Barbara Fried and Joseph Bankman have a lot to worry about after they posted a whopping $250 million bond for the bail of their son Sam Bankman-Fried.
The bond was secured by equity in his family home, signatures of his parents, who are both Stanford Law professors, and two other individuals with considerable assets. Joseph Bankman and Barbara Fried offered their home in Palo Alto, California, for their son's bail. They signed the bond agreement, meaning that they would have to come up with $250 million if Sam Bankman-Fried flees. The bond doesn't reflect the family's assets. It should be noted that in November, SBF said he now had close to nothing left and is down to one working credit card with around $100,000 in that bank account.
Judge Gabriel Gorenstein said SBF would require strict supervision following his release to his parents' home in California. The parents are seemingly worried about their own legal jeopardy as reports state that they were at some level involved in SBF's efforts to build the fraudulent crypto exchange FTX into a $32 billion empire.
Largest Bond in US History
With Joseph Bankman and Barbara Fried having had to sign the $250 million bond, Ira Judelson, a prominent New York bail bondsman who specializes in high-profile defendants, said this is the largest bond he has ever heard of in his history of doing bonds. This is because SBF's alleged crimes and the collapse of his $32 billion firm as one of the largest financial frauds in US history. Sam Bankman-Fried's bond package far exceeds some of the most notorious cases in that history.
Parents Were Likely Involved
Matthew Barhoma, a criminal defense and appellate attorney, believes that SBF's parents were involved in building up his fraudulent crypto exchange. "I can't imagine a world where Bankman-Fried's parents were not his financial and legal advisors. I think prosecutors will try to use his parents against their son," he said. "The parents of a defendant do not enjoy anything similar to the marital privilege that protects a person from having to testify against their spouse."
However, there is no evidence so far that link the parents to their son's alleged crimes. Barhoma said Bankman and Fried's level of legal culpability depends on their knowledge of the alleged fraud. "It's likely that some level of responsibility falls on his savvy, sophisticated parents. Among other things, it's been reported that they influenced their son's narrative about using crypto to do good in the world." The attorney pointed out that the parents could have encouraged his recent public statements about making a lot of mistakes, but never knowingly committed fraud.
The parents had flown to the Bahamas last month to support SBF amid FTX's fall. When questions about pressing possible charges against Bankman and Fried surfaced, Damian Williams, the US Attorney for the Southern District of New York, said the investigation was ongoing. He didn't say whether the parents would be charged.
More than Just Supportive
John J. Ray, the current CEO of FTX, testified before the House Financial Services Committee, on Tuesday said Bankman had provided legal advice â "He received payments...the family certainly received payments." But SBF in an interview on December 1 with the New York Times said his mother and father bore no responsibility for the collapse of FTX.
However, its alleged that the parents were much more than just supportive. Bankman is stated to have helped the crypto exchange hire lawyers, regularly travelled to the Bahamas, consulted on tax-related matters and advised Sam Bankman-Fried on his testimony before the House Financial Services Committee. The father also managed FTX's charitable operations and helped to push the narrative that his son wanted to use crypto to help low-income people gain a foothold in financial markets.
The support parents are surely feeling the heat.