If “saving” their son had become “the major project” of their lives, Sanford Law professors Joseph Bankman and Barbara Fried looked utterly “defeated” Thursday, with a federal jury taking a little more than four hours to find their adored oldest child, disgraced FTX mogul San Bankman-Fried, guilty in the largest cryptocurrency fraud trial in history.
The couple, once highly popular and respected academics on the Stanford campus, “looked frightened” when they entered the courtroom Thursday in New York, The Verge writer Elizabeth Lopatto reported. Bankman put his arm around his wife as they sat down on the wooden benches. Fried put her head in her hands while their son, who had traded in his “schlubby” shorts and T-shirt for a suit, tie and shorn head for his trial, stood to hear the jury’s verdict.
“After the first ‘guilty’ was read aloud — for wire fraud — his father doubled over,” Lopatto said. “His mother’s hands rose to cover much of her face, either to stifle tears or to hide them.”
Bankman and Fried kept their arms around each other, “as though they were holding each other up,” as the jury left the courtroom, Lopatto said. More minutes passed, as Judge Lewis Kaplan dealt with the dates for appeals, a possible next trial and sentencing. After the judge left, Bankman and Fried tried to move closer to their son as he conferred with his attorneys. However, they were separated from him by the courtroom’s wooden barrier.
The once-high-flying crypto mogul did not look back to see his parents until he was being escorted out of the courtroom. “As he glanced back, Fried crumpled, and her husband steadied her,” Lopatto said.
The jury’s verdict, which found Bankman-Fried guilty of seven counts of fraud and conspiracy, capped a high-profile trial in which the 31-year-old entrepreneur had become a symbol of crypto’s excesses, the New York Times said. He was charged with stealing as much as $10 billion from customers to finance political contributions, venture capital investments, lavish real estate purchases and other extravagant spending.
The jury’s verdict also represents a stunning blow to the narrative of intellectual and moral superiority that Bankman and Fried seemed to build around their cozy family unit, centered around the accomplished couple raising their two sons in a spacious bungalow on a leafy street on the Stanford campus.
As academics, Bankman and Fried shared an interest in using tax law as an instrument of social fairness, the New Yorker reported in a profile the family. When Sam and his younger brother, Gabriel, were growing up, “there was an ongoing household conversation about what it means to conduct an ethical life.” The couple also were known at Stanford for hosting Sunday-night dinner parties, where they encouraged their sons to join in lively adult discussions that ranged “from the global crisis of democracy to movies and campus gossip,” the New Yorker also said. Bankman and Fried “loved that their children had … commitments that were so idealistic and powerful,” Larry Kramer, former dean of Stanford Law School told the New Yorker.
But the collapse of FTX in November 2022 shattered this glowing image of the family. Prosecutors began building a case alleging that Bankman-Fried was a greedy fraudster who built his fallen crypto empire on a “foundation of lies and false promises,” the New York Times said. Reports also raised questions about how how much Bankman and Fried knew about the schemes at FTX, The Verge added. It’s been documented that Bankman-Fried heavily relied on his respected and well-connected parents “for expertise and optics” as he built a company that was once valued at $32 billion, Slate reported.
A lawsuit filed in September by FTX’s bankruptcy executive team alleged that Bankman-Friend referred to his crypto empire as “a family business,” Slate reported. The lawsuit also alleged that his parents “exploited their access and influence within the FTX enterprise to enrich themselves” by millions of dollars and knowingly bilked FTX and its customers in the process.
At one point, Bankman took leave from Stanford to work full time at FTX, providing advice on legal, philanthropic, and tax matters for a salary of $200,000 a year, plus expenses, with the expenses including $1,200-a-night “hotel stays,” the lawsuit alleged, according to Slate. Bankman-Fried also made a $10 million gift to his parents out of funds from Alameda Research, FTX’s sister hedge fund, and he had his parents’ name put on the deed to a $16.4 million Bahamas property with funds “ultimately provided” by FTX, the lawsuit alleged. Meanwhile, Fried allegedly used “tens of millions” in ill-gotten funds from her son’s business to bankroll her political action committee, Mind the Gap, which tries to get Democrats elected to office.
In September, an attorney for Bankman and Fried blasted the lawsuit as “a dangerous attempt to intimidate Joe and Barbara and undermine the jury process just days before their child’s trial begins.” It’s hard to know if the suit will lead to the recovery of FTX funds, “but it does its job of painting SBF’s parents as naifs at best and disingenuous grifters riding their son’s coattails at worst,” Slate said.
During Bankman-Fried’s month-long trial, his parents appeared to “truly suffer,” as the prosecution’s case may have punctured their “delusions” about their son’s innocence, Lopatto wrote,
Before the trial, Fried told the New Yorker: “All four of us care about only one thing, which is Sam’s innocence.” She also insisted that her son was incapable of dishonesty or stealing and said she never felt the need to ask him if he’d done any of the things he’s charged with. She said, “Saving Sam is the major project of our lives.”
Bankman-Fried’s attorney has vowed to appeal, indicating that his parents’ “major project” of “saving Sam” continues, which will cost them dearly in legal fees. The trial and their own FTX entanglement, moreover, has “marred their reputation at the end of their lives.” Fried and Bankman are in their early 70s and late 60s, respectively.
Bankman-Fried is scheduled to be sentenced March 28. The charges carry a maximum of 110 years. Lopatto said it’s likely that he won’t be treated leniently when it comes to sentencing. He didn’t seem to come off as a sympathetic defendant to Judge Lewis Kaplan while testifying because he gave “evasive answers” and didn’t seem seem repentant — or honest, Lopatto said. So, if Bankman-Fried gets even a fraction of those 110 years, one or both of his parents could die while he is in prison.
