So there I was idly scrolling through....Just kidding. It was fully intentional.
Following on the teaser intro to last night's "Metropolitan Museum of Art secretly sold $70M Van Gogh looted by Nazis in attempted cover-up: lawsuit".
Much of what follows in the Allegations against Ma and Pa is in regards to the fraud against FTX but there are a couple little nuggets that reference a whole 'nother dimension of wrongdoing, the use of "charities" to do political work which is strictly forbidden by the IRS.
From the complaint Filed 09/18/23
FTX TRADING LTD., et al.,1
Debtors.
______________________________________
ALAMEDA RESEARCH LLC, ALAMEDA
RESEARCH LTD., FTX TRADING LTD.,
WEST REALM SHIRES, INC., and WEST
REALM SHIRES SERVICES INC. (d/b/a
FTX.US),
Plaintiffs,
v.
ALLAN JOSEPH BANKMAN and
BARBARA FRIED,
Defendants
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9. Defendant Fried: Bankman’s domestic partner, Fried, was likewise a Stanford Law School professor who willingly enmeshed herself in the FTX Insiders’ world. Describing herself as her son Bankman-Fried’s “partner in crime of the noncriminal sort,” Fried served as the single most influential advisor regarding Bankman-Fried’s and the FTX Group’s political contributions, and repeatedly “dunned,” or called upon, Bankman-Fried and Singh to contribute millions of dollars directly to Mind the Gap, Inc. (“MTG”), a political action committee that she co-founded and for which she served as President and Chairwoman, or the organizations MTG supported.
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E. Fried Encouraged Certain FTX Insiders to Make Unlawful Political
Contributions to Her Own Organization and Others.107. As Bankman-Fried’s primary political advisor, Fried harbored concerns that public disclosure of certain of Bankman-Fried’s and the FTX Group’s political donations would cast a negative light. In particular, she advised against full disclosure of donations to her own organization, MTG, which would, “create the impression that funding MTG is a family affair[.]” Fried’s constant consideration of optics and how it would affect her and her son’s companies, and MTG’s strategy of “stealth” and maintaining a “cone of silence,” prompted Fried to pressure certain FTX Insiders to unlawfully avoid (if not violate) federal campaign finance law.
108. Fried focused heavily on masking Bankman-Fried’s identity as a political donor. She regularly raised this issue in email communications with Bankman-Fried and advised him on avoidance of such disclosure. For example, in a December 2021 email, she advised Bankman-Fried and her other son as follows: “need to start thinking through the disclosure issue now to make sure we protect [Bankman-Fried] and FTX. Plays at the state level especially are going to provoke accusations of carpet-bagging.”
109. In an October 2020 email to the President of a political action committee regarding Bankman-Fried’s anticipated $5 million contribution, Fried similarly asked whether Bankman-Fried would “face any potential legal or optics exposure from donating through the [Alameda] LLC?” She further noted that “[t]his is as much a judgment call as a legal one. He’s willing to take on some risk, but wants to understand what it is.”
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110. As a result of her concern about public scrutiny, Fried on multiple occasions suggested, and even encouraged, Bankman-Fried and Singh to falsify disclosure records and misrepresent the source of a particular contribution.
111. One such instance occurred in April 2021, as reflected in an email from Fried to Bankman-Fried and Singh in which she discussed Bankman-Fried’s “$1 million pledge to [MTG’s] operating expenses.” Since this is going to our 527, and hence is disclosed, I’m assuming that Nishad would be the better person to have his name on it. We’d have a slight preference for that on our end, now that my connection to Sam is publicly known, because we don’t want to create the impression that funding MTG is a family affair, as opposed to a collective effort by many people (including some mystery guy Nishad Singh:)) If that works on your end, I’ll have [an MTG employee] send you instructions. (Emphasis added).
112. Bankman-Fried replied, “works for me on all fronts[.]” Singh replied, “[s]ounds good, I’m happy to pledge the $1m for MTG operating, agreed on optpics [sic]. Mind sending the wire instructions?” (Emphasis added).
113. In addition, Fried emailed Bankman-Fried on August 12, 2022:
Noah will only give in a non-disclosed form, and I would strongly urge you to do the same-- or substitute someone else’s name. (I’m skeptical how long that will help. One of these days soon, some reporter is going to think to look more closely at FEC reports, do a search for donations by company, and just reframe this as the FTX juggernaut rather than the SBF juggernaut, or even worse suggest you are using Nishad/Caroline as fronts.). Nondisclosed form would mean to the 501(c)(4).
