FTX founder Sam Bankman-Fried hit with four new criminal charges

FTX co-founder Sam Bankman-Fried was hit Thursday with four new criminal charges, including ones related to commodities fraud and making unlawful political contributions, in a superseding indictment filed in New York federal court.

A source familiar with the new counts said that SBF, as he is popularly known, could face an additional 40 years in prison if convicted in the case, where he is accused of "multiple schemes to defraud."

The new charging document lays out in greater detail Bankman-Fried's allegedly fraudulent conduct related to his cryptocurrency exchange FTX and an associated hedge fund, Alameda Research, both of which went bust in late 2022.

The 12-count indictment also provides new details of hundreds of political donations that Bankman-Fried allegedly directed in violation of federal campaign finance laws.

Bankman-Fried is accused of stealing FTX customer deposits and using billions of dollars of those stolen funds to support FTX's and Alameda's operations and investments, to fund speculative investments, to make charitable contributions, and to enrich himself, the indictment notes.

He also tried "to purchase influence over cryptocurrency regulation in Washington, D.C., by steering tens of millions of dollars in illegal campaign contributions to both Democrats and Republicans," according to the new indictment, which was was unsealed in U.S. District Court in Manhattan.

Before the criminal case, SBF was known as a major donor to Democrats.

Bankman-Fried, who remains free on a $250 million personal recognizance bond after being first charged in late 2022, has pleaded not guilty in the case.

The new indictment adds yet more legal pressure on SBF, whose close associates, FTX co-founder Gary Wang and ex-Alameda CEO Caroline Ellison, pleaded guilty in December to multiple fraud and other charges. Both Wang and Ellison are cooperating with the U.S. attorney's office in Manhattan against Bankman-Fried.

The new indictment accuses him of securities fraud, wire fraud, and multiple conspiracy counts related to wire fraud on FTX customers and Alameda's lenders; illegal campaign contributions; money laundering; operating an unlicensed money transmitting business; and bank fraud.

Manhattan U.S. Attorney Damian Williams, in a statement on the new indictment said, "We are hard at work and will remain so until justice is done."

The charging document lays out how Bankman-Fried allegedly operated an illegal straw donor scheme as he moved to use customers funds to run a multimillion-dollar political influence campaign.

Bankman-Fried and fellow FTX executives combined to contribute more than $70 million toward the 2022 midterm elections, according to campaign finance watchdog OpenSecrets.

The indictment claims that Bankman-Fried and his co-conspirators "made over 300 political contributions, totaling tens of millions of dollars, that were unlawful because they were made in the name of a straw donor or paid for with corporate funds."

"To avoid certain contributions being publicly reported in his name, Bankman-Fried conspired to and did have certain political contributions made in the names of two other FTX executives," the new filing claims.

Former FTX Chief Executive Sam Bankman-Fried, who faces fraud charges over the collapse of the bankrupt cryptocurrency exchange, exits the Manhattan federal court in New York City, February 16, 2023.

Eduardo Munoz | Reuters

The document refers to one such example, in 2022, when Bankman-Fried and "others agreed that he and his co-conspirators should contribute at least a million dollars to a super PAC that was supporting a candidate running for a United States Congressional seat and appeared to be affiliated with pro-LGBTQ issues." 

The group of conspirators, according to the document, selected an individual only identified in the document as "CC-1" or co-conspirator 1, to be the donor.

However, in 2022, then-FTX Director of Engineering Nishad Singh contributed $1.1 million to the LGBTQ Victory Fund Federal PAC, according to Federal Election Commission filings.

Singh, who did not immediately respond to a request for comment, has not been charged with any wrongdoing. Albert Fujii, a spokesman for the PAC, told CNBC "we have set aside funds and will take appropriate action once we receive guidance from authorities."

SBF's alleged campaign finance scheme included efforts to keep his contributions to Republicans "dark," according to the new indictment.

And, the alleged straw donor scheme was coordinated, at least in part, "through an encrypted, auto-deleting Signal chat called 'Donation Processing,'" according to the indictment.

The document says another unnamed co-conspirator "who publicly aligned himself with conservatives, made contributions to Republican candidates that were directed by Bankman-Fried and funded by Alameda," the crypto tycoon's hedge fund.

Again, the document does do not name the alleged second FTX co-conspirator who contributed to Republican candidates.

Ryan Salame, the co-CEO of FTX Digital Markets, a subsidiary of FTX, donated more than $20 million to Republicans during the 2022 election cycle, according to OpenSecrets. Salame has not been charged with any wrongdoing.

Salame could not be reached for comment. A spokeswoman for Salame did not return a request for comment.

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The indictment alleges that Bankman-Fried and his allies allegedly tried to "further conceal the scheme" by recording "the outgoing wire transfers from Alameda to individuals' bank accounts for purposes of making contributions as Alameda 'loans' or 'expenses.'"

The document says that "while employees at Alameda generally tracked loans to executives, the transfers to Bankman-Fried, CC-1, and CC-2 in the months before the 2022 midterm elections were not recorded on internal Alameda tracking spreadsheets."  

The internal Alameda spreadsheets, however, "noted over $100 million in political contributions, even though FEC records reflect no political contributions by Alameda for the 2022 midterm elections to candidates or PACs."

An ethics watchdog group has asked the Federal Election Commission to investigate Bankman-Fried for alleged "serious violations" of election law, citing his admitted contributions of "dark" money to Republican-aligned groups during the 2022 primary season.

A group of FTX entities that is attempting to claw back contributions made by SBF and others earlier this month announced they are asking for the return of that money by "sending confidential messages to political figures, political action funds, and other recipients of contributions or other payments that were made by or at the direction of the FTX Debtors, Samuel Bankman-Fried or other officers or principals of the FTX Debtors."

— Additional reporting by CNBC's Jim Forkin.