10 ms·

Well most fraud trials involve a person stealing directly from their company. Atleast SBF took the extra step of first funneling money to Alameda and then dir

Well most fraud trials involve a person stealing directly from their company. Atleast SBF took the extra step of first funneling money to Alameda and then directing Alameda to send it back to him and then send it to his dad as a tax free gift. That way he could honestly say he personally has no money left. That atleast makes it harder for FTX to claw back that money. One interesting thing a lawyer pointed out to me is that a lawyer has a duty to ensure that the money used to pay them wasn't from the proceeds of a crime. I wonder how SBF's lawyers have done thier diligence in this case and satisified themselves that this wont' get them into trouble with the state bar.

blockwriter 4y ago
Aren't tax free gifts capped at $14,000.00 per year? Edit: Er, I guess it's $16,000.00 without needing to report it, and then anything above that can be offset against a $12 ish million lifetime exclusion. https://money.usnews.com/money/personal-finance/taxes/articles/gift-tax-tax-rules-to-know-if-you-give-or-receive-cash https://money.usnews.com/money/personal-finance/taxes/articl...
- rsstack 4y ago
  You need to report a gift over $14k but you don't owe until much higher limits. Same as how people who make very little money have to report income even if it's lower than the lowest tax bracket. Also, as a reminder, the gifter pays the tax and not the person who received the gift. If someone gifts you an illiquid asset, you aren't forced to go into debt to pay a tax. But the gifter has to figure things out on their end.
  - cft 4y ago
    This is correct. The tax thresholds are of the order of 12mm
  - ambicapter 4y ago
    What does the gifter pay tax on? -$14k?
    - rsstack 4y ago
      This isn't an income or gains tax. Not all taxes are about money gained. For example, sales tax when you pay $100 isn't negative $8, it's $8. When gifting large amounts of money, the IRS gets more money on top (so, if you're super rich, don't gift ALL off your money, and leave some aside for tax season).
    - delecti 4y ago
      Gifts larger than 14k essentially count against your eventual estate tax exclusion. If you give away $12.06 million on the day before you die (which would be tax-free), then the entirety of your estate is taxed at 40% (both 2022 numbers). If you die without having made any gifts exceeding $14k, then the first $12.06 million of your estate is not taxed at all, and the remainder is taxed at 40%
      - toomuchtodo 4y ago
        Not investing or financial advice. If your estate will incur said tax, be giving up to your annual exclusion till death.
        bcrosby95 4y ago
        The exclusion amount is also per recipient.
        gopher_space 4y ago
        It's sort of how you handle assisted living costs. Everything's cheaper if you've distributed your assets beforehand.
        mrguyorama 4y ago
        It's also why means-testing an end of life program that only looks back X number of years is inevitably not actually testing means. Every rich person has a guy who will tell them how to avoid it legally. Every poor person never had any money in the first place. It only ever hits middle class and upper-low class people who saved money for some of their life and were never told that they had to disburse their assets at X-1 years before they planned to need care and get hit with a huge penalty to their assistance when they inevitably have to move some of their cash around to pay for some of their expensive care. If you don't want rich people getting public funds for things, you have to be able to look beyond their money games, which is hard, expensive, often purposely sandbagged, and not usually successful. So just tax them their whole life instead, and let them get back some of what they put in with every other person.
- Avicebron 4y ago
  It says so in the article, but here's some corroboration https://www.schwab.com/learn/story/estate-tax-and-lifetime-gifting https://www.schwab.com/learn/story/estate-tax-and-lifetime-g... EDIT: read a little further, guess the 11-12 million exemption only lasts until 2025, so if you can use, do it fast.
- pksebben 4y ago
  [flagged]
  - dsfyu404ed 4y ago
    Careful now. "Intellectuals" don't tend to do very well when things go that way. A heck of a lot of them will wind up losing their heads along with the elite. Techies, journalists, and other well-ish off white collar cogs in the machine would do well to think a little more about what people outside their bubble think about their profession's effect on society.
    - omginternets 4y ago
      This. Y'all need to read more history.
      - notch898a 4y ago
        The interesting history is people will behead even themselves to get at the elite. See everyone in Zim / Rhodesia driving out the farmers that they surely knew they needed to eat, followed by utter destruction of their foodstocks and hyperinflation.
