Shortly before Christmas, FTX founder Samuel Bankman-Fried, indicted on federal charges of fraud and money laundering, was released on a $250-million bail bond that was secured by his parents’ Palo Alto-area home.
The dimensions of the bail bond — 25 times greater than Bernie Madoff’s — garnered considerable attention. The prosecution termed it “the biggest ever pretrial bond.” What hasn’t drawn notice is the proven fact that Joseph Bankman and Barbara Fried, who’re professors at Stanford Law School, aren’t typical homeowners. Their property is a school home on the Stanford campus itself. Stanford owns the land, and Bankman and Fried lease it.
Although the couple told the court that the five-bedroom, 3,000-square-foot house is value $3.55 million, the restrictions that include owning a house on Stanford property make it difficult to gauge its market value via conventional means. Were Bankman and Fried ever to sell their house — or were the federal government to take possession of it, within the event of a bail violation, after which need to sell it — the pool of potential buyers can be limited to other eligible Stanford faculty. Regardless of the scenario, a sale would need to undergo Stanford.
It’s a curious circumstance that underscores the wide latitude granted in bail proceedings to wealthy, white defendants, in sharp contrast to the unforgiving terms that always keep poor people of color behind bars while they await trial.
“Prosecutors treat these white-collar cases totally in another way than other cases,” said Alison Siegler, a University of Chicago Law School professor. “There’s a scarcity of equity in all of this.”
While using a Stanford faculty home to secure bail could also be unusual, the arrangement is perfectly legal. Likewise, there’s nothing unorthodox in the dimensions of a bail bond greatly exceeding the worth of the assets used to secure it. The $250-million figure ascribed to Bankman-Fried’s bond, experts said, was essentially just an arbitrary number.
“The goal is admittedly for the parents to do every thing possible to place themselves on the road,” said Columbia University Law School professor Daniel Richman. Putting up the family home for bail is a option to secure the commitment of individuals near Bankman-Fried who will help make sure that he doesn’t flee, said Richman, a former federal prosecutor. “It’s almost symbolic within the sense that they’re taking their most useful asset and pledging it.”
Stanford has greater than 800 on-campus faculty homes. Only Stanford faculty members should buy them.
University publications explain faculty homes this fashion: Stanford faculty may “purchase a leasehold interest.” Buyers sign a “ground lease” with the university, after which faculty members pay rent to Stanford and are answerable for paying all property taxes.
The arrangement is so complicated and arcane that the Santa Clara County assessor has an entire page dedicated to Stanford faculty housing.
This unique structure dates to the university’s founding by Leland and Jane Stanford.
“Since the Founding Grant stipulates that campus land can’t be sold, those that buy a house on campus only lease the land beneath it,” explained Stanford Magazine. Based on the 2005 article, creator David Leavitt grew up in the identical house as Bankman-Fried and wrote a novel inspired by the “inheritance quandary” of on-campus faculty housing.
A Stanford faculty housing brochure explains, “The Stanfords’ intention was to be sure that the land endowment to the University would exist in perpetuity.”
The goal of campus housing, the brochure notes, is “fostering an educational community in residence.”
As with many universities, faculty housing plays prominently in Stanford’s recruitment efforts. Prospective faculty members face a move to Palo Alto, where the common home price is $3.5 million, in accordance with Zillow. Current Stanford faculty homes on the market include a four-bedroom, three-bathroom property for $1,962,500 and a two-bedroom, two-bathroom property for $870,000.
“Nobody could afford a house in Palo Alto but for these arrangements,” said Richman, the Columbia professor. “Stanford, as a part of its effort to lure them, gives them a perk of the job.”
Bankman and Fried signed their 51-year lease with Stanford in 1991. A source accustomed to the bail arrangement said that Bankman and Fried made the varsity aware of the usage of the home as collateral.
A representative for Stanford said the university’s permission was not needed to make use of the home for bail.
“Under the terms of their ground lease with the university, Joseph Bankman and Barbara Fried have the proper to make use of their leasehold interest as collateral for the bond, just as they’ll encumber their leasehold interest with a mortgage. Neither situation requires approval from the university,” Dee Mostofi, assistant vice chairman for external communications, said in an announcement. “Accordingly, the university didn’t give approval for Joseph Bankman and Barbara Fried to make use of their leasehold interest as collateral for the bond as no approval was required under their ground lease.”
