Ahead of Sam Bankman-Fried going on trial next week for allegedly perpetuating one of the biggest financial frauds in U.S. history, his long-esteemed Stanford law professor mother has lashed out at various entities she believes are to blame for her son’s legal troubles, as well as the destruction of her own reputation and that of her husband, Joseph Bankman.
In a lengthy New Yorker profile of Bankman-Fried’s “family bubble,” the emerita professor descried the “McCarthyite” actions of the U.S. Attorney’s Office and the bankruptcy estate of FTX, her son’s failed cryptocurrency empire. She wrote about a “relentless pursuit of total destruction” in an email to New Yorker writer Sheelah Kolhatkar.
This pursuit, she said, has enabled “a credulous public” and the media to “unfairly” assume that her 31-year-old son is guilty because it has failed to examine weaknesses in the government’s case, the New Yorker reported.
“It takes a lifetime to build up a reputation as honorable people,” Fried wrote in the email. “It takes five minutes to destroy it, which they now have done.”
Elsewhere in the profile, Fried refuses to entertain the possibility that her son, who is remembered as a brilliant, precocious but socially challenged youngster, did anything other than make some “mistakes.”
To prosecutors, Bankman-Fried was “sociopathic in his deception,” according to another profile of the entrepreneur and his privileged academic family in Bloomberg. Bankman-Fried didn’t just con investors, but also business partners and his own employees, in the view of prosecutors. That means “it’s not a stretch to think he might have used his own parents — along with their towering academic careers — to pump an exploitative enterprise,” Bloomberg reported.
Fried told the New Yorker that she didn’t even consider asking her son if had committed any of the crimes he was charged with. Bankman-Fried faces life in prison if convicted on multiple federal charges of fraud, money laundering and campaign finance violations. She said she didn’t need to ask because she didn’t believe he is capable of “dishonesty or stealing.”
“Sam will never speak an untruth,” she went on. “It’s just not in him.”
Fried’s comments to the New Yorker come after the FTX bankruptcy estate filed a lawsuit last week that suggests that Bankman-Fried didn’t need to exploit his parents because they were willing participants in his company’s stratospheric rise and collapse. The lawsuit alleges that the fortunes of FTX were “a family affair,” as Coindesk reported.
Prosecutors haven’t filed charges against the couple, but the lawsuit has accused Fried and Bankman, who is on leave from Stanford, of misappropriating millions in company assets and playing a key role in alleged misdoings at the company.
“Bankman and Fried exploited their access and influence within the FTX enterprise to enrich themselves, directly and indirectly,” the company’s complaint, filed Sept. 18, said. It listed the multiple ways in which Fried and Bankman directed operations behind the scenes and enjoyed luxurious perks and access to fame and influence.
Bankman-Friend has said his parents “weren’t involved in any of the relevant parts” of the business, and the couple’s attorneys said the lawsuit’s claims are “completely false,” the New Yorker reported. But prosecutors have said “they were very much involved,” Coindesk reported.
Bankman, a tax expert, portrayed himself “as the proverbial adult in the room” as he worked “alongside inexperienced fellow executive officers, directors and managers responsible for safeguarding billions of dollars,” the lawsuit said. He “received millions of dollars in unearned ‘gifts’ and real property, flew on privately-chartered jets, expensed $1,200-per-night hotel stays to the FTX Group, and even appeared in a Super Bowl commercial with ‘Seinfeld’ writer Larry David months before the FTX Group imploded.”
Fried, meanwhile, was the “single most influential advisor” to Bankman-Fried’s political contributions, repeatedly calling on her son to give millions of dollars directly to a political action committee that she co-founded and for which she served as president and chairwoman, the lawsuit also said, according to Coindesk.
In all, the lawsuit alleged that the couple in 2022 netted $26 million in cash and real estate in the Bahamas, where FTX was headquartered. “They were regular fixtures at the company’s offices, offered words of encouragement to employees and were included in internal company communications. Their reputations and connections were essential to FTX’s success,” Bloomberg also reported.
When it comes to the property, the couple regularly stayed in a $16 million beachside apartment in the Bahamas. The deed was in their name. But through their spokesperson, Bankman and Fried have said that they saw the apartment as company property, not theirs, Bloomberg reported.
Fried told the New Yorker that she and her husband are less concerned about their legal difficulties than their son’s. They went to great lengths to secure his release from custody pending trial, following his arrest in the Bahamas last December. To meet the historically high bail of $250 million, the couple put up their home on the Stanford campus as security and relied on two Stanford friends to serve as guarantors.
During Bankman-Fried’s time on home confinement in his family’s home, he took over his mother’s study for his own office, where he said he worked on his defense, the New Yorker said. At one point during writer Kolhatkar’s visit, Fried popped in to ask her son if pasta and vegetables worked for dinner.
“Bankman-Fried, who barely spoke to his parents while in my presence, nodded,” Kolhatkar said.
Fried appeared to be devastated when her son was ordered to return to prison in August, after prosecutors accused him of leaking damaging information about a former employee as part of an attempt to intimidate witnesses, Bloomberg reported.
As her son was taken into custody, Fried sobbed and tried to approach him. “That’s my son!” she said when a U.S. marshal stopped her. Bankman put his arm around Fried’s shoulders while she cried some more.
Before her son was returned to prison, Fried told Kolhatkar: “I don’t care what is said about me, Joe doesn’t care what is said about him. Saving Sam is the major project of our lives.”
