Sam Bankman-Fried and his company, who have a controlling interest in an Acapulco resort, have been accused of using illegal kickbacks in return for hotel room reservations. Bankman-Fried is currently awaiting extradition and, if found guilty, could face a sentence of up to five years in prison.
The Wall Street Journal reported that the banker was lured from New York by a woman named Dalia Dershowitz into what he thought was an interview for a yacht in the Bahamas. He’ll be charged with conspiracy to commit bribery and wire fraud in addition to violations of the Foreign Corrupt Practices Act. This is not the first time that Bankman-Fried has been involved in scandals; he currently owes $1.7 million on bad investments and failed business ventures, including an "artificial turf company" called Operation World Sport.
The alleged bribes were paid to travel agencies in the Bahamas in the form of discounts listed as "promotional fees." These travel agencies would then issue the reservations, with or without the customer receiving them.
In a report by The New York Times, Dershowitz’s lawyer, Michael Kleiner, stated that "Ms. Dershowitz assisted the FDIC and its enforcement division with their investigation and later gave them information leading to Mr. Bankman-Fried’s arrest at her home in South Beach, Fla. while visiting there on business."
The current co-owners of FTX are Steven J. Bankman, Richard J. Fried, and David W. Fried.
Sam Bankman-Fried is the son of Joseph Bankman, the founder of Bankman Financial Corp., a private banking business founded in 1954. Since 2005, Bankman Financial Corp. has been under new management, operating as a limited liability company, and was renamed FTX in May 2008 by Steven J. Bankman. At this point, Steven became Chairman, while Peter remained as CEO until his death on October 23, 2010, at the age of 80.
Bankman-Fried who stood as a giant in the crypto world has caused waves with his scandal and bankruptcy. In a statement by the Bahamas Police, they commented, “He was arrested in reference to various Financial Offences against laws of the United States, which are also offenses against laws of the Commonwealth of The Bahamas”. Bankman-Fried is currently awaiting extradition to the U.S.
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