In a court filing in early September, Ellison’s attorney asked the judge to refrain from sending her to prison, citing the extent of her cooperation with the FTX investigation, the responsibility she has taken for her wrongdoing and her apparent remorse.
The US Department of Justice later sent a letter of support. The Justice Department did not ask the judge to issue a specific sentence — that is the convention in the Southern District of New York, former prosecutors say — but noted Ellison’s “extraordinary cooperation.”
“There is no formula, but [judges] they often say they’re trying to look at the whole person,” says Joshua Naftalis, a former U.S. attorney and partner at the law firm Pallas Partners. The presentence filing is therefore intended to place Ellison’s actions in the context of her complicated relationship with Bankman-Fried and to use any potentially mitigating elements of her character and background. “What you’re trying to convey to the judge is that the convicted person is more than the crime they committed,” Naftalis says.
The effectiveness of Ellison’s testimony against Bankman-Fried also would have gone a long way in persuading the judge to show leniency, said Paul Tuchman, a former U.S. attorney and partner at the law firm Wiggin and Dana.
Testifying at the Bankman-Fried criminal trial in October 2023, Ellison described her ex-lover as the driving force behind the FTX scam. On the stand, she painted Bankman-Fried as strong and calculating and described to the jury his various scams, his careful maintenance of his public image and his twisted relationship with risk. Bankman-Fried “was perfectly comfortable with taking on risk as long as she thought it was a positive expected value,” Ellison said, under investigation by prosecutors. “He’s talking about being willing to do big flips, like a flip where if you come up tails you might lose $10 million, but if you come up heads you win a little over $10 million.”
Ellison wept on the stand as she recalled her “state of terror,” wracked with guilt over the stolen funds and the perverse relief she felt when FTX began to crumble. “It’s something that’s been on my mind every day, worrying about what’s going to happen when the truth finally comes out,” Ellison said. “I was relieved not to have to lie anymore.”