    - pclmulqdq 4y ago
      It's OK, the TCJA was from the party they oppose, so they don't mind you bad-mouthing that law. You had better not question the ACA or the "inflation reduction act."
      - pksebben 4y ago
        Slow your roll. You have no idea who I am or what I stand for - and I'd bet we're more aligned than you think. I'm of the opinion that both parties have been captured by criminals, so even if you fall on partisan lines, we agree on at least half. The ACA was a distraction tactic so the banks could rob us blind and the inflation reduction act isn't a lot better - so great, the top 1% are gonna pay 0.2% more in taxes. Whee. The solution isn't to back the lesser evil, it's to stop backing evils altogether.
- NotYourLawyer 4y ago
  The gift tax thing seems like a distraction. He would have needed to file a gift tax return for giving $10 million, but no taxes would be due. But he could just as easily have given $100 million, filed the return, and paid a large gift tax—he had plenty of cash floating around back then. I guess what I’m saying is, it wasn’t a way to hide the gift, because it still triggered the need for a gift tax return filing.
  - erosenbe0 4y ago
    Yeah that's how I read it. He gave [possibly ill-gotten] money to his parents. If tax was involved, then the treasury might need to give that fraction back to the bankruptcy trustee. If not, great, then it's just the family that needs to disclose to the trustee.
- detourdog 4y ago
  if the gift isn’t cash Alameda can determine the value of the gift mor or less.
HopenHeyHi 4y ago
Ah, The Floor Is Lava defense.
- deleted 4y ago
  [deleted]
cik2e 4y ago
>> Atleast SBF took the extra step of first funneling money to Alameda and then directing Alameda to send it back to him and then send it to his dad as a tax free gift. I am pretty sure it's the source of the money that matters more (legal vs. illegal) than whether the accounting tricks are legally sound. What you're saying sounds like "at least he wasn't a complete numb-nuts", but that's not much of an "at least" in this scenario. I am pretty sure the courts will be looking for an "at least he wasn't stealing from his customers". At least, that's the sane hope.
- koolba 4y ago
  Also if the father is “in on it”, then this would also lead to an additional conspiracy charge that adds him to the cabal.
jasondigitized 4y ago
I’m sure Stanford considers this ethical behavior by his father.
macspoofing 4y ago
>That atleast makes it harder for FTX to claw back that money. The 'Madoff Recovery Initiative' was incredibly aggressive in going after all of Madoff's family and acquaintances. SBF's family and acquaintances are going to be fighting lawsuits for years and will lose millions.
- deleted 4y ago
  [deleted]
- yootyootr 4y ago
  >and will lose millions. millions they arguably shouldn't have had in the first place, since they were proceeds of crime.
jonathankoren 4y ago
Stealing money then gifting to yourself via a trusted straw man? Now that's effective altruism!
bee_rider 4y ago
“I’ll give my ill gotten gains to someone who technically wasn’t involved (until they accepted my money)” couldn’t possibly be a new trick. (Hypothetically that is, if SBF actually did a crime; I’m not following the case).
olalonde 4y ago
> One interesting thing a lawyer pointed out to me is that a lawyer has a duty to ensure that the money used to pay them wasn't from the proceeds of a crime. If that's true, it seems a bit ridiculous. SBF is pleading not guilty. Are his lawyers supposed to do their own little investigation to figure out whether their client is actually guilty?
- watwut 4y ago
  > Are his lawyers supposed to do their own little investigation to figure out whether their client is actually guilty? Actually yes, they are supposed to do that. Not because of money, but as they are preparing the defense.
  - olalonde 4y ago
    That's besides the point though. Consider the legal principle of "innocent until proven guilty" - a fundamental pillar of the justice system. It is not the job of a lawyer to determine whether a defendant is guilty or innocent; they are only responsible for presenting evidence and arguments to support their client's case. Ultimately, it is the judge or jury who must decide whether to convict or acquit. The whole process is designed to determine guilt. Requiring a lawyer to know whether their client is guilty in advance amounts to asking them to predict the outcome of that process, to foresee the future. PS: I am not trying to defend SBF here and I hope that that any money linked to Alameda/FTX, including the money he sent to friends and family, is clawed back. But that's a separate issue.
    - twelve40 4y ago
      the issue might be not the lawyers getting into trouble necessarily but for those fees to be confiscated. Why would you as a lawyer sign up to do all this work when there is a chance your fees will evaporate?
      - olalonde 4y ago
        Indeed. If that's what OP meant, it makes a lot more sense.
