5 ms·

> The other payment and loan totals described by FTX yesterday were $587 million to Nishad Singh, $246 million to Zixiao "Gary" Wang, $87 million to Ryan Salame

by Shank 4y ago

> The other payment and loan totals described by FTX yesterday were $587 million to Nishad Singh, $246 million to Zixiao "Gary" Wang, $87 million to Ryan Salame, $25 million to John Samuel Trabucco, and $6 million to Caroline Ellison. Singh, Wang, and Ellison have pleaded guilty to criminal fraud charges and are cooperating with government prosecutors. SBF running off with $2.2B really makes Caroline's $6m look quaint. I mean, why even go after her for (relative) pennies? The compensation gap between SBF and his underlings just goes to show you that wealth inequality exists even in corrupt organizations. Her charges will be far less, but it goes to show you that even in crime you're being stiffed unless you're at the absolute top of the food chain.

makestuff 4y ago
They went after her to get to SBF. Basically a "you cooperate with us or you could end up with 20 years in prison yourself." While SBF received much more, I wonder how much in total benefits everyone received. The penthouse, private jets, and vacations probably add up quick.
- HWR_14 4y ago
  Compared to SBF's 2.2 billion, Singh's 587 million or even Wang's 246 million, a couple of years of jetsetting in private jets and free rent on an apartment is a rounding error.
  - tannhauser23 4y ago
    They're going after her because she enabled the much larger theft, not just because she took six mil herself.
    - HWR_14 4y ago
      I understand why they went after her (although stealing 6 million should also be punished, even if no one else stole anything). I was respond to: > While SBF received much more, I wonder how much in total benefits everyone received. The penthouse, private jets, and vacations probably add up quick. They don't add up quick. Not in any meaningful sense.
- seviu 4y ago
  I wonder why nobody is talking about Trabuco. He was the one Carolina replaced just months away from FTX going down. He is probably more guilty than her. He was however smart enough to see what was cooking and decided to walk away.
tempsy 4y ago
this is not “compensation”. it was money borrowed from the company.
- wmf 4y ago
  If it was truly borrowed, how would it have been repaid? From future compensation. It's just shifting compensation in time.
runako 4y ago
> why even go after her for (relative) pennies? Because (potentially) stealing $6 million is still a very large crime in the absolute sense, even if it is smaller than other related crimes. Because it would be bad to alert white-collar criminals to the fact that they can escape prosecution by not being the largest participant in the criminal enterprise. Because $6 million is roughly 1000x larger (not a typo) than the typical bank robbery, which carries a 20-year sentence, and we don't advocate for non-prosecution of $500 bank robberies. Because it's only fair in a justice system that routinely imprisons people for stealing much smaller amounts.
- dralley 4y ago
  And because she's a juicy target for flipping on the rest of them. In the end she's going to make off much better than the rest, in all likelihood.
  - runako 4y ago
    Maybe? I would imagine their case is pretty strong without her flipping on the rest of them. She will get some credit for pleading guilty, but she was CEO of a criminal enterprise while it was actively involved in criminal activity. She's not going to die old in prison, but in all likelihood she will do at least 10-15 years. As things stand today, she could be sentenced to 110 years for what she's already pled to; she's really got to make the prosecutors happy if she ever wants to live outside again.
    - edmundsauto 4y ago
      There is often lots of evidence in fraud cases of what happened, but the mens rea of knowingly committing fraud is bolstered by having a close partner testify. It can otherwise be difficult for the jury to differentiate negligent incompetence from willful fraud, especially in complex scenarios like most financial fraud.
    - cipheredStones 4y ago
      If I've learned anything by reading Popehat (Ken White), it's that the "faces up to X years in prison" lines you see in news articles are totally uninformative - there's a complex set of sentencing guidelines that determines the actual range of possibilities. I don't know what that range is in this case, but I very much doubt the top end is anywhere close to 110 years. Edit: One such article for illustrative purposes: https://www.popehat.com/2013/02/05/crime-whale-sushi-sentence-eleventy-million-years https://www.popehat.com/2013/02/05/crime-whale-sushi-sentenc... . In this case, the news-headline number is "up to 77 years" and the plausible range Popehat calculates is 2-2.5 years.
lukas099 4y ago
> wealth inequality exists even in corrupt organizations. I'd argue that it's worse in corrupt organizations. Sometimes much worse.
Invictus0 4y ago
Is this the most white collar comment on HN? I'm sure you're also in favor of prosecuting the guys stealing detergent at CVS right?
MengerSponge 4y ago
Our little monkey brains can't really reason about numbers that big. At some point it just becomes $*illions. The Other Guys played with this for comedic effect, but you see the same nonsense everywhere.
cornholio 4y ago
Ellison was Bankman's principal co-conspirator, fully aware that Alameda was a bucket shop operating on money unlawfully borrowed from FTX customers, with privileged access to the exchange thus further defrauding customers, and a massive money black whole due to the trades she organized and supervised. This hemorrhaging of money bankrupted FTX in the end, not the occasional billion here and there borrowed by Bankman. Ellison couldn't have not known this state of affairs, yet she kept the lights on and most of her staff in the dark until the very last day when everything started crumbling around her. She fully deserves to go to jail for a long time, but probably won't since she was smart enough to get the early worm in terms of deals with the prosecution.
- deleted 4y ago
  [deleted]
vkou 4y ago
> I mean, why even go after her for (relative) pennies? Because when the feds go after her, she is strongly incentivized to flip, and cooperate in kicking the stool out from under SBF. And because 6 million is big enough of a fraud that you can do a decade for it in Club Fed all on its own. If that were the only fraud that took place with FTX, she'd still deserve to be fully investigated and prosecuted for it.
roland35 4y ago
There is definitely enough "crime" to go around here. In any other context $6,000,000 is a heck of a lot of theft!
wnevets 4y ago
> The compensation gap between SBF and his underlings just goes to show you that wealth inequality exists even in corrupt organizations. Related to this is an interesting piece from Freakonomics[1] about drug gangs. They claim wealth inequality existing in corrupt organizations like drug gangs is a necessity. [1] https://genius.com/Steven-levitt-the-freakonomics-of-mcdonalds-vs-drugs-annotated https://genius.com/Steven-levitt-the-freakonomics-of-mcdonal...
eastbound 4y ago
> The compensation gap between SBF and his underlings just goes to show you that wealth inequality exists even in corrupt organizations. In the first Freakinomics book you learn that they once had found the accounting of a major drug cartel in NYC and the wage distribution from shoofer (?) on the street to the refiller, the dealer, the neighborhood lord, all the way to the top manager… was the same as at McDonald’s. Feels like none of those laws helped, we’re stuck with a “natural distribution”.
owaislone 4y ago
> I mean, why even go after her for (relative) pennies? Because it is still a crime and it would signal other criminals that they can be part of billion dollar scams, make 10s of millions and not be charged of fraud.

