FTX founder Sam Bankman-Fried’s two bond guarantors unsealed, ties to Stanford
cnbc.com
cnbc.com
We're all obsessed with the details of SBF's bail because we're too bored, and looking for fun stories. The bail situation with SBF is the least interesting thing about the case.
By all means, dunk on the people making insurance payments to cover his bail! It's a weird thing to decide to do! But none of it has much to do with anything fundamental about the case.
They made no payments of any kind:
>>Kramer signed a $500,000 unsecured bond, while Paepcke signed the same type of bond for $250,000.
And his bail isn't being "covered", except by a lien on an asset worth 1-2% of the amount and promises to pay the rest (that no one thinks the primary guarantors can actually honor).
You lost me -- how does that justify you falsely referring to (some of) the guarantors as "people making insurance payments to cover his bail"?
If you really want to look downthread, you can see where I correctly described the current state of affairs that you're now informing me of:
https://news.ycombinator.com/item?id=34810830
https://news.ycombinator.com/item?id=34811063
There's no one "making insurance payments to cover his bail". If you wanted to make a witty remark that has a factual basis, you should have said, "By all means, dunk on the people exposing themselves to a loss if the defendant flees."
>The point of the bail arrangement is to guarantee his appearance, not to extract money or repay his offenses, so this concern with how the government recovers this "asset" seems misplaced.
I don't have a concern with the government recovering this asset. I have a concern with people spreading misinformation and then changing the topic when corrected -- like you did when falsely saying that Kramer and Paepcke were making (something correctly describable as) insurance payments, or referring to the $250 million as "covered".
I also have a concern with bail figures being treated as meaningless (the first link).
Why is he using a VPN then?
He already got caught once: https://www.cnn.com/2023/02/01/business/sbf-bail-witness-tam...
When blue collar defendants go to bail bondsmen, they often specifically demand collateral from other people, to make it more likely the defendant appears.
Most people don't know much about white collar crime because it just doesn't come up that often. When a case does become big news, it's worth analyzing it as a case study for how white collar crime is handled in general. The specifics about how he made bail may not be interesting to you, but they obviously are to many other people who don't usually follow this stuff.
As an analogy, look at police brutality or sexual harassment. There are thousands of documented instances that all look pretty similar, but occasionally one story, for one reason or another, will explode and shine light on a messed up situation that many people are ignorant of, or misinformed on.
To be fair, blue collar defendants also get much better (financial) terms in the federal system (and often no cash component) than in state systems. The main distinction at work that makes SBF’s case not what people have been trained on by media and common experience is not of wealth/class but of federal vs. state system, when most experience with bail is state not federal and most media portrayals are of (often distorted pictures of the) state systems.
He does it because of the formal requirements and motivations behind bail, and particularly how those differ between the federal system and the bulk of the state systems.
So, you can not want to talk about the details of formal requirements and motivations, but then you don’t really care about how he got where he is when other accused criminals are treated differently. You just want to vent about the difference without understanding.
The latter is uninteresting; the former interests the public who is concerned by inequality in our legal system.
No amount of screaming “but the pretense type checks!” will be a useful or interesting answer to this discussion about social class.
The motivations behind bail are the power dynamics.
And the difference between the motivations–the power dynamics–in the federal and most state systems are central to the issue here, and are directly reflected in the different formal requirements.
Waving those off is choosing ignorance.
I do. It's important to know how the the world works.
> We care about how this fraudster came to sit at home playing video games and chatting up witnesses all day, while many many others sit in jail as their cases drawl out, and many indeed die there.
I care about this, too. But to address this, it's also important to know what the law is, and why.
Nah. There was some news recently of a guy that died of dehydration while in jail [1] for I don't recall how long. During this time he was forced to drink his pee and eat his own feces routinely. He was in jail because he couldn't pay a $100 bail in time. SBF was rescued (that's the correct term) from a Bahamas prison and taken home in a private jet. He now has to wear an ankle monitor, so boo hoo :'( I guess?
"We" are obsessed with this situation because of how blatantly shows the extreme hypocrisy and double standards of the prevailing system of justice. It's a whole different world for the privileged, well-connected classes.
Edit: Found the news article for [1], quite a distressing read so you're warned. https://www.newsweek.com/2023/01/20/starved-death-american-j...
