MANHATTAN (CN) — A federal judge sentenced former FTX co-chief executive officer Ryan Salame on Tuesday morning to 90 months in prison for his role in straw donor conspiracy with convicted cryptocurrency mogul Sam Bankman-Fried that flooded both Democrat and Republican campaigns with tens of millions of dollars in illegal contributions.
Salame pleaded guilty in September 2023 to conspiracy to make unlawful political contributions and defraud the Federal Election Commission and conspiracy to operate an unlicensed money transmitting business.
U.S. District Judge Lewis Kaplan on Tuesday imposed a sentence of 90 months in prison, higher than prosecutors’ request for a sentence of five to seven years’ imprisonment.
"The campaign finance offense is one of the largest-ever in American history, and the unlicensed money transmitting business exchanged more than $1 billion without proper supervision,” prosecutors wrote in their sentencing submission. “Those are serious crimes, and a substantial sentence is required to ensure that Salame receives just punishment."
As part of his plea deal the 30-year-old Salame agreed to pay a $6 million penalty and more than $5 million in restitution, in addition to forfeiting his Porsche 911 Turbo and two properties in Massachusetts.
Despite his guilty plea, Salame did not cooperate with prosecutors’ case against Bankman-Fried, making him the only major FTX co-conspirator who did not take a cooperation deal with federal prosecutors to testify against Bankman-Fried, who was sentenced to 25 years.
Caroline Ellison, Nashad Singh and Gary Wang each testified against Bankman-Fried at his trial and are awaiting sentencing, all hoping that their cooperation results in significantly lighter sentences.
Prosecutors said the campaign contributions were paid for with corporate funds from Bankman-Fried’s Alameda Research cryptocurrency trading firm, some of which had been stolen from FTX’s customers, but concealed the source of the funds by having Salame and Singh serve as conduit contributors or straw donors
“Notwithstanding his awareness of the campaign finance laws, in order to conceal the true source of the funds, Salame agreed with others that the contributions would be transferred from Alameda’s bank accounts to bank accounts in his, Singh, or Bankman-Fried’s name, and then from those individuals’ bank accounts to the relevant campaigns,” prosecutors wrote in their sentencing memo.
Represented by attorney Gina Parlovecchio, Salame’s defense lawyers argued in his sentencing submission that he had accepted responsibility for his crimes and attempted to make amends by attempting to assist the U.S. and Bahamian government.
“While Ryan did not plead guilty pursuant to a cooperation agreement, he did endeavor to assist the U.S. and Bahamian governments’ investigation of Bankman-Fried and other FTX insiders,” Salame’s attorneys wrote. “From the first available opportunity, Ryan alerted Bahamian regulators as soon as he learned of the fraud committed by Bankman-Fried and his inner circle.”
U.S. Attorney for the Southern District of New York Damian Williams applauded the sentencing.
“Ryan Salame agreed to advance the interests of FTX, Alameda Research, and his co-conspirators through an unlawful political influence campaign and through an unlicensed money transmitting business, which helped FTX grow faster and larger by operating outside of the law,” Williams said in a statement Tuesday afternoon.
“Salame’s involvement in two serious federal crimes undermined public trust in American elections and the integrity of the financial system,” he said. “Today’s sentence underscores the substantial consequences for such offenses.”
According to prosecutors, Bankman-Fried made $40 million in donations to Democratic campaigns to improve his personal standing in Washington, D.C., increase FTX’s profile, and curry favor with candidates that could help pass legislation favorable to FTX.
Salame separately made over $20 million in contributions to Republican campaigns in his own name, making him the 16th top individual contributor from 2021 to 2022.
According to OpenSecrets.org, a nonpartisan group that tracks campaign spending via Federal Election Commission filings, Bankman-Fried was the second-biggest Democrat-leaning megadonor in the 2022 election cycle.
At Bankman-Fried’s trial, Singh, former director of engineering at FTX, testified about how he carried out the straw donor scheme behind the campaign finance fraud crime to which he has pleaded guilty: He gave signed, blank checks an assistant working for Bankman-Fried’s younger brother Gabe, in order to make millions of dollars of political donations in Singh’s name.
According to Singh, Gabe Bankman-Fried's Guarding Against Pandemics political action committee would message a group chat requesting a donation in Singh's name to recipients that had been selected by Sam Bankman-Fried.
Prosecutors showed a screenshot of chat where a political consultant working for Bankman-Fried told Singh, “In general, you being the center left face of our spending will mean you giving to a lot of woke shit for transactional purposes.”
"For advantageous optics," Singh explained to jurors.
According to Federal Election Commission records, Singh contributed roughly $9.7 million in 2022 and in late 2020 to various Democratic candidates and committees.
He said other campaign contributions in his name to Guarding Against Pandemics' choices were actually executed by Salame, who logged into Singh's bank accounts and queued up wire transfers that required Singh’s e-mail approval to complete the transaction.
Last month, Bankman-Fried, appealed his conviction and 25-year prison sentence to the Second Circuit Court of Appeals.
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