Judging Sam: The Sentencing

Michael Lewis

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Michael Lewis

I'm Michael Lewis. This is judging Sam. It's Thursday, March 28. My producer Lydia Jean and I are standing outside the federal courthouse where Sam Batonfree was just sentenced to 25 years in jail. So what we can talk about in this more when we were back in, you know, but I'm curious what it was like in the.

I wasn't in the courtroom. You were in the courtroom? Yeah. What was it like in there? Um, I mean, it was really, it was very full.

Lydia Jean Kott

One of the fullest days in the courtroom. Is there any obvious emotion? I mean, Sam Bankman Fried's parents were at some point, they had their heads right up next to each other. And when Sam Bankman Fried came out, what struck me was, you know, he was really pale. His hair was totally wild, and you could hear the clanking of the trees.

Michael Lewis

You could hear the clanking of the chains. He was. And he was holding his hands behind him as if he were handcuffed. And I thought, oh, that's just coincidental, though. He wasn't handcuffed, but when he got up to leave, he put his hands right behind him as if he were handcuffed again.

And I suspect what happened was they just had a deal. You just look like you're handcuffed, and we won't put the handcuffs on you. Wow. I didn't. That's a.

Lydia Jean Kott

That's a good eye. What did you think? And Sam Eggmanfried actually spoke. What did you think about what he said? I think he went on too long, but I.

Michael Lewis

And I. I think that he was sort of relitigating it and trying to say the things he didn't say when he was on the stand. None of it mattered from the point of the sentence. The sentence was established where any of those people got up and spoke. So you kind of wonder, what's all this?

All theater? So what we watched was theater. We could have just come and just had the judge read the sentence. But the nothing that happened affected the sentence. But did it affect my perception?

It just increased my perception that Sam is his own worst enemy. I mean, he gets up, and the one thing he could do that would make it would undermine the judge's view of him. Negative view of him would be to express remorse. And the judge didn't hear any remorse. He did sort of respect.

He expressed. He was displeased that it had all happened. He was displeased that everything happened. Yes, but it was not a whole lot more than that. So it surprised me that he.

I mean, he was playing not to the judge, he was playing to the media and trying to get his version of events out. And the judge responded by saying, I can see what you're gonna do if I let you out too soon. You're gonna get this version of events out. And the fact is that there's some truth in his version of events. It's not like the truth is all on one side here.

It's messy. And I'm just kind of. I'm trying to imagine what's rattling around in the judge's mind, given his previous decisions. One of the things rattling around his mina, I bet, was the line in Barbara Fried's letter to him that I'll never see my son out of jail. And I think some little part of him wanted to give her at least hope.

Lydia Jean Kott

And I noticed that he also asked for him to be in prison in. San Francisco, in the Bay Area. I think he was singing about the parents a little bit. Yeah.

Michael Lewis

I also felt like he read my book. I was thinking the same thing when he was talking about Jane street. That's exactly right. That it all grew out of Jane street, because that is true. I mean, this.

The way of this confirmation of his approach to life, it only really starts in Jane street. It was funny to me that he sort of implicated James street in that. I thought he was doing that a little bit because he disapproves of this worldview. And this worldview. This worldview was the worldview of Jane street.

Lydia Jean Kott

The idea of expected value. Yeah. Which isn't necessarily a bad worldview, but it's. But it bothers the judge anyway. Well, this is what happens when you replace principles with probabilities.

Michael Lewis

Judges get pissed. Right? Excuse me. Sorry I can't be by the door. I'm sorry, my love, for some consciousness.

Rebecca Mermelstein

I didn't hurt you, did I? We're outside of a door of a federal building has just arrived for the security guard.

Lydia Jean Kott

So it's about an hour after Sam Mankman Fried's sentencing. Michael Lewis and I are back in the studio, and we're joined by Rebecca Murmelstein. She is a former federal prosecutor at the Southern District of New York, which is the office that prosecuted Sam. And she's a partner at the law firm O'Malvinnean Myers. Hi, Rebecca.

Rebecca Mermelstein

Hi, guys. So, I'm gonna start us off. Rebecca, I saw there are several things that were just bewildering to me, and can I just take them one by one, and maybe you can help explain them to me? One is the judge obviously comes in with the sentence on a piece of paper. He's already decided what the sentence is.