Stanford didn’t reply to a request for a duplicate of the lease agreement.
A representative for Bankman-Fried declined to comment.
Under federal law, defendants are presumed innocent, and pretrial release is alleged to be the usual. But in practice, the overwhelming majority don’t go home to their families. In 2019, 75% of federal defendants were detained awaiting their trials, in accordance with data from the federal courts.
In “Freedom Denied,” a recent report lead by Siegler, the University of Chicago professor, court-watchers found that judges were routinely unlawfully jailing poor people and imposing excessive financial conditions, with people of color significantly more prone to be jailed unlawfully on money bails that they might not afford.
Sam Bankman-Fried leaves federal court in Latest York on Jan. 3 after pleading not guilty to charges of fraud and money laundering.
(Anadolu Agency)
Under the federal Bail Reform Act of 1984, jailing people before a trial is alleged to be the exception, used only to make sure community safety and that defendants appear in court. But within the a long time since, pre-trial detention rates have skyrocketed.
Siegler points to what she terms a “culture of detention” through which prosecutors ask for pretrial detention as a matter in fact, and judges grant it without query, in accordance with her research.
But, within the Bankman-Fried bail hearing, Siegler noted that the prosecution took a really different approach. The federal government said Bankman-Fried had agreed to extradition from the Bahamas, had “family and community ties” and that risk to the community wasn’t a priority.
“That is an insane transcript to read since the argument the federal government is making is usually the type of argument the defense can be making,” Siegler said. “Here, the prosecution is advocating to the judge to let this guy out pending trial. Often, they’re advocating just the alternative.”
From the transcript, Siegler noted that it appeared that Bankman-Fried’s lawyers likely negotiated with the federal government to conform to extradition in exchange for pretrial release in a bail package.
Along with the family home, Bankman-Fried’s bail package included hard money: Two people whose names are under seal paid $500,000 and $200,000, respectively, to secure his release.
While Bankman-Fried had a legal team to handle high-level bail negotiations, by comparison, greater than 90% of federal defendants can’t afford an attorney, in accordance with a 2017 judicial report. Moreover, greater than 1 / 4 of the nation’s district courts don’t be sure that persons are represented at their first court appearance, in accordance with “Freedom Denied.”
Bankman-Fried’s trial is to start in October. Meanwhile, the terms of his bail require, amongst other things, that he give up his passport, wear an electronic monitoring device and remain at his parents’ home. A far cry from federal detention, he will probably be confined to a five-bedroom, three-bathroom house that’s just over 3,000 square feet on nearly an acre lot with a pool and a hot tub, records show.
Bankman-Fried’s bail agreement is analogous to — if no more restrictive than — that of Madoff, the financier who was accused of operating a $50-billion Ponzi scheme and received a 150-year sentence after being convicted of fraud and other crimes. Released on bail, Madoff had a nightly curfew but was free to travel in the course of the day throughout Connecticut, southern Latest York and Long Island, in accordance with the Latest York Times. Madoff secured his release using homes that were in his wife’s name.
If Bankman-Fried were to flee, the federal government could take his parents’ house. “What they’d be getting is ownership of the home. And never of the land,” said Richman, the Columbia professor. The federal government would then need to work with Stanford to sell the home to a buyer who met Stanford’s eligibility criteria, Richman said.
In a Jan. 4 filing, Bankman and Fried told the court that the equity interest of their home was $3.55 million, they usually guaranteed that they’d personally pay that quantity if their son violated the terms of his bond.
Currently, greater than 100,000 people remain in federal detention awaiting trial. Based on Department of Justice data, 99% of individuals charged with a federal crime and released pretrial show up in court, and 98% don’t commit crimes.
“It’s so rare that anybody doesn’t comply with these conditions after they’re given the possibility to be released and return to their family,” Siegler said.
Bankman-Fried, within the words of prosecutors, “perpetrated a fraud of epic proportions, stealing billions of dollars.”
“If we’re comfortable releasing any person accused of against the law of this magnitude,” Siegler said, “that ought to really make us query why we’re locking so many individuals in jail pending trial who’re accused of far less serious crimes.”
Times staff author Adam Elmahrek contributed to this report.
