The ex-girlfriend of FTX founder Sam Bankman-Fried told a jury today that he donated $10 million to Joe Biden’s campaign to gain “influence.”
Assistant U.S. Attorney Danielle Sasson asked Caroline Ellison what Bankman-Fried said about spending money on politics.
Ellison said: ‘He thought it was very effective, you could get very high returns in terms of influence by spending relatively small amounts of money.
“He donated $10 million to (Joe) Biden and it was a relatively small amount of money. He felt it was something that brought him influence and recognition.’
Sassoon asked Ellison to describe the “nature of your personal relationship” with Bankman-Fried.
She said: ‘I would say the whole time we were dating he was also my boss at work, which created some awkward situations.
“My general feeling (was) I wanted more from our relationship and often felt he was distant or not paying attention to me.”
Asked why she ended up breaking up with Bankman-Fried, Ellison said: ‘Because of those things I mentioned. I felt he didn’t spend much time on the relationship’.
Caroline Ellison took the stand in ex-boyfriend Sam Bankman-Fried’s cheating trial on Tuesday
Ellison told the jury that Bankman-Fried ‘told me’ to commit Fraud, and all the crimes ‘were committed with Sam’
Ellison told a jury today that Bankman-Fried donated $10 million to Joe Biden’s campaign to gain ‘influence’
Ellison testified that Bankman-Fried ‘directed’ me to commit fraud.
She said that Bankman-Fried told her to take $14 billion from the failed crypto exchange’s customers to repay loans from its sister company, which she ran.
Ellison testified as the prosecution’s star witness, saying that Bankman-Fried set up the loopholes in the computer system that allowed the fraud to take place.
Asked if she committed the crimes alone, she told the New York court: ‘No, they were committed with Sam.’
Ellison, a 29-year-old daughter of two MIT professors who blogged about her love of Harry Potter, has already pleaded guilty to fraud charges and testified as part of her plea deal.
The former couple did not make eye contact and Bankman-Fried stared straight ahead as she sat in the witness stand
Her testimony is central to the case brought by prosecutors who allege that FTX was a “house of cards” worth $32 billion at its peak.
The crypto exchange collapsed last November after media reports raised questions about its finances.
Ellison walked into court wearing a dark pink dress and a gray jacket and appeared calm and confident.
There was no eye contact between her and Bankman-Fried and he stared straight ahead as she sat in the witness box.
In the overflow room, a dozen of Ellison’s friends rushed to the TV showing the live stream as she came in a show of support.
She told the court that she ran Alameda Research, FTX’s sister company that owned Bankman-Fried, and shared an office with FTX.
Prosecutors alleged that it operated like a slush fund that used billions of FTX clients’ money to pay for lavish expenses, real estate purchases and to make political donations.
Sasson asked Ellison: ‘How do you know Sam Bankman-Fried?’
Ellison said: We met while I was an intern at Jane St (financial trading company) and worked together. Later we worked together at Alameda and dated for a few years’.
Sassoon: ‘Did you commit crimes while working at Alameda?’
Ellison said, ‘Yes, we did.’
Sasson asked what she meant by ‘we’ to which Ellison replied: ‘Sam and I and others.’
Sassoon asked: ‘What kind of crimes did you commit with Sam?’
In response, Ellison told the jury: ‘Fraud, conspiracy to commit fraud and money laundering.’
Caroline Ellison and Bankman-Fried’s sexual relationship continued for several years while they were both at the helm of the now-disgraced crypto firm FTX
Ellison walked into court wearing a dark pink dress and a gray jacket and appeared calm and confident
Asked who she defrauded, Ellison said: ‘The customers of FTX, the investors in FTX and the lenders.’
Sassoon said: ‘Just to be clear, did you commit these crimes alone?’
Ellison said, “No, they were committed with Sam.”
At that point, Ellison was asked if she had seen Bankman-Fried in court.
She got up and spent a few minutes scanning the courtroom, apparently struggling to find him.
Bankman-Fried recently lost a lot of weight, wore much smarter clothes than his signature shorts and t-shirt, and cut the sides of his hair short.
