward the end of November 2021, Alameda had borrowed a total of $15.4 billion, Easton said. By November 2022, 68% of the total amount of third party loan repayments were made using customer funds, he added.
Easton, who raked in more than $100,000 for his work for the prosecution, plus additional fees he’ll collect from taking the stand after his testimony concludes, rounded out what legal experts are calling an air-tight narrative for the prosecution.
Easton’s analysis was shown side-by-side with internal Slack messages and emails from Bankman-Fried and his associates, confirming that leaders knew where the money was going.
In one email entered into evidence, Fried chimes in on a discussion about political contributions, the majority of which were also made using FTX customer money, Easton said.
The government concluded their direct examination of Easton Wednesday afternoon before the court recessed for lunch. The defense will have their chance to poke holes in his narrative when testimony resumes.
Don’t miss the next big story – join our free daily newsletter.