Sam Bankman-Fried’s FTX Luxury Private Jets Now in US Crosshairs

Bob Van Voris, Bloomberg News

Sam Bankman-Fried, co-founder of FTX Cryptocurrency Derivatives Exchange, leaves court in New York, US, on Thursday, June 15, 2023. Bankman-Fried faces a total of 13 counts ranging from conspiracy to commit wire fraud to conspiracy to violate the anti-bribery provisions of the Foreign Corrupt Practices Act, and faces more than 155 years in prison if convicted of all of them - although any sentence is likely to be much lower if he is found guilty. , Bloomberg

(Bloomberg) -- The US on Wednesday notified FTX co-founder Sam Bankman-Fried that it’s going after two luxury jets that prosecutors claim are the proceeds of the multi-billion-dollar fraud he’s currently being tried for in Manhattan federal court.

Ownership of the jets, a Bombardier Global 5000 BD700-1A11 and an Embraer Legacy EMB-135BJ, is already the subject of litigation in FTX’s massive Delaware bankruptcy case. A Bahamian charter airline claims it bought the planes last year for $28.4 million, based on a handshake deal with Bankman-Fried, with financing from FTX.

US Marshals seized one of the jets, the Bombardier Global 5000, in February, according to bankruptcy court filings. The Bahamian charter company still had the Embraer Legacy as of late last month, but said the US government has threatened to seize it, too.

It’s not the first time the US government has grabbed disputed assets in the wake of FTX’s downfall. It seized a slug of Robinhood shares in January worth nearly $500 million that Bankman-Fried, FTX and BlockFi Inc. have all said they’re entitled to.

The planes, which were intended for the use of Bankman-Fried, his family, friends, guests and other FTX executives, were both being upgraded with custom interiors and state-of-the-art wifi when the crypto exchange collapsed in November, according to the charter company. No one from FTX ever flew on the planes.

Bankman-Fried is on trial in Manhattan for multiple counts of fraud and conspiracy in connection with the collapse of FTX last year. He has pleaded not guilty.

Opening arguments at the trial begain Wednesday. Prosecutors said Bankman-Fried “lied to the world” as he built his cryptocurrency empire, using investor deposits at FTX as a personal bank account before the company collapsed a year ago. Bankman-Fried’s lawyers said the government portrayed their client as a “cartoon” villain, rather than the math nerd he truly was and that he never intended to “defraud anyone.”

Bankman-Fried was initially resistant to flying private because he found it excessive, according to a person familiar with the situation, who declined to be identified discussing sensitive information. He initially preferred flying commercial in either business or first class, but as the company became more successful, he was convinced to fly private, often traveling between the Bahamas, where FTX’s headquarters were, New York and Washington D.C., where he often met with policymakers.

--With assistance from Hannah Miller and Jeremy Hill.

(Adds details on trial in seventh paragraph.)