Michael Lewis

It would take, in theory, about 45 seconds to deliver the sentence. Instead, there was two plus hours of theater where Sam's lawyer got up, the prosecution got up. Someone, a victim got up and spoke. Sam Bankman freed delivered a long and rambling statement from his feet. I mean, one thing after another happened that none of which could conceivably influence the sentence.

And I'm wondering, what is it all for? Like, what was. What did I just watch? I would start by rejecting the premise that it was preordained, that it was on a piece of paper, and that it was all theater. Although I.

Rebecca Mermelstein

I know what you mean. I have seen judges actually, after the substantive presentation of a sentencing is complete, the prosecution has spoke. The defense has spoke. The defendant has spoken. I've seen judges leave the courtroom and go back to their chambers to give it some thought before imposing sentence.

So I don't think it's just theater. Now, having said that, of course, this is a case where the judge knows a lot about the case before the sentencing starts. He presided over the trial. The parties each filed written submissions. I think the government says, like 120 pages.

The defense is 80 something pages. So the information was already there. And I don't disagree with you that it is unlikely that anything said in the courtroom itself by the defendant, by the lawyers, is going to change where the judge comes out. And that the judge was already sort of largely decided on 25 years before he came out and that nothing he heard changed it. So.

So why do we do it? I think is, is your question, some of it is legally required. There are rules, for example, right, that allow victims the right to be heard at sentencing, that allow defendants the right to be heard at sentencing. Judges sometimes do have questions for the parties about underlying facts, about the disagreements about the sentencing guidelines. So I don't think it's a, a waste of time or just political or legal theater, but I don't disagree with you that Judge Kaplan, you know, he.

Michael Lewis

Knew it was going, because when it came time to sentence, he said, wait, I lost the piece of paper. And he goes, so he had to go find his piece of paper with the sentence on it. So we know there was a piece of paper and he'd already written on it.

So that was my first question. My second question was, they did all this math in the beginning. And I thought, well, the judge is going to have no discretion whatsoever, is what it sounds like. If you knew nothing, you think, are they just going to calculate the sentence here, that the crime is going to generate a number? And instead, having calculated the math, the judge basically, more than basically, he conceded that the criminal justice system does not work unless the sentence squares with just the average man on the streets feeling of what's reasonable.

And that's the important test, is you hear the crime, you hear the sentence, and the average man on the street says, oh, yeah, sounds about right. And he then proceeded on a very kind of emotional and beautifully scripted little speech about how he felt about this whole thing and how we all should feel about it. And it was just like we were in the land of moral sentiment rather than math. When he started to talk about what the sentence was going to be and why, and you got the feeling he could have said 100 years or two years and that he was pulling the actual sentence out of his rear end rather than out of his calculator. Am I wrong about that?

Rebecca Mermelstein

I don't think it comes out of a calculator, but I think it is more than just made up out of thin air. And I think that when we talk about what a person on the street would think, I think the way judges are often framing that is through what's called the 3553 a factor. There's the guidelines analysis. Right. You have to do that math.

In this case, as we know it spit out a recommended sentence of 110 years. Nobody thought that was the right sentence. Not the government, not the probation department, not the judge, not defense counsel. And then in imposing sentence, the judge has to consider these listed factors in 18 U. S.

C. 3553 a. And those include things like the need for just punishment, the need for deterrence, the need for the sentence to reflect the seriousness of the offense, the need not to create unwarranted discrepancies, disparities between similarly situated defendants. Right. And what I think, when you think about all those factors together, what those do is in a slightly less lawyer way than the math they get at fundamental fairness.

Right. And the purposes of sentencing, which are a few. Right. Deterrence, punishment, in some cases, incapacitation. The judge in this case.

Michael Lewis

Have you had a chance to read what the judge said? He said, there is a real risk of recidivism. My jaw was on the floor there, but I was interesting. It surprised me that he thought, oh, if we don't put this man away for a long period of time, he's going to come back and create another crypto exchange or whatever. But didn't Sam Bankman Fried's statement make it sound like he would be someone who might come back and start another crypto exchange?

If he could, the world wouldn't let him. So I don't think Sam bank would be given permission to start another crypto exchange. He's probably going to be banned for finance, just for starters. So it just seems really unlikely that this person would go do it all over again. But the judge was quite intent on this point.

