Former FTX executive Ryan Salame is back in court today because Judge Lewis Kaplan wants answers about the shady deal that led to his guilty plea last year. That deal earned him a 7.5-year prison sentence.
It wasn’t just any regular plea though. Ryan’s lawyers now say the deal was cooked up behind closed doors, with prosecutors making promises they didn’t keep.
Last month, Ryan’s legal team asked Judge Kaplan to void the guilty plea for campaign finance and money-transmitting crimes. Their argument? Prosecutors didn’t hold up their end of the deal.
His attorneys said the Manhattan U.S. Attorney’s Office told Ryan in April 2023 that if he pled guilty, they’d stop investigating his partner, Michelle Bond. Michelle, who used to be a lawyer at the SEC, was fighting her own legal battles.
She was facing charges tied to her failed 2022 run for Congress. The charges were serious—four counts of campaign finance violations. Prosecutors promised to back off from investigating Michelle if Ryan took the fall.
However, a twist came when Michelle got indicted anyway. That indictment was unsealed just one day after Ryan’s team tried to back out of the deal. Just days after asking the judge to throw out his guilty plea, he changed his mind again.
Ryan filed a motion to withdraw his request to void the deal. Meanwhile, prosecutors hit back hard. They dropped a 32-page memo last week, shutting down Ryan’s claims.
They said the deal was legit, and there was no shady back-room coercion. Kaplan, though, has made Ryan’s attendance in court a condition of his bail.
In May, he gave him a heavier sentence than even the prosecutors had asked for. While they suggested five to seven years, Kaplan went for 7.5.
Ryan was supposed to report to prison already, but a leg injury has delayed things until late October.
Meanwhile, over in another corner of the FTX fallout, Caroline Ellison is looking for some leniency in her sentencing. Like Ryan, Caroline played a big role in the collapse of Sam Bankman-Fried’s defunct crypto empire.
She was also his girlfriend and the star witness in the case against him. Her lawyers argue that she cooperated with the U.S. Attorney’s Office and regulators right after the exchange crashed.
She voluntarily returned from the Bahamas and helped the authorities understand how things went so wrong at both FTX and Alameda.
Kaplan cited Caroline’s testimony when sentencing Sam to 25 years in prison. The court’s Probation Department is on Caroline’s side. They recommended that she get time served along with three years of supervised release.
They pointed out her “extraordinary cooperation with the government” and her clean record outside of this debacle. Her lawyers also pointed out that she received character testimonials about her ethics and integrity.
They added that Caroline “poses no risk of recidivism and presents no threat to public safety.” They believe the law would be respected if the court granted her leniency.
