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There is a recent article about the trial of Ryan Salame surrounding the crypto-currency platform FTX. The article starts with the big headline that he forfeited $1,5 billion and then writes later on that he also forfeited $6 million in cash, some real estate and a car (presumably valued something like $100k).

This looks like a very strange collection, if he is actually a billionaire able to pay $1,5 billion taking a car seems pretty pointless. So I would assume this first fortfeiture doesn't represent anywhere close to $1,5 billion in value? Maybe it corresponds to claims against the now bankrupt FTX worth cents on the dollar if anything at all? What did he forfeit there?

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  • I have no idea what would be good tags for this question. Fell free to edit.
    – quarague
    Commented Sep 9, 2023 at 7:15

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No claims against FTX were involved, it's all money lost by Salame to the government to satisfy the judgment from his guilty plea.

Ars Technica reports:

A money judgment of $1.56 billion was entered against Salame, but he will be allowed to satisfy the judgment by making a $6 million payment to the US and forfeiting two properties, a business, and a Porsche. He also agreed to provide $5.6 million in restitution to FTX debtors.

In the 7 page agreement, the forfeitire happens on the end of Page 2, indicating that most of that is in two pieces of real property, so buildings, and as arstechnica.com reports, a business unrelated to FTX. The car and cash are just side catches that make up little of the whole sum, but he is still liable for the whole:

The defendant hereby admits the forfeiture allegation with respect to Count Two of the Information and agrees to forfeit to the United States, pursuant to Title 18, United States Code, Section 982(a(1), a sum of money equal to $1,555,186,143 in United States currency, representing property involved in said offense (the “Money Judgment”). it is further understood that any forfeiture of the defendant’s assets shall not be treated as satisfaction of any fine, restitution, cost of imprisonment, or any other penalty the Court may impose upon him in addition to forfeiture. The defendant consents to the entry of the Consent Order of Forfeiture annexed hereto as Exhibit A and agrees that the Consent Order of Forfeiture shall be final as to the defendant at the time it is ordered by the Court. Under the terms set forth in the Consent Order of Forfeiture, the United States agrees to accept the Payment and forfeiture of the Substitute Assets, as defined therein, in full satisfaction of the Money Judgment.

That document only says their verdict is that value for this count, and that they agree not to appeal it at all.

The prosecution released a statement, and together with it an Information filing from the Southern District of New York, which in numbers 27 and 28 mentions the forfeiture:

  1. As a result of committing the offense alleged in Count Two of this Information, RYAN SALAME, the defendant, shall forfeit to the United States, pursuant to Title 18, United States Code, Section 982(a)(l), any and all property, real and personal, involved in said offense, or any property traceable to such property, including but not limited to a sum of money in United States currency representing the amount of property involved in said offense.
  2. If any of the above-described forfeitable property, as a result of any act or omission of the defendant: (a) cannot be located upon the exercise of due diligence; (b) has been transferred or sold to, or deposited with, a third person; (c) has been placed beyond the jurisdiction of the Court; (d) has been substantially diminished in value; or (e) has been commingled with other property which cannot be subdivided without difficulty; it is the intent of the United States, pursuant to Title 21, United States Code, Section 853(p) and Title 28, United States Code, Section 2461 (c), to seek forfeiture of any other property of the defendant up to the value of the above forfeitable property

Even if he hasn't the intended property anymore, the government can go for other property till they satisfy the judgement. It took a little, but I finally unearthed another document, labeled as "CONSENT PRELIMINARY ORDER OF FORFEITURE AS TO SUBSTITUTE ASSETS/ MONEY JUDGMENT". This document contains the full header with court file and docket number:

Case 1:22-cr-00673-LAK Document 268 Filed 09/07/23

That case number is part of the case US V Bankman-Fried - for technical reasons, there's a second docket on Court Listener with same name but different documents (and different ID). The document is top one of this docket snippet:

Snippet of the docket, documents 268 to 271 displayed

It's also a very noticeable document in this case as it lists the properties that are to be lost:

WHEREAS, the Defendant consents to the forfeiture of all of his right, title and interest in the following assets of the Defendant as substitute assets to satisfy the outstanding forfeiture money judgment:

a. The real property commonly described as 12 Housatonic Street, Lenox, MA 01240, [...]

b. The real property commonly described as 8 Tucker Street, Lenox, MA 01240 [..]

c. Ownership and equity interest in East Rood Farm Corporation; and

d. 2021 Porsche 911 Turbo S with VIN number WP0AD2A94MS257710, (a. through d., collectively, the "Substitute Assets");

Property a is very close to a property that was sold for 1.5 million, property b is about half a million to $600 000, so the two together are at best two millions.

Further, he forfeits a company worth about $430 000 in land alone, and a $170 000 car. So in total, assets of about $2.7 million are taken, maybe 5 million of you are generous. But that does not mean he pays that and is off the hook: he is still liable for the whole sum, those assets are just the tip of the iceberg - they can go after any other property not yet seized till the whole judgment is fulfilled, if he doesn't act quick and manages to fulfil the one stipulation that would limit the claim of the government:

If the Defendant makes the Payment, executes all necessary documentation to effect the Government's forfeiture of the Substitute Assets before the date of the Defendant's sentencing, and the Court enters a final order of forfeiture for all of the Substitute Assets, the United States agrees not to take any action pursuant to Title 21, United States Code, Section 853(p), seeking the forfeiture of additional substitute assets of the Defendant. If the Defendant fails to make the Payment, execute all necessary documentation to effect the forfeiture by the Government by the date of sentencing, support any motion by the Government for interlocutory sale, or the Court does not enter a final order of forfeiture for all of the Substitute Assets, the United States may take action pursuant to Title 21, United States Code, Section 853(p) up to the entirety of the outstanding Money Judgment.

In other words: if he cooperates fully, acts quickly and hands over everything listed and all the money before sentencing, those about $5 million will be all he loses. But if he is tardy or does not manage to get any of the things done... he's $1.6 billion in the hole and can't claw back anything. Sentencing after a guilty plea accepted by the court can come very quickly.

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  • So in laymans terms, he owes the government $1,5 billion but the government is satisfied if he pays them something like $10 million worth? Presumably because that is most/ all of his personal wealth?
    – quarague
    Commented Sep 9, 2023 at 10:05
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    @quarague no, the government is entitled to get everything, they just start with the stuff he gives up voluntarily and without the ability to appeal. But the government will deem itself satisfied if he can fulfill all the payments stipulated in the document before the date of the Defendant's sentencing (Document 268 Filed 09/07/23, Page 5 of 8) - which means he needs to be super quick, and if he is even an hour late, he is liable for the whole sum.
    – Trish
    Commented Sep 9, 2023 at 11:11

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