While watching media and paparazzi storm fallen FTX founder Sam Bankman-Fried outside a New York City courthouse, Bernie Madoff’s former lawyer was feeling "deja vu all over again."
"I've been there, done that," Ira Lee Sorkin, the attorney who represented Madoff during his Ponzi scheme trial, said in an exclusive interview on "The Claman Countdown" Thursday. "When the scope of the Madoff fraud developed, it became a circus. . . . There were cameras all over the place, satellite dishes, even ABC News, from what I understand, rented a place across the street with a camera that could look right into his penthouse. So there was no way that he was going to skip. And there doesn't seem to be a way that Mr. [Bankman-Fried] was going to skip."
A New York judge ruled Thursday that Bankman-Fried can post a $250 million bond and live in his parents' home in California as he awaits trial on fraud charges.
Authorities arrested the disgraced crypto exchange founder in the Bahamas earlier in the month. He has since been hit with multiple charges from the Southern District of New York and the Securities and Exchange Commission.
The charges Bankman-Fried faces in the U.S. include conspiracy to commit wire fraud, wire fraud, conspiracy to commit commodities fraud, conspiracy to commit securities fraud, conspiracy to commit money laundering, and conspiracy to defraud the Federal Election Commission and commit campaign finance violations, the Department of Justice says.
FTX founder Sam Bankman-Fried leaves following his arraignment in New York City on December 22, 2022. New York judge Gabriel Gorenstein ordered Bankman-Fried be released on $250 million bail. (Getty Images)
It’s estimated that $1.8 billion of FTX investors’ assets were lost at the hands of Bankman-Fried. Sorkin explained why the disgraced crypto kingpin is receiving a more "restrictive" bail, when Madoff was released on a $10 million bond while responsible for $20 billion in real losses.
"The scope of the Bernie Madoff case was not as well known as it is for this kid. That's the difference," Sorkin told host Liz Claman. "And the government walked into it very quickly, in this particular case. They had cooperators. There were no cooperators in Madoff. The government didn't know, as I said, the scope of the Madoff fraud."
Just weeks after FTX’s collapse, Bankman-Fried appeared virtually for The New York Times’ DealBook summit, where he admitted to making "a lot of mistakes," and insisted he "didn’t ever try to commit fraud on anyone."
Sorkin gave Bankman-Fried some stern legal advice.
"Shut up. Don't talk. And whatever advice he got was bad advice, to go out and try to say, ‘I didn't intend it,’" Sorkin said. "The real issue is the government had cooperators before the indictment came down, because the indictment alleges a series of conspiracies. You can't conspire with yourself. There has to be at least two people. So when his indictment came down, it said numerous conspiracies, which means there were other people involved."
"The government will charge them as well," the attorney continued. "And quite frankly, the number of conspiracies and the substantive counts of mail fraud, wire fraud, money laundering and so on are going to add up to a lot of exposure for him."
In a press conference on Wednesday, U.S. attorney for the Southern District of New York Damian Williams called on anyone who participated in misconduct at FTX or sister firm Alameda Research to come forward and "get ahead of it."
FTX investor and digital marketing strategist Darragh Grove-White argues while Sam Bankman-Fried entered the market as a crypto pioneer, his ‘altruism’ got the best of him.
Sorkin expressed his belief that more executives could be indicted, speculating that the very "detailed" SEC complaint indicates the investigation into FTX started before its ultimate downfall.
"Someone had, as we say in this business, ‘ratted him out,’ someone had gone to the government, blew the whistle, began to talk about him and FTX," Sorkin explained. "The SEC put this together and gave it to the U.S. attorney, and the U.S. attorney now then takes it and makes a criminal case out of it."
Bankman-Fried’s former girlfriend and CEO of Alameda, Caroline Ellison, already plead guilty to fraud charges in FTX’s collapse and will likely receive jail time, Sorkin predicted.
"She just didn't walk into court and plead guilty," the attorney said. "She had negotiations on behalf of her by the lawyer and the U.S. attorney to set up a cooperation agreement where she would cooperate, she would plead guilty to one or more counts, she'd be exposed to a certain number of years in prison."
Bankman-Fried’s public excuses that he made mistakes and didn’t know what was happening, "are just not true," Sorkin argued.
Former assistant U.S. attorney Andy McCarthy weighs in on FTX founder Sam Bankman-Fried posting $250 million bond and former Alameda CEO and FTX co-founder cooperating with federal officials on ‘Fox Business Tonight.’
"It's conscious avoidance and willful blindness where you simply close your eyes to over a two-year period," he said. "It's very difficult to argue that I was willfully blind and I consciously avoided this. This went on for a couple of years. He's got a problem and it's going to be a serious sentence."
Ira Lee Sorkin is a Mintz & Gold attorney with a specialization in white-collar criminal defense, SEC enforcement and other regulatory proceedings. Sorkin has represented Fox News Media and Fox Corporation on a variety of matters.
FOX Business’ Greg Norman contributed to this report.