Shortly before Christmas, FTX founder Samuel Bankman-Fried, indicted on federal charges of fraud and money laundering, was released on a $250-million bail bond that was secured by his parents’ Palo Alto-area home.
The dimensions of the bail bond — 25 times greater than Bernie Madoff’s — garnered considerable attention. The prosecution termed it “the biggest ever pretrial bond.” What hasn’t drawn notice is the proven fact that Joseph Bankman and Barbara Fried, who’re professors at Stanford Law School, aren’t typical homeowners. Their property is a school home on the Stanford campus itself. Stanford owns the land, and Bankman and Fried lease it.
Although the couple told the court that the five-bedroom, 3,000-square-foot house is value $3.55 million, the restrictions that include owning a house on Stanford property make it difficult to gauge its market value via conventional means. Were Bankman and Fried ever to sell their house — or were the federal government to take possession of it, within the event of a bail violation, after which need to sell it — the pool of potential buyers can be limited to other eligible Stanford faculty. Regardless of the scenario, a sale would need to undergo Stanford.
It’s a curious circumstance that underscores the wide latitude granted in bail proceedings to wealthy, white defendants, in sharp contrast to the unforgiving terms that always keep poor people of color behind bars while they await trial.
“Prosecutors treat these white-collar cases totally in another way than other cases,” said Alison Siegler, a University of Chicago Law School professor. “There’s a scarcity of equity in all of this.”
While using a Stanford faculty home to secure bail could also be unusual, the arrangement is perfectly legal. Likewise, there’s nothing unorthodox in the dimensions of a bail bond greatly exceeding the worth of the assets used to secure it. The $250-million figure ascribed to Bankman-Fried’s bond, experts said, was essentially just an arbitrary number.
“The goal is admittedly for the parents to do every thing possible to place themselves on the road,” said Columbia University Law School professor Daniel Richman. Putting up the family home for bail is a option to secure the commitment of individuals near Bankman-Fried who will help make sure that he doesn’t flee, said Richman, a former federal prosecutor. “It’s almost symbolic within the sense that they’re taking their most useful asset and pledging it.”
Stanford has greater than 800 on-campus faculty homes. Only Stanford faculty members should buy them.
University publications explain faculty homes this fashion: Stanford faculty may “purchase a leasehold interest.” Buyers sign a “ground lease” with the university, after which faculty members pay rent to Stanford and are answerable for paying all property taxes.
The arrangement is so complicated and arcane that the Santa Clara County assessor has an entire page dedicated to Stanford faculty housing.
This unique structure dates to the university’s founding by Leland and Jane Stanford.
“Since the Founding Grant stipulates that campus land can’t be sold, those that buy a house on campus only lease the land beneath it,” explained Stanford Magazine. Based on the 2005 article, creator David Leavitt grew up in the identical house as Bankman-Fried and wrote a novel inspired by the “inheritance quandary” of on-campus faculty housing.
A Stanford faculty housing brochure explains, “The Stanfords’ intention was to be sure that the land endowment to the University would exist in perpetuity.”
The goal of campus housing, the brochure notes, is “fostering an educational community in residence.”
As with many universities, faculty housing plays prominently in Stanford’s recruitment efforts. Prospective faculty members face a move to Palo Alto, where the common home price is $3.5 million, in accordance with Zillow. Current Stanford faculty homes on the market include a four-bedroom, three-bathroom property for $1,962,500 and a two-bedroom, two-bathroom property for $870,000.
“Nobody could afford a house in Palo Alto but for these arrangements,” said Richman, the Columbia professor. “Stanford, as a part of its effort to lure them, gives them a perk of the job.”
Bankman and Fried signed their 51-year lease with Stanford in 1991. A source accustomed to the bail arrangement said that Bankman and Fried made the varsity aware of the usage of the home as collateral.
A representative for Stanford said the university’s permission was not needed to make use of the home for bail.
“Under the terms of their ground lease with the university, Joseph Bankman and Barbara Fried have the proper to make use of their leasehold interest as collateral for the bond, just as they’ll encumber their leasehold interest with a mortgage. Neither situation requires approval from the university,” Dee Mostofi, assistant vice chairman for external communications, said in an announcement. “Accordingly, the university didn’t give approval for Joseph Bankman and Barbara Fried to make use of their leasehold interest as collateral for the bond as no approval was required under their ground lease.”
