FTX Claims Bankman-Fried’s Parents Played a Part in the Scheme
- FTX claimed Joe and Barbara helped cover up some of Bankman-Fried’s fraudulent schemes.
- Joe Bankman allegedly helped set up huge loans for some top FTX executives.
- Bankman-Fried is set to be tried for criminal charges in early October.
Joe Bankman and Barbara Fried, the parents of the founder and former CEO of FTX, Sam Bankman-Fried (SBF), are facing a lawsuit over allegations of misappropriation of millions of dollars.
The lawsuit, filed by the new FTX management, claims the longtime Stanford professors illegally received millions of dollars from their disgraced son and FTX.
The court filing stated that Joe and Barbara “exploited their access and influence within the FTX enterprise to enrich themselves, directly and indirectly.” This startling claim has raised questions about the financial dealings within the family and the potential consequences for the couple.
According to the filing:
Bankman played a key role in perpetuating this culture of misrepresentations and gross mismanagement and helped cover up allegations that would have exposed the fraud committed by the FTX Insiders. And together, Bankman and Fried siphoned millions of dollars out of the FTX Group for their own personal benefit and their chosen pet causes.
Interestingly, the lawsuit seeks to recover the millions of dollars the couple received from their son. In addition, FTX accused Joe and Barbara of receiving a $10 million cash gift from their son and a $16.4 million apartment in the Bahamas that was purchased by the exchange.
Furthermore, the lawsuit alleges that Barbra Fried supplied her son and another FTX executive with tips on how to avoid political disclosure laws. Also, FTX claims Joe helped cover up claims made against the exchange.
The lawsuit said Bankman-Fried’s parents “either knew—or ignored—bright red flags revealing—that their son, Bankman-Fried, and other FTX Insiders were orchestrating a vast fraudulent scheme.”
Joe was reportedly listed as a member of the company’s executive team and assisted in setting up loans totaling hundreds of millions of dollars for the company’s top executives. Some of the documents presented in the lawsuit said Joe complained that he was only getting paid $200,000 annually rather than the $1 million he had anticipated.
The new FTX management also dug into the personal dealings of Bankman-Fried’s parents, accusing them of supporting political donations to the detriment of the exchange. These donations, according to the suit, included grants given to Stanford University and were mostly given to enhance their social and professional standing.
Joe and Barbara’s attorneys said FTX’s allegations were “completely false” and “a dangerous attempt to intimidate Joe and Barbara and undermine the jury process” ahead of their son’s trial next month.
US prosecutors have accused Sam Bankman-Fried and other FTX executives of stealing billions of dollars from customer funds. In addition, they believe the collapse of FTX is one of the biggest fraud cases in American history.
As mentioned earlier, SBF is set to face trial for different criminal charges, including fraud and money laundering. Interestingly, SBF has pleaded not guilty to all charges.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