If we want to get an amen chorus going about how we should fix bail for blue collar defendants, I'm right there with you. But there is a longstanding HN fantasy --- it comes up a lot! --- that the DOJ should be expected to deliberately treat white collar defendants poorly, despite the near certainty of their appearance for trial, just to equalize things with blue collar defendants. That's simply never going to happen.
(There's a lot of hope that the opposite, and far more productive reform, of not randomly putting nonviolent blue collar defendants in jail because they can't pay bail, will happen --- especially in states like my own [Illinois]).
The latter two paragraphs I added after some responses; also, I dialed back my first sentence; sorry, was just collecting/clarifying my thoughts.
And I disagree directly with what you're saying anyway, because by lowering the standards for the rich we might actually see a push by influential people to raise the standards for everyone.
I was pointing out why lowering the standards for the rich would likely lead to better standards for everyone because we live in a bifurcated society. It would be nice if we didn't, but we do.
I disagree that the rich should be treated better than the poor and advocate for helping the masses, not the elite. If making the elite suffer helps the masses then I'm all for it.
I was responding to this part of that comment, meaning I agree it would be better to have the same high standards for everyone. But that's ideally, the question is how do we get there?
If we can get there without lowering standards for the rich I'm all for it. I'm not advocating for the correct solution to this because I don't know what it is. I was only responding to what you said:
> No, but advocating for the system to deliberately abuse other people to make a point isn't doing anything to correct the injustice; rather, it's (marginally) worsening it.
By pointing out that I disagree, I think it would actually make the system better overall when you consider compounding effects.
So you want to hurt people not yet convicted because why? That is the most American thing I've read today.
Skipping and whistling my way to Omelas.
I'm glad the court system and laws exist to prevent people like you from doing exactly such barbaric lawless retribution and ugliness on fellow human beings.
Personally I much more fear people like you that openly advocate for such cruelty than people that steal others money. Both are evil, both fell the law should be ignored when it suits their needs, but your style has historically resulted in vastly larger harm to humanity. I expect you don't see this.
The legal system, as it currently exists, enables and is sometimes the cause of such "barbaric lawless retribution," actually.
https://en.wikipedia.org/wiki/Kalief_Browder
https://en.m.wikipedia.org/wiki/Death_of_Sandra_Bland
https://en.m.wikipedia.org/wiki/Death_of_Darren_Rainey
Correcting your strawman of my argument: if a rich and influential person suffering because of the corrupt and cruel nature of the current system results in that system changing to be less cruel and corrupt, particularly towards people who are not rich and influential, then please, let them suffer. In the interim, I will assume that your insistence on perpetuating this system, in the face of its cruelty towards thousands of innocents, in the interest of saving one privileged criminal, comes from either a place of deep ignorance or deep bigotry (implicit or otherwise). In either case, I find myself absolved of any need to give your mistaken opinion any further attention.
I'm comfortable with my "loathing SBF and people like him" bona fides, but I don't have my understanding of public policy wrapped tightly around those feelings.
I'm generally in favor of the argument that we should fix disparities by bringing up the disfavored group rather than bringing down the favored group. I think that's generally right.
But, I do think there's a serious risk of allowing a two-tier system of justice to exist (and we do have a two-tier justice system, I think at this point there's pretty little argument over that; the rich are treated very differently from the legislature, the prosecutors, the police, and the judges). Allowing them to continue to have a separate system where they don't experience the same injustices that poor defendants regularly experience means the people with political power are very disinclined to actually cause meaningful change. So the injustices will perpetuate.
For that reason, I'm inclined to call for exactly that: white collar defendants to get the exact same treatment as blue collar defendants. No worse, but no better. Because when those white collar defendants experience those horrific injustices, the system is more likely to change for the better.
I suspect this is just a difference of expectations. I think it's more likely we can treat white collar defendants worse, and then improve the system for everyone, than it is to convince those in power to just start treating blue collar defendants better. But I understand you probably don't agree with that.
Ultimately, I think we must continually work to eliminate the discrepancies in the justice system, because those discrepancies allow people with power to completely disregard this as a significant issue. And I think we probably will always need to be working at this from both ends.
I'm not the only one making this point; I'm shoplifting it from Ken White, who has spent his career working on and advocating for some of these issues, and who is loudly sighing and complaining about the coverage of SBF's bail on the Serious Trouble podcast. There is interesting stuff going on in this case! But white collar bail treatment isn't one of those things.
I don’t have an expectation that it will be the breaking point, but breaking points tend to come all of a sudden at once. Sometimes the straw that breaks the camel’s back isn’t the most significant straw.