Finally, Ellison saw him and said he was ‘wearing a suit over there’ and motioned to Bankman-Fried.
Sassoon asked: ‘You defrauded FTX customers with the defendant. What was his involvement in the crimes?’
Ellison said: ‘He was originally the CEO of Alameda and then the owner of Alameda and he told me to commit these crimes’.
Sassoon asked Ellison to explain “at a general level” what she did to commit crimes.
She said: ‘Alameda took several billion dollars of money from FTX customers and used it for investments and to repay debts we had’.
Ellison said that Alameda’s special privileges with FTX meant he had an “unlimited line of credit with FTX.”
Sassoon asked “what role” Bankman-Fried had in taking that money and sending it to Alameda.
Ellison said he was the “one who set up the systems” that allowed this to happen.
She said: ‘He was the one who told us to take the clients’ money to repay the loans’.
Ellison said Alameda took “about $14 billion” from FTX clients before its collapse.
Bankman-Fried dated Ellison and appointed her head of FTX’s sister company Alameda Research
Bankman-Fried faces up to 115 years in prison if convicted on a slew of fraud charges
Ellison told the jury she grew up near Boston and studied mathematics at Stanford University before working as an intern at the stock bank at Jane Street, a trading company.
She met Bankman-Fried there while he was working as a merchant.
He left and in the spring of 2018 she met him for coffee when he told her that he had started his own company, Alameda, and offered her a job as a trader.
But soon after joining, she found Alameda to be in “much worse shape than I realized.”
She said: ‘Just before I started working there, it suffered huge losses. Lenders pulled out a lot of money and indeed more than half the company went out of business.
Sassoon asked if Bankman-Fried shared these “rough circumstances” with her before she joined.
She said no. Ellison told the jury: ‘I asked why he didn’t share more of this information and he apologized and said he didn’t know how to tell me.’
Ellison said they were ‘not really’ open about their relationship and kept it a ‘secret’ when they first started dating.
The second time, Bankman-Fried ‘agreed to make it public’ and they lived together but ‘didn’t talk about it much’
Ellison said she became co-CEO of Alameda in 2021 — when she and Bankman-Fried were “on a break” — and CEO in 2022.
She told the jury that her salary did not change when she became co-CEO and that she remained at $200,000 a year.
She got bonuses ranging from $100,000 a year to $20 million, her biggest one, in 2021.
She asked Bankman-Fried for an equity stake in Alameda, but he brushed her off, saying it was “too complicated and doesn’t make sense.”
She was given a 0.5 percent stake in FTX, which was a fraction of that held by Bankman-Fried and his other top lieutenants.
Ellison admitted she was ‘not particularly’ suited to be in charge of Alameda.
She said: ‘I felt it was a big job and I wasn’t very experienced. Sam said there wasn’t a better person for the job.’
She told the jury she became concerned when she discovered Alameda had lent billions of dollars to Bankman-Fried, FTX co-founder Gary Wang and Nishad Singh, its chief engineer.
Ellison told the jury she became concerned when she discovered Alameda had lent billions of dollars to Bankman-Fried, FTX co-founder Gary Wang and Nishad Singh, its chief engineer.
According to Ellison, those loans totaled $5 billion by May 2022 and were in investments that were unlikely to be repaid.
By comparison, she only got one loan of $3.5 million, which she used to finance an investment in a gaming company.
About $35 million of the $5 billion went to Ryan Saleme, a former FTX employee who used it to donate to Republican politicians, Ellison told the court.
Ellison said Bankman-Fried told her he was “risk neutral” and open to taking risks if there was a good potential payoff.
She said: ‘He would be happy to flip a coin if it came up tails if the world was destroyed, if it came up heads the world would be twice as good.’
Ellison’s testimony came after FTX co-founder Gary Wang testified against Bankman-Fried as part of his own plea deal. The company’s head of engineering, Nishad Singh, is also expected to testify later in the trial.
Bankman-Fried, 31, pleaded not guilty to 13 charges between 2019 and 2011, including fraud, money laundering and violations of campaign finance laws that could have sent him to prison for 115 years.