Sam Bankman-Fried’s reported ex-girlfriend was likely one of the first people to turn against him and help prosecutors build their fast-moving fraud case in the epic collapse of his $8 billion+ cryptocurrency exchange FTX, a said former US government attorney on Wednesday ,
Caroline Ellison, 28, is a key figure in the case as she was once the CEO of hedge fund Alameda Research – which authorities say has received billions of dollars siphoned off Bankman-Fried, 30, from FTX.
“She would have one of the greatest incentives to work with her as it was likely that Bankman-Fried would try to finger her in his attempt to apologize,” Howard Fischer, a former Securities and Exchange Commission attorney, told The Post .
Fischer said “the speed of the indictment and the breadth of the charges” against Bankman-Fried mean that “someone of relatively high rank is working with federal authorities to seek leniency for their own potential wrongdoing.”
“It is possible that Bankman-Fried’s publicity spree, in which he repeatedly denied either knowledge of – or responsibility for – mistreatment or theft of client assets spurred senior officials to fear that he would specifically blame them,” he said.
“Often the first person at the table gets the most lenient treatment, so it’s wise to turn around before others have a chance.”
Moira Penza, a former federal prosecutor from New York’s Eastern District, added that someone like Ellison would have a clear incentive to work together.
“For someone like Ellison, who was part of SBF’s inner circle and has already become publicly involved, there is a strong incentive to work together early on,” Penza said in an email to The Post.
“It’s not unknown [the Southern District of New York] for people who cooperate and otherwise face a decade or more in prison, instead being sentenced to served time,” she added.
Earlier this month, an unconfirmed sighting of Ellison at a coffee shop in Lower Manhattan sparked speculation she was in the Big Apple to meet with law enforcement officials.
Manhattan US Attorney Damian Williams announced Tuesday that some of Bankman-Fried’s alleged accomplices had attacked him, saying, “Anyone implicated in wrongdoing at FTX or Alameda Research who has not yet come forward, I urge you to come to us before we come to you.”
But when asked who was cooperating with the ongoing investigation, Williams said: “I’m not at liberty to say who came in.”
Bankman-Fried was arrested Monday in the Bahamas on an eight-count indictment alleging he defrauded FTX customers and used Alameda funds to illegally make campaign contributions to Democratic and Republican politicians.
The scruffy former billionaire has vowed to fight extradition and is being held in a rat-and-maggot-infested prison that a former warden has described as “inhumane.”
Former federal prosecutor Duncan Levin told The Post the speed with which prosecutors secured the indictment against Bankman-Fried on Friday – less than a month after FTX’s bankruptcy – suggested they were able to build a case from financial records.
“Typically, economic cases of this magnitude are investigated for months, if not years, and then staff are deployed to build a case from the ground up,” he said. “It is unlikely that the government has even had time to produce a testimony. The government is certainly basing its case on a deluge of banking and other financial records.”
Bankman-Fried’s defense attorney, Mark Cohen, said his client was “reviewing the charges with his legal team and considering all of his legal options.”
Ellison’s attorney, Stephanie Avakian, did not immediately respond to a request for comment.