My reason for wanting to talk about it, is the breaking point will come earlier when we agitate more each time the injustice is made apparent.
And Ken White is a great advocate. I also listen to him and read his works regularly. But he—while better than most lawyers—tend to have the same strong status quo tendency that lawyers have. They are embedded with the system as it is, and focused on the incremental reforms that make it better. Which is great! It’s super important to have people working on that problem and problem space.
But it’s also important to have people pushing more… revolutionary ideas for reforms to the criminal justice system. I think both are important to be pushing for. The nuts and bolts incremental improvements to the existing systems are the most likely to have immediate impact now. But the big reformers are the ones that will push us towards a more equitable justice system in the long term.
Frankly, I think the current justice system is a mockery of its own name, and count myself among those thinking it needs a more systematic overhaul. Hence my agitation over the SBF issues. But, again, I still think the incremental improvement work is important and necessary
Bail amount is the penalty for you if you fail to comply.
The amount you deposit (or other property which you give, either physically or as an interest via a lien) is security.
Surety is other people accepting a penalty (which may be equal or less than the full bail amount) if you fail to comply.
Lots of states have formulaic relations between these that are designed to (1) keep people, especially poor people, in jail, and (2) support the bail bonds industry, but they are conceptually and historically separate levers for achieving compliance.
I would take people more seriously if they were advocating for just treatment of others, rather than for unjust treatment of SBF, just because his treatment by the (on this point more just) federal system is better than the experience of many people in the (far more unjust) systems used by most US states.
Equal injustice is not the same thing as justice.
No, but it is better than the unequal injustice we have now. People are rightfully upset that SBF is getting a cakewalk compared to countless people charged with crimes that are vastly less serious.
No, more people being treated unjustly isn’t better, ever, full stop.
I know of developed nations accepting asylum requests from Americans facing no specific threat due to stories like this, I know the individuals that got it.
This was in the news because it was a travesty. Comparing SBF to this is pointless. The previous poster didn't say SBF's treatment was bad, just that it was appropriate.
It does not make sense to demand SBF does not have bail, because someone else was murdered by police.
That goes for bail-bonded pretrial detention as well.
Just because you aren't behind bars doesn't mean you have freedom to communicate however you like.
Especially given that one is guaranteed access to council, and often is permitted visitors...
I don't agree with the court, but it is the case that he was found guilty of contempt.
Would you please do an AMA on here or /r/ at some point?
It's an interesting story. Your comment reminds me of one time when PG (when he used to comment) parent-ally said 'now you should all get back to work'.
> The bail situation with SBF is the least interesting thing about the case.
Thank you informing what you think others should find interesting. Sounds like a movie critic deciding whether a certain movie should be entertaining or not (based on what they personally admire or find interesting). Flash purpose of a movie (and a news story) is to sell tickets and advertising ... generally by holding people's interest.
> By all means, dunk on the people making insurance payments to cover his bail! It's a weird thing to decide to do!
Thanks for your approval of what others find interesting. Of all places on HN where you have more points (redeemable for NOTHING) than anyone. Weird?
What makes you believe there’s no hidden connection? Why would these 2 Stanford people post bail? Do you not feel there’s something to be uncovered in SBF’s web of lies?
> Larry Kramer, who is president of the William and Flora Hewlett Foundation and dean emeritus at Stanford Law School
Buying a bond is done by paying a portion of the total bail amount.
It's the same as: I have $1M liability insurance or something, but it only costs me $100/mo.
I thought it was closer to the former.
Bail becomes due if you fail to comply with the release terms; in some systems, you can pay the amount of bail in advance as security, in which case it is refundable.
> bond usually means you pay an unrecoverable fraction of the bail for someone to pay the bail for you.
Typically, to stand as surety for you in place of you providing security in the form of bail payment. When this is a bail bondsman, they usually do not actually deposit the amount of bail as security, they have met state-issued guidelines that allow them to stand as sureties without doing so.
“Sureties” is more correct than “bond guarantors”, and a mix of the first and neither, but mostly neither. (That is, his parents have executed a lien on their home, and the other sureties have not provided any security.)
This is true if you are “buying a bond” from a bail agent, (where you are essentially paying the agent to stand as a surety) especially in one of the many states which specifies an exact share of the bail penalty for which such bonds must be sold by registered bail agents, so as to prevent price competition between bail agents.