by Shank 4y ago

makestuff 4y ago

They went after her to get to SBF. Basically a "you cooperate with us or you could end up with 20 years in prison yourself." While SBF received much more, I wonder how much in total benefits everyone received. The penthouse, private jets, and vacations probably add up quick.

HWR_14 4y ago
Compared to SBF's 2.2 billion, Singh's 587 million or even Wang's 246 million, a couple of years of jetsetting in private jets and free rent on an apartment is a rounding error.
- tannhauser23 4y ago
  They're going after her because she enabled the much larger theft, not just because she took six mil herself.
  - HWR_14 4y ago
    I understand why they went after her (although stealing 6 million should also be punished, even if no one else stole anything). I was respond to: > While SBF received much more, I wonder how much in total benefits everyone received. The penthouse, private jets, and vacations probably add up quick. They don't add up quick. Not in any meaningful sense.
seviu 4y ago
I wonder why nobody is talking about Trabuco. He was the one Carolina replaced just months away from FTX going down. He is probably more guilty than her. He was however smart enough to see what was cooking and decided to walk away.

tempsy 4y ago

this is not “compensation”. it was money borrowed from the company.

wmf 4y ago
If it was truly borrowed, how would it have been repaid? From future compensation. It's just shifting compensation in time.

runako 4y ago

> why even go after her for (relative) pennies? Because (potentially) stealing $6 million is still a very large crime in the absolute sense, even if it is smaller than other related crimes. Because it would be bad to alert white-collar criminals to the fact that they can escape prosecution by not being the largest participant in the criminal enterprise. Because $6 million is roughly 1000x larger (not a typo) than the typical bank robbery, which carries a 20-year sentence, and we don't advocate for non-prosecution of $500 bank robberies. Because it's only fair in a justice system that routinely imprisons people for stealing much smaller amounts.