from 4y ago
> One interesting thing a lawyer pointed out to me is that a lawyer has a duty to ensure that the money used to pay them wasn't from the proceeds of a crime. I don't think this is true in the US. Lawyers do not have any obligations under the Bank Secrecy Act or laws that would require this and there are other things like the text below that would make prosecuting a lawyer for this very difficult, https://www.law.cornell.edu/uscode/text/18/1957 https://www.law.cornell.edu/uscode/text/18/1957 > (1)the term “monetary transaction” means the deposit, withdrawal, transfer, or exchange, in or affecting interstate or foreign commerce, of funds or a monetary instrument (as defined in section 1956(c)(5) of this title) by, through, or to a financial institution (as defined in section 1956 of this title), including any transaction that would be a financial transaction under section 1956(c)(4)(B) of this title, but such term *does not include any transaction necessary to preserve a person’s right to representation as guaranteed by the sixth amendment to the Constitution;* https://www.justice.gov/jm/jm-9-105000-money-laundering https://www.justice.gov/jm/jm-9-105000-money-laundering > Because the Department firmly believes that attorneys representing clients in criminal matters must not be hampered in their ability to effectively and ethically represent their clients within the bounds of the law, the Department, as a matter of policy, will not prosecute attorneys under § 1957 based upon the receipt of property constituting bona fide fees for the legitimate representation in a criminal matter, except if (1) *there is proof beyond a reasonable doubt that the attorney had actual knowledge of the illegal origin of the specific property received (prosecution is not permitted if the only proof of knowledge is evidence of willful blindness);* and (2) such evidence does not consist of (a) confidential communications made by the client preliminary to and with regard to undertaking representation in the criminal matter; or (b) confidential communications made during the course of representation in the criminal matter; or (c) other information obtained by the attorney during the course of the representation and in furtherance of the obligation to effectively represent the client.
- chollida1 4y ago
  I appreciate your response and this is what I also countered with, though not as nicely cited:) this is a good response https://www.moneylaunderingnews.com/2018/09/use-of-tainted-assets-to-pay-attorney-fees-a-brief-primer-on-the-pitfalls/ https://www.moneylaunderingnews.com/2018/09/use-of-tainted-a... Turns out its not black and white as people expect - lawyers fees can be clawed back due to asset forfeiture. > Federal forfeiture laws, on the other hand, pose a different kind of risk for lawyers — one that the Safe Harbor Provision does not protect against. Forfeiture laws are premised, in part, on the notion that tainted assets belong to the government as of the date the underlying offense was committed - while its true that courts have decided that taking all of a persons money so they can't pay for their defense has been ruled illegal by the courts the amount of money that lawyers think the client has can be significantly reduced by the courts. So if SBF has say $20M now, the courts can claw back 75% of that leaving the client with far less to pay than the lawyers originally though. Or put another way, you are entitled to a defense, you are not entitled to have unlimited funds to pay for your defense. Also given that the money is coming from SBF' dad( a third party) and not SBF this seems to be relevant. > Moreover, the Fourth Circuit has held in a divided decision that the Safe Harbor Provision does not apply in instances whereupon an attorney “receives and deposits” tainted funds from a third-party payer.
pengaru 4y ago
> Atleast SBF took the extra step of first funneling money to Alameda and then directing Alameda to send it back to him and then send it to his dad as a tax free gift. Isn't this worse for him in the long run if he's found guilty though? Words like "structuring", "posturing", "evasion" come to mind...
- TacticalCoder 4y ago
  > Words like "structuring" As much as I want to see that scammer and his family rot in jail , as much as I find "structuring" totally unfair. If you set the limit to, say "$1 K / day" and then someone does "$1 K / day, everyday", it's not doing anything wrong. Instead of inventing the concept of "structuring", instead write the actual limits more clearly: "$1 K / day, $10 K / year max" (for example). Then it's clear that the limit is $1 K / day max and that you can only do it up to 10 times a year. For otherwise it's just one of the oh-so-many arbitrary rules invented so that even honest people may be, unknowingly, doing something illegal. Laws against structuring makes me think of this: "The more numerous the laws, the more corrupt the state". The state should make the law clear or go fuck itself.

