Caroline Ellison, the former CEO of Alameda Research, has been sentenced to two years in prison and ordered to forfeit $11 billion after pleading guilty to seven felony counts of conspiracy and fraud. Despite federal sentencing guidelines calling for 110 years behind bars, Ellison received a lighter sentence due to her cooperation with prosecutors and testimony in the trial of FTX founder Sam Bankman-Fried.
During the sentencing hearing, Judge Lewis Kaplan praised Ellison for her complete cooperation with prosecutors, describing her as “vulnerable” and “exploited.” Federal prosecutors also recommended leniency for Ellison, noting that her testimony was critical in indicting and convicting Bankman-Fried and understanding the fraud schemes.
Ellison, who was involved in defrauding lenders and customers out of billions of dollars while at Alameda Research, admitted to preparing fraudulent financial spreadsheets for the company’s lenders. Despite occasionally raising concerns, Ellison was described as an accomplice to Bankman-Fried, who was sentenced to 25 years in prison earlier this year.
Throughout the trial, Ellison faced intense public scrutiny after Bankman-Fried leaked her diary to the New York Times. Despite this, she apologized during the sentencing hearing for not being brave and expressed relief at being honest with prosecutors and investigators following FTX’s collapse.
Prosecutors noted that Ellison accepted full responsibility for her actions and did not minimize or shift blame. They also highlighted her efforts to convince Bankman-Fried not to misuse FTX customer deposits for venture investments, although she ultimately participated in wrongdoing and deceit.
Overall, Ellison’s cooperation and testimony were deemed instrumental in the prosecution of Bankman-Fried and shedding light on the fraud schemes. Despite her involvement in the criminal activities at Alameda Research, her sentencing reflects the value of cooperation in bringing financial criminals to justice.