dralley 4y ago
And because she's a juicy target for flipping on the rest of them. In the end she's going to make off much better than the rest, in all likelihood.
- runako 4y ago
  Maybe? I would imagine their case is pretty strong without her flipping on the rest of them. She will get some credit for pleading guilty, but she was CEO of a criminal enterprise while it was actively involved in criminal activity. She's not going to die old in prison, but in all likelihood she will do at least 10-15 years. As things stand today, she could be sentenced to 110 years for what she's already pled to; she's really got to make the prosecutors happy if she ever wants to live outside again.
  - edmundsauto 4y ago
    There is often lots of evidence in fraud cases of what happened, but the mens rea of knowingly committing fraud is bolstered by having a close partner testify. It can otherwise be difficult for the jury to differentiate negligent incompetence from willful fraud, especially in complex scenarios like most financial fraud.
  - cipheredStones 4y ago
    If I've learned anything by reading Popehat (Ken White), it's that the "faces up to X years in prison" lines you see in news articles are totally uninformative - there's a complex set of sentencing guidelines that determines the actual range of possibilities. I don't know what that range is in this case, but I very much doubt the top end is anywhere close to 110 years. Edit: One such article for illustrative purposes: https://www.popehat.com/2013/02/05/crime-whale-sushi-sentence-eleventy-million-years https://www.popehat.com/2013/02/05/crime-whale-sushi-sentenc... . In this case, the news-headline number is "up to 77 years" and the plausible range Popehat calculates is 2-2.5 years.

lukas099 4y ago

> wealth inequality exists even in corrupt organizations. I'd argue that it's worse in corrupt organizations. Sometimes much worse.

Invictus0 4y ago

Is this the most white collar comment on HN? I'm sure you're also in favor of prosecuting the guys stealing detergent at CVS right?

MengerSponge 4y ago

Our little monkey brains can't really reason about numbers that big. At some point it just becomes $*illions. The Other Guys played with this for comedic effect, but you see the same nonsense everywhere.

cornholio 4y ago

Ellison was Bankman's principal co-conspirator, fully aware that Alameda was a bucket shop operating on money unlawfully borrowed from FTX customers, with privileged access to the exchange thus further defrauding customers, and a massive money black whole due to the trades she organized and supervised. This hemorrhaging of money bankrupted FTX in the end, not the occasional billion here and there borrowed by Bankman. Ellison couldn't have not known this state of affairs, yet she kept the lights on and most of her staff in the dark until the very last day when everything started crumbling around her. She fully deserves to go to jail for a long time, but probably won't since she was smart enough to get the early worm in terms of deals with the prosecution.

deleted 4y ago
[deleted]

vkou 4y ago

> I mean, why even go after her for (relative) pennies? Because when the feds go after her, she is strongly incentivized to flip, and cooperate in kicking the stool out from under SBF. And because 6 million is big enough of a fraud that you can do a decade for it in Club Fed all on its own. If that were the only fraud that took place with FTX, she'd still deserve to be fully investigated and prosecuted for it.

roland35 4y ago

There is definitely enough "crime" to go around here. In any other context $6,000,000 is a heck of a lot of theft!

wnevets 4y ago

> The compensation gap between SBF and his underlings just goes to show you that wealth inequality exists even in corrupt organizations. Related to this is an interesting piece from Freakonomics[1] about drug gangs. They claim wealth inequality existing in corrupt organizations like drug gangs is a necessity. [1] https://genius.com/Steven-levitt-the-freakonomics-of-mcdonalds-vs-drugs-annotated https://genius.com/Steven-levitt-the-freakonomics-of-mcdonal...

eastbound 4y ago

> The compensation gap between SBF and his underlings just goes to show you that wealth inequality exists even in corrupt organizations. In the first Freakinomics book you learn that they once had found the accounting of a major drug cartel in NYC and the wage distribution from shoofer (?) on the street to the refiller, the dealer, the neighborhood lord, all the way to the top manager… was the same as at McDonald’s. Feels like none of those laws helped, we’re stuck with a “natural distribution”.

owaislone 4y ago

> I mean, why even go after her for (relative) pennies? Because it is still a crime and it would signal other criminals that they can be part of billion dollar scams, make 10s of millions and not be charged of fraud.