Stanford didn’t reply to a request for a duplicate of the lease agreement.
A representative for Bankman-Fried declined to comment.
Under federal law, defendants are presumed innocent, and pretrial release is alleged to be the usual. But in practice, the overwhelming majority don’t go home to their families. In 2019, 75% of federal defendants were detained awaiting their trials, in accordance with data from the federal courts.
In “Freedom Denied,” a recent report lead by Siegler, the University of Chicago professor, court-watchers found that judges were routinely unlawfully jailing poor people and imposing excessive financial conditions, with people of color significantly more prone to be jailed unlawfully on money bails that they might not afford.
Sam Bankman-Fried leaves federal court in Latest York on Jan. 3 after pleading not guilty to charges of fraud and money laundering.
(Anadolu Agency)
Under the federal Bail Reform Act of 1984, jailing people before a trial is alleged to be the exception, used only to make sure community safety and that defendants appear in court. But within the a long time since, pre-trial detention rates have skyrocketed.
Siegler points to what she terms a “culture of detention” through which prosecutors ask for pretrial detention as a matter in fact, and judges grant it without query, in accordance with her research.
But, within the Bankman-Fried bail hearing, Siegler noted that the prosecution took a really different approach. The federal government said Bankman-Fried had agreed to extradition from the Bahamas, had “family and community ties” and that risk to the community wasn’t a priority.
“That is an insane transcript to read since the argument the federal government is making is usually the type of argument the defense can be making,” Siegler said. “Here, the prosecution is advocating to the judge to let this guy out pending trial. Often, they’re advocating just the alternative.”
From the transcript, Siegler noted that it appeared that Bankman-Fried’s lawyers likely negotiated with the federal government to conform to extradition in exchange for pretrial release in a bail package.
Along with the family home, Bankman-Fried’s bail package included hard money: Two people whose names are under seal paid $500,000 and $200,000, respectively, to secure his release.
While Bankman-Fried had a legal team to handle high-level bail negotiations, by comparison, greater than 90% of federal defendants can’t afford an attorney, in accordance with a 2017 judicial report. Moreover, greater than 1 / 4 of the nation’s district courts don’t be sure that persons are represented at their first court appearance, in accordance with “Freedom Denied.”
Bankman-Fried’s trial is to start in October. Meanwhile, the terms of his bail require, amongst other things, that he give up his passport, wear an electronic monitoring device and remain at his parents’ home. A far cry from federal detention, he will probably be confined to a five-bedroom, three-bathroom house that’s just over 3,000 square feet on nearly an acre lot with a pool and a hot tub, records show.
Bankman-Fried’s bail agreement is analogous to — if no more restrictive than — that of Madoff, the financier who was accused of operating a $50-billion Ponzi scheme and received a 150-year sentence after being convicted of fraud and other crimes. Released on bail, Madoff had a nightly curfew but was free to travel in the course of the day throughout Connecticut, southern Latest York and Long Island, in accordance with the Latest York Times. Madoff secured his release using homes that were in his wife’s name.
If Bankman-Fried were to flee, the federal government could take his parents’ house. “What they’d be getting is ownership of the home. And never of the land,” said Richman, the Columbia professor. The federal government would then need to work with Stanford to sell the home to a buyer who met Stanford’s eligibility criteria, Richman said.
In a Jan. 4 filing, Bankman and Fried told the court that the equity interest of their home was $3.55 million, they usually guaranteed that they’d personally pay that quantity if their son violated the terms of his bond.
Currently, greater than 100,000 people remain in federal detention awaiting trial. Based on Department of Justice data, 99% of individuals charged with a federal crime and released pretrial show up in court, and 98% don’t commit crimes.
“It’s so rare that anybody doesn’t comply with these conditions after they’re given the possibility to be released and return to their family,” Siegler said.
Bankman-Fried, within the words of prosecutors, “perpetrated a fraud of epic proportions, stealing billions of dollars.”
“If we’re comfortable releasing any person accused of against the law of this magnitude,” Siegler said, “that ought to really make us query why we’re locking so many individuals in jail pending trial who’re accused of far less serious crimes.”
Times staff author Adam Elmahrek contributed to this report.