It was like, I think I look at you and I can already see how you're going to do it all over again. So I got to put you away for long enough that you can't do that. I have to say, I thought the government submission was very, very strong in this case. I thought there were a lot of arguments that were very well made. I found that the weakest argument they made, I don't think there's a realistic chance of him being a recidivist, they had a whole site of prior cases where white collar defendants committed similar crimes after having been convicted.

Rebecca Mermelstein

Strangely, and by coincidence, many of those are cases I personally handled, oddly enough. And the big difference there is those aren't cases where there was this kind of publicity. And so I don't think that that is actually a significant piece of what was necessary for sentencing. But I'm not the judge. And you gave us a list of.

Michael Lewis

Things to watch for or to listen for before we went in. You said you'd be listening for how much focus the judge placed on Sam's perjury. How Sam had behaved on the stand was, I think you might have mentioned, had he shown remorse.

They were all I found running through my head as he was approaching the sentence of 25 years, as he was about to deliver that. And I was trying to, I was thinking, how would the sentence have been affected if, for example, he hadn't perjured himself? What if he hadn't? And let's replay this. I know you can't answer this question exactly, Rebecca, but let's just say Sam Beckman fried had been a completely different kind of defendant.

If he just sat there quietly, looking sad, seeming sorrowful, seeming remorseful in a way that was persuasive and just took it, how much different would his sentence have been? It's obviously impossible to know. The guidelines give you a mathematical kind of suggestion, right? Because perjuring yourself results in a two level enhancement. So failure to accept responsibility, had he pled guilty, that's a three level reduction.

Rebecca Mermelstein

So you can do the math, but that doesn't get you anywhere, both because the loss here is so high that the math stays astronomical no matter what you do. And so it doesn't really help you. And because it's not that scientific, you know, if he had been extradited, shown up and said, I did it, and I'm sorry, and I take full responsibility and I want to plead guilty and do what I can to help the bankruptcy estate. What was he going to get in light of the 25 years he did get? I say twelve to 15, we'll never know, but we'll never know.

Michael Lewis

Right. I just wonder what that cost him. A lot, I think. Do you think he could have gained anything if when he, in his statement, he said he was truly sorry, which he didn't really do in sentencing today. I don't think it was likely to move the needle much at this point.

Rebecca Mermelstein

I think that Michael is right that the judge, given the thoroughness of the briefing and the trial had largely formed an opinion at this point. And so in the absence of something really surprising happening, he had sort of decided where this was going to go. And so saying, at this point, I take full responsibility. Not ultimately, I take responsibility for this, but I didn't do anything wrong. But I did do something wrong, and I admit that I committed crimes and I am sorry.

I think there would be a too little too late vibe and a sense that you're saying it now because you have no choice and it's your last dish effort. So I don't know that I think it would have been helpful. And of course, he's hoping to appeal, and there are strategic reasons not to make that admission at this point in the game. So I don't know that I think it would have moved the needle, but I do think that had he earlier acknowledged responsibility, and this happens a lot, actually, with trials where a person goes to trial, they exercise their right. The judge understands that they wanted to put the government to its proof, but that it's sentencing.

The person accepts responsibility. I think it might have moved the needle. I think that a failure to admit your own criminal conduct feeds into the recidivism concern. Because if you can't admit you did something wrong now, then how are you not gonna do it next time? Right?

Michael Lewis

But you think you'd at least fake it for the purposes of the trial, and Sam didn't even really fake it. So I have next question. Two questions. First question is they had a victim. They allowed a victim to come and speak.

The victim. I thought the purpose of the victim speaking was to enhance the prosecution's case. That seemed to be why he was there. But the victim got to the podium and just went on and on and on about how the bankruptcy was stiffing him. Basically was a full throated attack on Sullivan and Cromwell and not on Sam Bankman freed.

It was like the guy was saying. He was saying what Sam Bankman freed was saying, the money's there. I want my money back, and these lawyers won't give it back to me. The judge finally silenced him and said, this isn't bankruptcy court. But I would have thought the prosecutors would have vetted what the victim was going to say before he said it.