(Emphasis added). Bankman-Fried responded: “Awesome! Yup happy to split the $15m with him wherever it’s best.” Fried replied, “[y]ou are a prince.”
114. Further, in an August 19, 2022 email to Bankman-Fried discussing funding gaps for political entities associated with a particular organization, Fried presented Bankman-Fried with disclosure “options:”
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I would counsel strongly against giving in a disclosed form under your own name, both for MTG’s sake and yours. (Of course the obvious and truthful answer to why you are giving the money-- to defeat state legislators who are committed to subverting the will of the voters— won’t get you very far with the press and won’t get you anywhere with Republicans.) You could get Nishad or Caroline to contribute to the PAC some of the total amount you are willing to give, but that has its own costs and risks.
(Emphases added).
In response, Bankman-Fried indicated that he “agreed that it doesn’t make sense for me to give disclosed” and that “it makes sense for me to give another $2m or so for it (in whichever way makes most sense etc.)[.]”
115. Singh served as a conduit through which FTX Group funds passed to recipients hand-selected by Fried and rubber-stamped by Bankman-Fried. Singh enthusiastically agreed to make political contributions, which were funded by FTX Group funds.
116. Within two years of the Petition Date, there were at least three off-exchange cash transfers from the FTX Group to Singh that funded a political contribution:a. On April 12, 2021, Alameda transferred $1 million from its account at Bank-5 into Singh’s Bank-4 bank account. On April 13, 2021, Singh transferred $1 million from his Bank-4 account to MTG, Fried’s own organization.
b. On July 15, 2022, Alameda Ltd. transferred $2 million from its account at Bank-5 into Singh’s Bank-4 bank account. That same day, Singh contributed $1 million from his Bank-4 account to Senate Majority PAC.
c. On July 18, 2022, Alameda Ltd. transferred $5 million from its account at Bank-5 into Singh’s Bank-4 account. The following day, Singh donated from his Bank-4 account $1.5 million to EMILY’s List, and in the following weeks, donated $750,000 to Women Vote! and $100,000 each to the House Legislative Campaign Fund and Maine Democratic State Committee. On August 22, 2022, Singh transferred $2 million to an organization that supported a ballot initiative in Michigan.
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117. Singh admitted to having conspired to commit campaign finance law violations, pleading guilty to conspiracy to defraud the United States and willfully violate the Federal Election Campaign Act, in violation of 18 U.S.C. § 371 and 52 U.S.C. §§ 30109, 30118, and 30122. These statutes, among other things, prohibit the making of a contribution in the name of another person or knowingly permitting his or her name to be used to effect such a contribution, and knowingly accepting a contribution made by one person in the name of another. During his plea allocution, Singh admitted that in 2022, he “agreed with others at FTX and Alameda to make political donations in [his] name that were funded in part by transfers from Alameda” and that, “although [he] agreed politically with many of the donations, [he] did not select the candidates and the political action committees who received the donations.” Singh further admitted that he “knew at that time that Alameda money had to be coming, effectively, from FTX customer funds.”
118. Fried was aware that the FTX Group had previously contributed to MTG’s pet projects and had reason to believe that it would continue to do so. For example, in an [REDACTED]
And in an October 2020 email discussing political contributions and “Sam’s LLC,” Fried noted, “I don’t know exactly what interconnected entity he sent the money from . . . but the business is real and revenue-generating. And a corporation.” In addition, in September 2021, a nonprofit organization formed under Section 527 of the Internal Revenue Code requested from MTG a “confirmation email direct from the true source of the funds” for a $22,000 contribution made by Bankman-Fried. Fried forwarded the request to Bankman-Fried asking, “[d]id the $22,000 come from you as an individual contributor or as a contribution from FTX.US?”....
....MUCH MORE, this is just the tip of the iceberg.
For some background on MTG (which by the way seems to be clean if secretive) see Vox, January 6, 2020:
There’s a reason you haven’t heard of Mind the Gap: Its “raison d’être is stealth.Edit: just remembered this one from January 27, 2023:
"Sam Bankman-Fried’s Mother and Brother Not Cooperating With Financial Probe, FTX Lawyers Say"