blockwriter 4y ago

Aren't tax free gifts capped at $14,000.00 per year? Edit: Er, I guess it's $16,000.00 without needing to report it, and then anything above that can be offset against a $12 ish million lifetime exclusion. https://money.usnews.com/money/personal-finance/taxes/articles/gift-tax-tax-rules-to-know-if-you-give-or-receive-cash https://money.usnews.com/money/personal-finance/taxes/articl...

rsstack 4y ago
You need to report a gift over $14k but you don't owe until much higher limits. Same as how people who make very little money have to report income even if it's lower than the lowest tax bracket. Also, as a reminder, the gifter pays the tax and not the person who received the gift. If someone gifts you an illiquid asset, you aren't forced to go into debt to pay a tax. But the gifter has to figure things out on their end.
- cft 4y ago
  This is correct. The tax thresholds are of the order of 12mm
- ambicapter 4y ago
  What does the gifter pay tax on? -$14k?
  - rsstack 4y ago
    This isn't an income or gains tax. Not all taxes are about money gained. For example, sales tax when you pay $100 isn't negative $8, it's $8. When gifting large amounts of money, the IRS gets more money on top (so, if you're super rich, don't gift ALL off your money, and leave some aside for tax season).
  - delecti 4y ago
    Gifts larger than 14k essentially count against your eventual estate tax exclusion. If you give away $12.06 million on the day before you die (which would be tax-free), then the entirety of your estate is taxed at 40% (both 2022 numbers). If you die without having made any gifts exceeding $14k, then the first $12.06 million of your estate is not taxed at all, and the remainder is taxed at 40%
    - toomuchtodo 4y ago
      Not investing or financial advice. If your estate will incur said tax, be giving up to your annual exclusion till death.
      - bcrosby95 4y ago
        The exclusion amount is also per recipient.
      - gopher_space 4y ago
        It's sort of how you handle assisted living costs. Everything's cheaper if you've distributed your assets beforehand.
        mrguyorama 4y ago
        It's also why means-testing an end of life program that only looks back X number of years is inevitably not actually testing means. Every rich person has a guy who will tell them how to avoid it legally. Every poor person never had any money in the first place. It only ever hits middle class and upper-low class people who saved money for some of their life and were never told that they had to disburse their assets at X-1 years before they planned to need care and get hit with a huge penalty to their assistance when they inevitably have to move some of their cash around to pay for some of their expensive care. If you don't want rich people getting public funds for things, you have to be able to look beyond their money games, which is hard, expensive, often purposely sandbagged, and not usually successful. So just tax them their whole life instead, and let them get back some of what they put in with every other person.
Avicebron 4y ago
It says so in the article, but here's some corroboration https://www.schwab.com/learn/story/estate-tax-and-lifetime-gifting https://www.schwab.com/learn/story/estate-tax-and-lifetime-g... EDIT: read a little further, guess the 11-12 million exemption only lasts until 2025, so if you can use, do it fast.
pksebben 4y ago
[flagged]
- dsfyu404ed 4y ago
  Careful now. "Intellectuals" don't tend to do very well when things go that way. A heck of a lot of them will wind up losing their heads along with the elite. Techies, journalists, and other well-ish off white collar cogs in the machine would do well to think a little more about what people outside their bubble think about their profession's effect on society.
  - omginternets 4y ago
    This. Y'all need to read more history.
    - notch898a 4y ago
      The interesting history is people will behead even themselves to get at the elite. See everyone in Zim / Rhodesia driving out the farmers that they surely knew they needed to eat, followed by utter destruction of their foodstocks and hyperinflation.
  - pclmulqdq 4y ago
    It's OK, the TCJA was from the party they oppose, so they don't mind you bad-mouthing that law. You had better not question the ACA or the "inflation reduction act."
    - pksebben 4y ago
      Slow your roll. You have no idea who I am or what I stand for - and I'd bet we're more aligned than you think. I'm of the opinion that both parties have been captured by criminals, so even if you fall on partisan lines, we agree on at least half. The ACA was a distraction tactic so the banks could rob us blind and the inflation reduction act isn't a lot better - so great, the top 1% are gonna pay 0.2% more in taxes. Whee. The solution isn't to back the lesser evil, it's to stop backing evils altogether.
NotYourLawyer 4y ago
The gift tax thing seems like a distraction. He would have needed to file a gift tax return for giving $10 million, but no taxes would be due. But he could just as easily have given $100 million, filed the return, and paid a large gift tax—he had plenty of cash floating around back then. I guess what I’m saying is, it wasn’t a way to hide the gift, because it still triggered the need for a gift tax return filing.
- erosenbe0 4y ago
  Yeah that's how I read it. He gave [possibly ill-gotten] money to his parents. If tax was involved, then the treasury might need to give that fraction back to the bankruptcy trustee. If not, great, then it's just the family that needs to disclose to the trustee.
detourdog 4y ago
if the gift isn’t cash Alameda can determine the value of the gift mor or less.

