Sam Bankman-Fried is reportedly covering his legal defense fees using funds from Alameda Research.
The funds are part of a $10 million gift to SBF’s father, which was given using a loan from Alameda.
The gift was sent in 2021 and was subject to a lifetime estate and gift tax exemption.
Sam Bankman-Fried has reportedly been paying his legal defense team using funds that originally belonged to Alameda Research. The quantitative trading firm that the former FTX CEO founded back in 2017. After claiming earlier this year that he was down to his last $100,000, the disgraced CEO has turned to funds that he gifted to his father, Joseph Bankman, in order to afford his lawyers’ fee.
Sam Bankman-Fried gifted $10 million of Alameda’s funds to his father
According to a report by Forbes, Sam Bankman-Fried gifted at least $10 million to his father in 2021. The gift was funded by a loan that he took from FTX’s sister firm Alameda Research, two sources familiar with the operations of both companies revealed. Bankman-Fried subsequently took advantage of a lifetime estate and gift tax exemption to send the funds to Joseph Bankman tax-free. It is believed that the actual gift amount was close to $11.7 million, which is the maximum that one is allowed to give tax-free in their lifetime.
Sam Bankman-Fried’s legal defense team consists of former prosecutors Mark Cohen and Christian Everdell of Cohen & Gresser. A source close to the disgraced CEO told Forbes that his legal bill is “likely in the single-digit-millions range.” He is also receiving pro-bono advice from David W. Mills, a criminal defense attorney, who is close with the SBF’s family and works with Joseph Bankman at Stanford.
Bankman-Fried, who is awaiting trial, already faces charges related to the misappropriation of funds belonging to FTX customers by funneling them through Alameda Research. The U.S. Department of Justice brought 12 other criminal charges, including wire fraud, money laundering, and securities fraud. He was hit with a bribery charge earlier this week over $40 million in bribes given to Chinese officials.