SBF Doesn’t Deserve Life In Jail: Bernie Madoff’s Former Prosecutor

Sam Bankman-Fried doesn’t deserve to spend the rest of his life in jail, according to the former U.S. prosecutor who took down Bernie Madoff.

In a new interview with Coinage, attorney Marc Litt shared his prediction that the disgraced FTX founder might be in for a 25- to 35-year sentence when Judge Kaplan weighs all the facts and circumstances on Thursday, despite the fact that prosecutors are proposing he serve 40 to 50 years. In a 116-page filing, prosecutors cited the “extraordinary nature” of Bankman-Fried’s criminal misconduct as sufficient cause for the sentence’s length, adding that “Bankman-Fried’s crimes were serious and long-running, causing billions of dollars in losses and significant harm to tens of thousands of victims financially and emotionally.”

“I personally think the guidelines do overstate the seriousness of the offense,” Litt said. “I don’t think whatever he did deserves him spending the rest of his life in jail. He’s in his early 30s. That could be 60 years, 70 years, that’s reserved for violent criminals.”

In comparing Bankman-Fried’s potential sentence to the largely symbolic 150 years Madoff was sentenced to, Litt explained that it was rare to see prosecutors out of New York’s Southern District propose a range of time for the judge to consider ahead of a sentencing.

“I’m quite confident they gave it a lot of thought,” Litt said about the sentencing letter, adding that he wouldn’t have boxed in a judge by suggesting a range of time to serve. “I would have written it similar to what we did with Madoff, which was: advocate for the guideline or we would’ve recognized in some way that a below-guideline sentence could be appropriate in this case given [SBF’s] age among other things, but stress the need for the court to send a strong message of deterrence.”

One of the considerations at a sentencing, as laid out in the prosecutors sentencing memo, is appropriate jail time to deter others from potentially committing the same crime. Another is to consider the totality of harms caused by the offense, and to consider the likelihood that the person being sentenced could possibly perpetrate a similar crime if let out of prison sooner.

“We do as a society believe in rehabilitation and redemption as much as we talk a lot about and believe in punishment as well,” Litt said.

Bankman-Fried is expected to be sentenced on March 28, where Southern District of New York Judge Lewis Kaplan’s decision could put Bankman-Fried behind bars for decades. He technically faces a maximum sentence of 110 years when he appears in court on Thursday, though his lawyers have advocated he need not receive more than seven years in prison time for the seven counts he was convicted on. While the size of the fraud committed at FTX is one of the largest at $8 billion, it pales in comparison to size of losses for Madoff’s victims – estimated to be $13 billion at the time of his sentencing.

“I say all this not to diminish what Sam Bankman-Fried did — but there are some differences and you have to have some perspective about it,” Litt said, highlighting that the prosecutors own sentencing memo made mention of Madoff’s sentence – and how the estimate of losses changed wildly as time went on, and now reflects the fact that 91% of losses were eventually recovered.

The FTX estate has said they expect victims to receive almost all of their losses back as they are able to uncover funds and sell off investments that were made during SBF’s tenure as CEO. While those facts were not admissible during the trial – they could very well sway Judge Kaplan’s views at sentencing. As Litt points out, attempts to size victim’s losses in the Madoff sentencing were equally difficult (an inaccurate after the fact.)

“[Madoff] was sentenced 15 years ago, when the loss amount was thought to be $13 billion. A year later, it would’ve been $17.5 billion, and 15 years later the actual loss would be 9% of that,” he said. “People get awfully caught up in the numbers because that’s what the guidelines demand… but somebody’s life and liberty shouldn’t be at risk over those kinds of projections. What is known to the court is what was the conduct. What were the misrepresentations that were made? What were the deceptive acts that were taken?”

All of those facts, brought out at trial – and dissected by Marc Litt in a Coinage exclusive five-part video series – will be on the table when SBF is sentenced on Thursday in Manhattan.

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Disclosure: Alameda Ventures is one investor among many in Trustless Media, the production company behind Coinage.