HopenHeyHi 4y ago

Ah, The Floor Is Lava defense.

deleted 4y ago
[deleted]

cik2e 4y ago

>> Atleast SBF took the extra step of first funneling money to Alameda and then directing Alameda to send it back to him and then send it to his dad as a tax free gift. I am pretty sure it's the source of the money that matters more (legal vs. illegal) than whether the accounting tricks are legally sound. What you're saying sounds like "at least he wasn't a complete numb-nuts", but that's not much of an "at least" in this scenario. I am pretty sure the courts will be looking for an "at least he wasn't stealing from his customers". At least, that's the sane hope.

koolba 4y ago
Also if the father is “in on it”, then this would also lead to an additional conspiracy charge that adds him to the cabal.

jasondigitized 4y ago

I’m sure Stanford considers this ethical behavior by his father.

macspoofing 4y ago

>That atleast makes it harder for FTX to claw back that money. The 'Madoff Recovery Initiative' was incredibly aggressive in going after all of Madoff's family and acquaintances. SBF's family and acquaintances are going to be fighting lawsuits for years and will lose millions.

deleted 4y ago
[deleted]
yootyootr 4y ago
>and will lose millions. millions they arguably shouldn't have had in the first place, since they were proceeds of crime.

jonathankoren 4y ago

Stealing money then gifting to yourself via a trusted straw man? Now that's effective altruism!

bee_rider 4y ago

“I’ll give my ill gotten gains to someone who technically wasn’t involved (until they accepted my money)” couldn’t possibly be a new trick. (Hypothetically that is, if SBF actually did a crime; I’m not following the case).

olalonde 4y ago

> One interesting thing a lawyer pointed out to me is that a lawyer has a duty to ensure that the money used to pay them wasn't from the proceeds of a crime. If that's true, it seems a bit ridiculous. SBF is pleading not guilty. Are his lawyers supposed to do their own little investigation to figure out whether their client is actually guilty?

watwut 4y ago
> Are his lawyers supposed to do their own little investigation to figure out whether their client is actually guilty? Actually yes, they are supposed to do that. Not because of money, but as they are preparing the defense.
- olalonde 4y ago
  That's besides the point though. Consider the legal principle of "innocent until proven guilty" - a fundamental pillar of the justice system. It is not the job of a lawyer to determine whether a defendant is guilty or innocent; they are only responsible for presenting evidence and arguments to support their client's case. Ultimately, it is the judge or jury who must decide whether to convict or acquit. The whole process is designed to determine guilt. Requiring a lawyer to know whether their client is guilty in advance amounts to asking them to predict the outcome of that process, to foresee the future. PS: I am not trying to defend SBF here and I hope that that any money linked to Alameda/FTX, including the money he sent to friends and family, is clawed back. But that's a separate issue.
  - twelve40 4y ago
    the issue might be not the lawyers getting into trouble necessarily but for those fees to be confiscated. Why would you as a lawyer sign up to do all this work when there is a chance your fees will evaporate?
    - olalonde 4y ago
      Indeed. If that's what OP meant, it makes a lot more sense.

