DOJ Investigates Potential Forfeiture of Sam Bankman-Fried's Multi-Million Dollar Jets

Police & Regulations
Oct 7, 2023 at 12:45 pm

In a recent legal development, the ownership of two opulent private jets registered in the name of Sam Bankman-Fried, the founder of FTX, has come under intense scrutiny. Despite being ostensibly associated with Bankman-Fried, the jets have never been utilized by him, adding a layer of complexity to the asset forfeiture proceedings initiated by U.S. prosecutors.

A filing from the Department of Justice on Wednesday highlighted a forfeiture bill, singling out a Bombardier Global and an Embraer Legacy as assets potentially subject to confiscation from Bankman-Fried's portfolio.

Currently entangled in a criminal trial in New York, Bankman-Fried faces charges of fraud and conspiracy, stemming from the collapse of his cryptocurrency exchange, FTX, in November 2022. Maintaining his innocence, he has entered a plea of not guilty.

Flight tracking data indicates that both aircraft are categorized under "private" ownership. Nevertheless, a dispute over ownership rights has arisen between the DOJ and FTX, a contention underscored in a court filing dated September 21. This filing was submitted in the context of bankruptcy proceedings for Bankman-Fried's former company, with the aim of recovering funds for the benefit of creditors.

Island Air Capital (IAC), in their filing, articulated, "The Government has taken the position that both aircraft are subject to forfeiture as property purchased with the proceeds of fraud." In contrast, FTX asserts ownership based on the argument that the alleged loans utilized for the aircraft purchases were not formally documented.

As the dispute navigates the legal process, IAC is seeking clarification on the party responsible for covering the costs associated with ongoing maintenance and inspections. Notably, it was revealed that in practice, none of the individuals associated with FTX ever made use of either aircraft, as they were still undergoing upgrades at the time of the company's bankruptcy filing.

The Embraer was initially acquired by IAC for $12.5 million, while the Bombardier was secured for $15.9 million, with funding provided by FTX. This financial arrangement was detailed in the filing, which outlined an unsecured, interest-free loan established through a "handshake deal" between Bankman-Fried and the owner of IAC, Paul Aranha.

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