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Will former cryptocurrency tycoon Ryan Salame face jail time? | Crime
UPDATE: Sandisfield native Ryan Salame sentenced to 7 1/2 years in prison
LENOX — Fallen crypto executive Ryan Salame faces a probable prison sentence when he will be sentenced Tuesday in federal court in Manhattan.
How much prison time will the former Lenox restaurateur and real estate investor face? He will fall to Judge Lewis Kaplan, who will preside and decide as he hears sentencing recommendations from the U.S. Attorney’s Office and Salame’s attorneys.
The former executive of Bahamas-based FTX Digital and its Alameda Research hedge fund could get five to seven years, as proposed in a 30-page sentencing document filed by prosecutors with the court early last week.
The Sandisfield native was involved serious financial and political conduct this led to guilty pleas. The charges include operating a more than $1 billion money transmitting business without a license and making more than $100 million in illegal campaign contributions, one of the largest ever in U.S. history, mostly to candidates Republicans in the United States Congress in 2022.
According to a May 21 court filing by Damian Williams, U.S. Attorney for the Southern District of New York, due to the severity of Salame’s crimes, he should be punished with a significant prison sentence.
Williams argued that a tough sentence would ensure justice and serve as a future deterrent to illegal cryptocurrency machinations, while promoting compliance with the law.
Williams cited Salame’s close and loyal working relationship with Sam Bankman-Fried, the founder of FTX and Alameda, who was sentenced to 25 years in federal prison on April 1 and is planning an appeal.
But in his proposed sentence filed on May 14, Salame’s defense tries a lenient period of no more than 18 months behind bars. They noted his plea agreement with prosecutors and that he was considered by many to be “an outstanding member of the community.”
The defense court document also notes that Salame allegedly missed important milestones for his children and stepchildren and cites his philanthropy and community service, including activities before he became an executive at FTX and Alameda.
“He was a good man who did much good in this world, who conspired to commit two crimes while in thrall to a criminal leader,” Salame’s lawyers wrote, referring to Bankman-Fried. They also mentioned his “genuine remorse, efforts to address his substance abuse issues, and the significant personal and financial losses he has already suffered as a result of the exchange collapse.”
“He had absolutely no knowledge that the four individuals in downtown Alameda and FTX had conspired to lie and steal from their clients,” defense attorneys said in the court filing. “Ryan didn’t steal from anyone. He didn’t lie to customers. He was deceived. When he finally figured out the FTX fraud, he was the first person to report it to the Bahamian authorities.”
They also wrote that Salame’s involvement with FTX will cloud any future career prospects. “As is true of thousands of other FTX employees, customers, investors and financiers, Ryan lost years of hard work and nearly all of his net worth almost instantly,” the defense court filing said. “Ryan, who was not part of Sam Bankman-Fried’s inner circle, was unaware of the crimes at the center of this case.”
But Williams called the defendant’s requested 18-month sentence “too lenient” and the reasons for leniency “inadequate.”
The U.S. attorney described Salame’s cooperation with prosecutors as “relatively minor” and informal as he refused to meet with prosecutors or testify at the Bankman-Fried trial; instead he provided information, including various documents requested by the government.
“None of the information led to any major investigative leads, arrests, or charges,” Williams wrote.
The prosecutor’s document states that “it is logical that he should face a longer sentence than offenders whose crimes involved significantly smaller amounts of money, which poses fewer risks to the financial system and a lower possibility that illicit contributions could influence elections and thus distort legislation.”
At least $10 billion in customer investments in cryptocurrency exchange FTX were lost, leading the company to file for bankruptcy in November 2022. Attorney John J. Ray III, a Pittsfield native who was appointed head of the company after the filing, said recovered much of that money and signaled that investors will be compensated, plus interest.
Since March, after tgovernment seizure Last fall Salame’s main asset, the Olde Heritage Tavern in Lenox plus two nearby residential properties and his Porsche sports car, sold his remaining Lenox assets and real estate holdings, which brought in $5.4 million dollars.
But its private Triumph Airport in North Canaan, Connecticut, remains on the market with an asking price of $2 million.
Salame owes the U.S. government approximately $11.6 million in assets for part of the refund to defrauded FTX customers and other penalties, including fines. While awaiting Tuesday’s sentencing, which was postponed from two earlier dates this spring, he is free on $1 million bail.