But…that’s not relevant, because the federal court he is in (the federal system has some leeway in how particular courts operate on this) doesn’t use bail agents, the people standing surety are doing so for reasons other than they are paid by the accused.
Sigh ... to echo my earlier comment[1], this (further) makes the bail/bond process feel like something of a farce. It's "bail is set at -- zomg! -- $250 million!!" ... and then the accused walks out because his parents accepted a lien on a property worth 1-2% of that, and two people said "trust me bro" for another 0.3%.
Sure, they will "come after" the parents for the full $250 million if SBF flees. But everyone involved knows they're not getting anywhere close to that, even at the most optimistic.
Stop it. Just friggin stop it. Lower the bail, or require meaningful assurance of it, keeping in mind just how slippery of a defendant you're dealing with.
Wittgenstein: "A wheel that turns, though nothing turns with it, is not part of the mechanism."
A bail that is set, but will never be collected, is not part of the assurance to appear at trial.
You're either a flight risk / threat to the community, or you're not. The ability to part with a couple grand doesn't change those facts. No one presumed innocent should sit in jail for months/years awaiting trial just because of their bank balance or lack thereof.
Unless I am missing something, the original commenter seems mad that the bail is easily met and he walks. How would letting him walk anyway fix it?
https://queenseagle.com/all/detained-until-proven-guilty
> Bryson’s son, whose name is being withheld for fear of reprisal, is one of 306 people incarcerated on Rikers Island whose pre-trial detention has lasted three years or longer. There are an additional 441 detainees who have been held for two to three years and nearly 1,000 who have been held for one to two years, according to the New York City Department of Correction.
Pretrial detention also puts the presumed-innocent person at near-certain risk of job loss and other negative consequences.
I'm sure the location of the jail and the Cost of Living of the surrounding area has an affect on the cost.
> Rikers Island costs half a million a year per detainee.
Which averages down to $1,369 a day or $57/hr per prisoner. Which is about the same cost as 2 average NYcops[0] (Maybe NYC is higher?) per hour.
So I guess the cost to house and the cost to retrieve are about the same minus the admin/paperwork? Although that assumes the 2 cops show up and the person is exactly where they say they are and go into custody without issue.
[0] https://www.indeed.com/career/police-officer/salaries/New-Yo...
Nevertheless, the real issue there is refusing to set trial dates and dragging out the proceedings, typically done in the hope of getting the accused to plea guilty so an up and coming DA can brag about their prosecution rate when they run for Governor.
Because the main purpose of the bail amount in his case is because bail secomes a virtually automatic default judgement, and its not as easy to keep a person out of reach of criminal process and all their assets out of reach of a default judgement in favor of the US government as to do just the former, so him and his parents being on the hook for the full value is a significant additional cost to attempting flight.
Those who are flight risks or ongoing threats to the community should not.
Their bank balance is irrelevant to the decision, and making it part of the decision winds up with precisely these sorts of goofy scenarios.
Is SBF a flight risk? Yes. Handle that via monitoring (as they're doing, clearly) and if he keeps wriggling around his release conditions, revoke his bail.
People show up in court at roughly the same rate whether there's cash bail or just plain bail; there's little evidence it moves the needle.
That no one is 100% a flight risk or not a flight risk but rather there is a spectrum and the question is to what a degree they are a flight risk.
In that world knowing that your parents will lose their home and you'll be directly responsible for powerful people losing significant sums of money if you run decreases (though can never totally eliminate) the odds of someone fleeing.
Alternatively you could argue that discerning if someone is a flight risk or not is prohibitively difficult so their willingness to have their parents / acquaintances indebt themselves on their behalf is a good enough proxy for their intent?
There's little evidence cash bail changes the calculus.
https://www.americanprogress.org/article/cash-bail-reform-is... (motivated, but well cited)
> In places that have implemented cash bail reform, rates of pretrial re-arrest remain unchanged.
> At the same time, numerous studies show pretrial incarceration has a “criminogenic effect,” meaning that it increases rather than decreases crime. One study found that cash bail assignment was associated with a 6 percent to 9 percent increase in recidivism. After 23 hours in pretrial incarceration, any additional time in detention has been “associated with a consistent and statistically significant increase in the likelihood of rearrest.”
https://www.thecity.nyc/2022/2/21/22944871/new-york-bail-ref...
