Caroline Ellison: A woman with agency or a helpless pawn?
Former Alameda Research CEO Caroline Ellison has been sentenced to two years in prison for her role in the massive fraud at FTX. She will also serve three years supervised release, and she was ordered to forfeit $11 billion. I think it’s worth unpacking this sentencing decision a bit, because it came as a surprise to many. Some were surprised that she would receive such a short sentence for her central role in such a massive crime, while others were surprised to see her receive any prison time after prosecutors seemed to support a non-custodial sentence.
I’ve also seen some confusion around the $11 billion restitution order, namely surprise that Ellison had $11 billion to forfeit. That’s an easy one to clear up, so I’ll tackle it first. She does not have $11 billion. This order was merely communicating that Ellison and the other co-conspirators must forfeit all proceeds of the crime, and $11 billion was the total amount deemed to be “proceeds traceable to the offenses” committed by Bankman-Fried, Ellison, and the other defendants.
As I mentioned in a recent issue, the probation department had recommended Ellison be sentenced to no jail time at all [I67]. When determining a sentencing recommendation, the probation department considers what the sentencing guidelines dictate: a rather complex bit of analysis to determine a numerical offense level, which is then combined with the criminal history of the offender to suggest a duration of imprisonment. These guidelines are intended to provide some degree of consistency, so that people receive roughly similar sentences for similar crimes, regardless of the judge they wind up in front of.
