The First Step Act may not apply to SBF or Ryan Salame
While Protos, along with other media outlets, was quick to point out that the Donald Trump-era law the ‘First Step Act’ could be a road to early release for Sam Bankman-Fried, Ryan Salame, and other first-time, nonviolent offenders, it turns out that the law is less about ‘the letter of the law’ than it is about a judge’s discretion.
Indeed, if we take a look at a previous example of a massive financial fraudster attempting to use the act to get early release, it seems incredibly unlikely that Bankman-Fried or Salame can expect to have a significant amount of time shaved off their sentences.
What is the First Step Act?
Though it’s been repeatedly discussed, it’s worth going over some of the minutiae of the First Step Act. The main point of contention regarding the act is that inmates can, possibly, get out of prison in half of the time they’ve been sentenced to. However, it’s important to note that there are many caveats.
First of all, while a former federal prosecutor told CNN that Bankman-Fried could possibly shave 12.5 years off his sentence, it’s simply not clear that’s true. Buried within the details of the bill is a section that describes ineligible prisoners, specifically “Section 1030(a)(1), relating to fraud and related activity in connection with computers.”
Bankman-Fried was found guilty of wire fraud, securities fraud, and commodities fraud, all seemingly revolving around computers and his trading.
This doesn’t mean that he can’t take any time off his sentence whatsoever: federal prisoners are still eligible to take off over 50 days a year if they involve themselves with programs to reduce recidivism and don’t cause problems while incarcerated. In this sense, Bankman-Fried will likely be able to knock a few years off of his 25-year sentence.
No matter how you look at it, a major factor will be whether or not a judge believes at some point that Bankman-Fried has repented for his actions, served enough time in prison, and is no longer a threat to society. It remains to be seen if or when this metric will be met.
Read more: Ryan Salame is whitewashing his role at FTX and Alameda
Bad news for Bankman-Fried and Salame
On that note, the outlook for both felons seems less than optimistic. Bankman-Fried is guilty of one of the largest frauds in history and Salame, as he’s stated on X (formerly Twitter) himself, is charged with the “largest case of campaign finance fraud in American history.” These are prime examples of when individual cases can be used to prove a point to the public at large.
Similar to Bankman-Fried, Samuel Israel III led a massive financial fraud, bilking investors out of $450 million in the late 1990s. After serving 11 years of a 22-year sentence, Israel attempted to utilize the First Step Act to get early release in 2019.
Unfortunately for him, this request was denied, with the judge saying “It would make a mockery of the sentencing statute if this financial fraudster, who ruined the lives and finances of hundreds of people while living the high life of an ostensibly successful hedge fund manager, were to have his sentence reduced.”
With that in mind, it’s difficult to imagine that either Bankman-Fried or Salame would see a dramatic reduction in their sentences.
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