> Garden State voters enacted their own bail reform laws in 2014 after a special committee studied the issue for nine months with a group of prosecutors, lawmakers and reformers. The law took full effect in 2017 and after 5 years of implementation, it has apparently achieved its purpose. The number of people imprisoned pre-trial on bail of $2,500 or less fell from more than 1,500 before the bail reform laws to just 14 people last year, according to the New Jersey court system. At the same time, the rate of people awaiting trial who commit additional “indictable offenses” has remained flat at 13.8%. And the appearance rate — how often people awaiting trial come back to court — increased slightly last year, from 90% in 2019 to 90.9% in 2020.
> If someone's enough of a flight risk to earn $250M bail, their position on said spectrum seems pretty clear.
My understanding is that money was only one of many conditions of SBF's bail. Others included 24/7 onsite monitoring conducted by a third party at his expense.
So at least in this specific case there's more to the story than just other guaranteeing the money for the cash portion of his bail.
This is exactly how the federal bail system has always worked, being released while on trial is literally a constitutional right.
His parents are a different story, and my understanding is that they'd be zeroed out if SBF jumped bail.
They didn’t post anything. They stand surety for the smaller amount, they didn’t provide security for it. This was part of the terms of his bail agreement that his parents would stand as full-value sureties as well as providing certain security (nowhere near the full bail amount is secured), while two other sureties would stand for lesser amounts to be specified separately.
Paying the full amount of bail as cash security is simply not how things normally work, though it is an option in some cases in some systems.
This is not even, "put a $750k lien on a brokerage account (with more than that in it) until the trial is over".
This is, "We will owe you $750k if the defendant flees, which you can then try to collect."
1: "residential ground lease" not "fee simple"
In some cases, Stanford will buy on-campus homes and renovate them, and then resell them.
And people thought the skills he developed running FTX weren't useful...
They are secondary, partial value sureties, his parents are full-value sureties.
(The relation between bond amounts, sureties, and security interests in the federal system is often radically different than state systems, for a variety of reasons, not least among them that bail bonds firms aren’t as politically powerful in the federal government as they are in state governments.)
Maybe the purpose of $250m is to get attention not to mean anything more than $5m (considering if he skips they are not collecting $250m
Mr. Kramer served as a professor and dean at Stanford Law School from 2004 to 2012, according to an online biography. He is currently president of the William and Flora Hewlett Foundation, which, according to its website, makes efforts to respond to “pressing and timely problems, such as challenges related to democracy and cybersecurity.”[1]
This individual and his companies defrauded people and then used their stolen money to make donations to politicians in order to buy influence. Doesn't that exactly describe "pressing and timely problems related to democracy"?
Watching from the sidelines, I can't decide if it's "scientists warning about climate change" or "homeless guy on the corner holding a 'THE END IS NEAR' sign". It seems impossible that they could be right, but then wacky, Madoff-level stuff like this happens, and I'm like, "Huh, maybe the scale of the brazen criminality that's implied isn't actually too large for reality to abide."
People within your socioeconomic class can be racist towards you and upper social mobility can be more difficult based on the color of your skin.
This statement is laughably false. Yes as you get richer, skin color matters less, but it still does. You can just look at the games that rich black republicans have to play to stay in the club.
The following is a bit of a rant so go ahead and ignore it if you wish: It is a bit wild to me how common sentiments like this are on hacker news, when so many people claim to be rationalist types. Then again, a group of mostly white people claiming systematic racism is gone in their so-called merit-based hierarchy should be expected.
Not refuting what you are saying, but could you elaborate on this statement?
I'm not white.
I don't believe we live in a merit-based hierarchy, especially for high status positions. Those go to less competent, connected, ideologically "correct" people.
And the part you wrote before comes off as a bit of a rant also, with a lot of assumptions and cardboard cut out stereotypical view of politics. Both Republicans and Democrats serve the wealthy and powerful.
Obviously, this plays out much differently if you and your family are poor.
> Mr. Miller told me that the bankruptcy filings of FTX International Group, the Alameda Group, and the FTX.US Group had to be in the United States because otherwise S&C couldn’t do the job. (35, p. 8)
> Mr. Miller stated that he needed to include FTX.US as part of the bankruptcy because FTX.US had the cash to pay S&C its retainer. Without this retainer from FTX.US, S&C wouldn’t file. I told him that it wasn’t proper for FTX.US to pay for the expenses of the bankruptcy of FTX International Group or the Alameda Group.
[1] johnreedstark.com/wp-content/uploads/sites/180/2023/01/FriedbergObjection.pdf
He didn’t have to pay anything, but then, that’s not uncommon in federal bail.