Former Madoff Prosecutor says Caroline Ellison Likely Isn't Going to Jail

Bernie Madoff's former prosecutor, Marc Litt, says it's unlikely that former Alameda Research CEO Caroline Ellison receives jail time at her Tuesday sentencing for her role in the FTX collapse.

Ellison pleaded guilty to fraud charges in 2022 stemming from her role at Alameda and cooperated with the government in its case against Sam Bankman-Fried that resulted in a 25-year prison sentence for her former boyfriend.

Given how helpful she was at SBF's trial, Litt says it's unlikely she receives any prison time when Judge Kaplan delivers her sentence.

"I don't view it as a close call," Litt told Coinage after reviewing the robust sentencing memo from prosecutors. "If she got a day in jail, I would fall off my seat."

Interestingly, Polymarket bettors have a much higher likelihood that Ellison receives prison time for her admitted crimes. Before Coinage reported Litt's comments, bettors had about a 45% chance Ellison would receive jail time during her sentencing.

"Well, if I were betting, I suppose I should get into this market, and there'd be a nifty way for me to make a ton of money, because, I mean, if I really had to bet, I would be pretty close to all-in on no jail time," Litt said.

Litt's reasoning stems from the extensiveness of the government's sentencing memo that was provided for Judge Kaplan. Unlike usual memos, which are limited to a few pages, prosecutors spent 14 pages explicitly documenting the "extraordinary" cooperation on the part of Ellison and noted that she was subjected to suspected witness tampering on the part of SBF that led him to being jailed before the trial even began.

"The government cannot think of another cooperating witness in recent history who has received a greater level of attention and harassment," prosecutors wrote.

For that reason, Litt predicted Judge Kaplan would be harsh with his words while reading Ellison's sentence, but that it would be unlikely for such a critical witness to receive prison time — especially after she willingly returned to the United States from abroad.

"Realistically, I'd put the odds at between zero and a year and a day," Litt said about the technical upper limit of 110 years in prison that Ellison faces. "But I don't think, as I said earlier, any kind of jail sentence is in the offing."

Litt also noted that Judge Kaplan is likely well aware that Sam Bankman-Fried's attorneys have filed an appeal to get his case re-tried in front of another judge, citing errors in the way Judge Kaplan led trial. Litt predicted Kaplan would likely contrast how SBF acted in the aftermath of the FTX collapse with how Ellison operated to explain to the court why she should be spared jail time.

As prosecutors noted in their memo, "Ellison steadfastly remained candid and dedicated to telling the truth — as embarrassing as it often was for her — and in assisting with bringing the most culpable party to justice."

Caroline Ellison is expected in court Tuesday afternoon.

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