from 4y ago

> One interesting thing a lawyer pointed out to me is that a lawyer has a duty to ensure that the money used to pay them wasn't from the proceeds of a crime. I don't think this is true in the US. Lawyers do not have any obligations under the Bank Secrecy Act or laws that would require this and there are other things like the text below that would make prosecuting a lawyer for this very difficult, https://www.law.cornell.edu/uscode/text/18/1957 https://www.law.cornell.edu/uscode/text/18/1957 > (1)the term “monetary transaction” means the deposit, withdrawal, transfer, or exchange, in or affecting interstate or foreign commerce, of funds or a monetary instrument (as defined in section 1956(c)(5) of this title) by, through, or to a financial institution (as defined in section 1956 of this title), including any transaction that would be a financial transaction under section 1956(c)(4)(B) of this title, but such term *does not include any transaction necessary to preserve a person’s right to representation as guaranteed by the sixth amendment to the Constitution;* https://www.justice.gov/jm/jm-9-105000-money-laundering https://www.justice.gov/jm/jm-9-105000-money-laundering > Because the Department firmly believes that attorneys representing clients in criminal matters must not be hampered in their ability to effectively and ethically represent their clients within the bounds of the law, the Department, as a matter of policy, will not prosecute attorneys under § 1957 based upon the receipt of property constituting bona fide fees for the legitimate representation in a criminal matter, except if (1) *there is proof beyond a reasonable doubt that the attorney had actual knowledge of the illegal origin of the specific property received (prosecution is not permitted if the only proof of knowledge is evidence of willful blindness);* and (2) such evidence does not consist of (a) confidential communications made by the client preliminary to and with regard to undertaking representation in the criminal matter; or (b) confidential communications made during the course of representation in the criminal matter; or (c) other information obtained by the attorney during the course of the representation and in furtherance of the obligation to effectively represent the client.

chollida1 4y ago
I appreciate your response and this is what I also countered with, though not as nicely cited:) this is a good response https://www.moneylaunderingnews.com/2018/09/use-of-tainted-assets-to-pay-attorney-fees-a-brief-primer-on-the-pitfalls/ https://www.moneylaunderingnews.com/2018/09/use-of-tainted-a... Turns out its not black and white as people expect - lawyers fees can be clawed back due to asset forfeiture. > Federal forfeiture laws, on the other hand, pose a different kind of risk for lawyers — one that the Safe Harbor Provision does not protect against. Forfeiture laws are premised, in part, on the notion that tainted assets belong to the government as of the date the underlying offense was committed - while its true that courts have decided that taking all of a persons money so they can't pay for their defense has been ruled illegal by the courts the amount of money that lawyers think the client has can be significantly reduced by the courts. So if SBF has say $20M now, the courts can claw back 75% of that leaving the client with far less to pay than the lawyers originally though. Or put another way, you are entitled to a defense, you are not entitled to have unlimited funds to pay for your defense. Also given that the money is coming from SBF' dad( a third party) and not SBF this seems to be relevant. > Moreover, the Fourth Circuit has held in a divided decision that the Safe Harbor Provision does not apply in instances whereupon an attorney “receives and deposits” tainted funds from a third-party payer.

pengaru 4y ago

> Atleast SBF took the extra step of first funneling money to Alameda and then directing Alameda to send it back to him and then send it to his dad as a tax free gift. Isn't this worse for him in the long run if he's found guilty though? Words like "structuring", "posturing", "evasion" come to mind...

TacticalCoder 4y ago
> Words like "structuring" As much as I want to see that scammer and his family rot in jail , as much as I find "structuring" totally unfair. If you set the limit to, say "$1 K / day" and then someone does "$1 K / day, everyday", it's not doing anything wrong. Instead of inventing the concept of "structuring", instead write the actual limits more clearly: "$1 K / day, $10 K / year max" (for example). Then it's clear that the limit is $1 K / day max and that you can only do it up to 10 times a year. For otherwise it's just one of the oh-so-many arbitrary rules invented so that even honest people may be, unknowingly, doing something illegal. Laws against structuring makes me think of this: "The more numerous the laws, the more corrupt the state". The state should make the law clear or go fuck itself.