'Outstanding Cooperation': Feds Seek Leniency in Sentencing for Ex-FTX Executive Gary Wang
As part of his ongoing cooperation, prosecutors say Wang has built software that will help the DOJ detect fraud.
November 14, 2024 at 05:04 PM
3 minute read
Federal prosecutors are urging a judge for leniency at the upcoming sentencing of a former FTX executive—noting he’s built the Justice Department a tool that will help them uncover fraud.
Assistant U.S. Attorneys with the Southern District of New York revealed the software in a submission ahead of Gary Wang's sentencing, scheduled for next week.
"The tool has sufficient potential value to the government," Assistant U.S. Attorney Nicholas Roos wrote in a submission to U.S. District Court Judge Lewis Kaplan of the SDNY. "Wang's willingness to use his skills proactively, to help detect other criminal activity in financial markets, distinguishes his cooperation."
Wang wrote code that enabled his ex-boss Sam Bankman-Fried to defraud customers of the crypto-exchange out of billions of dollars and later testified against him at trial. Bankman-fried was convicted and is serving a 25-year prison sentence.
Wang was the first co-conspirator to begin cooperating with the government and the first FTX employee interviewed by the U.S. Attorney’s Office, prosecutors stated.
During their first meeting, he voluntarily surrendered electronics that provided data and internal company communications, including encrypted messaging.
At the time of that interview, prosecutors did not have the evidence to charge Wang, they said—he inculpated himself.
He later pleaded guilty to conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud and conspiracy to commit securities fraud.
“Without Wang’s early acceptance of responsibility, the Government would not have been able to bring charges against Bankman-Fried, Wang, or any co-conspirators with the speed and efficiency that it did,” the filing says.
Beyond his assistance in the prosecution of his former boss, Wang has offered to testify in two other cases and met with investigators to help analyze FYX’s databases for evidence of fraud by third parties.
Detailed information about the fraud-detection tool Wang built is redacted, but prosecutors said the tool has “significant potential value” to the U.S. Government.
“By using principles that Wang developed at FTX for know-your-customer due diligence and improper trading detection, Wang has built an interface that the Government has begun using for detecting potential fraud by publicly traded companies,” prosecutors told the judge. “Wang has also been working on a tool for detection of potential illegal activity in cryptocurrency markets, which in the event Wang is sentenced to a period of time served, the Government understands he will complete as part of his ongoing cooperation.”
Wang's own lawyers with Fried, Frank, Harris, Shriver & Jacobson have asked for a sentence of time served.
He is the last defendant in Bankman-Fried’s inner circle to face sentencing. Fellow cooperators Caroline Ellison and Nishad Singh were sentenced to 2 years in prison and time served, respectively.
Sentencing is scheduled for Nov. 20.
Read the filing:
https://static.alm.production.k2.m1.brightspot.cloud/1e/97/7cec58634bd5bdf2e4353376a40e/wang-sentencing-memo.pdf
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