Former cryptocurrency executive Nishad Singh, who once shared $35 million Bahamas penthouse FTX founder Sam Bankman-Fried was spared a prison sentence by a judge on Wednesday for his role in the theft of nearly $8 billion in client funds from the now-bankrupt exchange by his jailed former boss.
During a hearing in Manhattan federal court, U.S. District Judge Lewis Kaplan imposed no prison time, but ordered three years of supervised release. Kaplan credited Singh for cooperating with prosecutors and being candid about his actions, which the judge said “may have been the largest financial fraud in American history.”
Leo, who had pleaded guilty Testified as a prosecution witness at the trial last year, on six serious counts of fraud and conspiracy Bankman-Fried’s conviction on fraud and other chargesIn a plea bargain with prosecutors, Singh admitted his role in the fraud and that he acted as a “straw donor” to some of Bankman-Fried’s millions of dollars in political donations.
“I am overwhelmed with remorse for the harm I participated in and the harm I caused to many innocent people,” Singh told the judge during the hearing. “I’ve strayed too far from my values.”
Prosecutors had asked for leniency against Singh, 29, a former chief engineer at FTX, because of his cooperation. His defense lawyers had recommended that he not serve time in prison.
Bankman-Fried, 32, is serving a 25-year prison sentence imposed by Kaplan due to FTX’s November 2022 collapse.
kaplan last month Caroline Ellison sentencedBankman-Fried’s former girlfriend and an executive at FTX’s sister hedge fund Alameda Research was jailed for two years. The judge also appreciated his cooperation, but said such assistance was not a “get out of jail free card” given his role in such a serious case.
The judge told Singh that his involvement was “certainly, much more limited than that of Bankman-Fried and Ellison.”
Gary Wang, a third former FTX executive who cooperated with prosecutors, will be sentenced on November 20.
During the hearing, Singh said that he respected and supported Bankman-Fried even though he considered her deceitful and selfish.
“I still owe a huge debt to the society,” Singh said.
“You did the right thing,” Kaplan told Singh. “You promptly and truthfully – so far as I can see – completely exonerated yourself to the government of wrongdoing of which you knew and which they clearly did not know about. “
Prosecutor Nicholas Ross told the judge that Singh deserves credit for coming forward and implicating himself by describing conversations that were not otherwise documented.
“It would have been very easy for Mr. Singh to deny everything,” Ruiz said.
“He wanted to right the wrong, or at least he wanted to start trying and do the right thing,” Ruiz said.
‘A big crime’
Singh’s lawyer Andrew Goldstein told the judge that almost all of the billions of dollars of client funds were stolen before his client knew about the scheme.
“The overwhelming majority of the conduct that made this such a serious crime occurred before Nishad was involved,” Goldstein said, arguing that Alameda’s decision to steal funds from FTX customers to pay off its lenders was a result of the financial crisis. Bankman-Fried and Ellison were responsible. “That was his crime. This was not Nishad’s crime.”
Goldstein said other family members, including Singh’s brother, parents and fiancee, were present in court.
A 2017 graduate of the University of California, Berkeley, Singh lived in a waterfront penthouse in the Bahamas with Bankman-Fried and seven other employees of FTX and its sister firm Alameda Research, where the exchange was based.
Singh said he has about 6-7% equity stake in FTX. He said the surge in cryptocurrency prices during the Covid pandemic made him a billionaire on paper.
As of October 2021, Bankman-Fried was worth $26 billion, according to Forbes magazine, and she gained fame as a prolific donor to philanthropic causes and Democratic politicians.
Singh testified during the trial that he became suicidal The FTX revelations came amid massive customer withdrawals. He returned to the United States shortly before the exchange declared bankruptcy on November 12, 2022, and had his first meeting with federal prosecutors later that month.
Singh testified that during an hour-long conversation on the balcony of her penthouse in September 2022, he talked to Bankman-Fried about the severe shortage of client funds. Singh said Bankman-Fried assured him that he would raise more money and cut costs.
Bankman-Fried is appealing his conviction and sentence.
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