And that's not how it works. So it's interesting. I don't know what happened behind the scenes here. Obviously, victims of a crime have a statutory right to be heard at sentencing. So it is for sure true that the government sometimes strategically invites victims or encourages victims to attend.

Rebecca Mermelstein

But it is also certainly possible that the government did not intend to have any victims at sentencing in this case. And this guy said he wanted to talk, and he's entitled. And given what you've just said, it sounds like it's pretty. Does that mean that every FTX victim could have showed up and insisted on speaking? As a practical matter, what would have happened if thousands of people had said they wanted to talk?

I don't know, but I've never seen it happen. Yes, they each have a right. I've never seen it be a problem. Lord, that could get messy.

Michael Lewis

The second thing, I think the best. The best. I love LJ's take on this, but my favorite part of the theater was Judge Kaplan himself. He had almost a novelistic sense of the character that he had made. He had made the kind of effort I make when I'm writing about someone to try to really get to know that person.

And at one point, when he's talking about why Sam Bankman fried might come out and do it all over again, he used the phrase, it's his nature. And it was like he felt like he had gotten to the nub of Sam Beckman Fried's character. And I don't think he was far off. I think he actually put his finger on the thing. And does that happen?

Did I just witness something that was really unusual in a courtroom, or do judges actually do this kind of thing where they actually kind of take apart, piece by piece, the defendant's character? I think it's common. I don't think it happens in every case. It's dependent on the judge and the personalities and the crime itself. Some crimes don't lend themselves.

Rebecca Mermelstein

They're not long, big picture, ongoing things. They're crimes of a moment. And so this kind of deep analysis of personality and what kind of person does this, you wouldn't see, but I don't think it's uncommon to see a judge really try to look at the whole picture. And I think that's part of the job of a judge. At sentencing, you'll hear judges often say, you know, you are not the worst thing you did.

And my job is to consider not just the criminal conduct here, but who you are as a person. What are the good things in your life? People are complicated, right. You could be the best father in the world and also, you know, a terrible criminal. So I don't think it's unusual to hear judges do that kind of analysis, given how long this case has gone on and how long the trial was and all the kind of bumps this judge has a lot more to work with in making that analysis than sometimes happens where a person might, you know, get arrested and appear in front of the judge, appear at the plea, and then appear at sentencing.

And the only thing the judge has to work from is sentencing submissions and the PSR. But no, I don't think it's uncommon. LJ, what were your favorite moments? I mean, I definitely. I thought it was really interesting to hear from Judge Kaplan, because I think he, for the entirety of the trial, had had to hold back on what he was thinking and how he was viewing the story.

Lydia Jean Kott

And then this was finally his opportunity to kind of say, this is what I saw, and this is how I feel about it. But he also kind of summed up the story when he talked about the coin flip that we also talked about in the podcast. And it's just something that really sticks with you. When he said that, Caroline had this anecdote about how Sam said that if there was a coin and if he flipped it one way, the world would be two times better, and the other way, the world would be destroyed. And Sam said he would choose to.

Michael Lewis

Flip the coins because it had positive expected value. It was more likely there's a slightly better chance that the world could be better. And I think that's kind of what Judge Kaplan was saying was, like, sam's fatal flaw. I agree with that. It is.

And the nub of his crime is theft always feels like the wrong word. It was taking people's money and risking it without telling them. And he did this with people's emotions, too. It's like, numb to his own risk, but also other people's risk, like, and oblivious to it. And who gets.

Why does Sam Banker think he has the right to flip that coin when it's going to have lots of effects other than on him? I mean, Rebecca, I don't know how often you see this, but this thing has, this trial, this whole episode has the contours of great theater or great novel.

That the love affair ends with the lovers opposed, and that she ends up being the person who brings him down after all this, and being the one who gets inside the judge's head and plants the seed of who he really is is kind of amazing. I mean, I don't know how often you have the feeling in the courtroom that I'm watching something that's naturally good theater. I think courtroom often is naturally good theater. And as we've talked about before, I think prosecutors and defense lawyers are storytellers, just like novelists. I think to me, it's less a romance gone wrong and the irony of her testimony being this thing that really resonated with everyone and more about the thing that what made him so successful was ultimately also what brought him down and his idiosyncratic personal sense of morality, an overconfidence, perhaps, coupled with what was undoubtedly someone who was brilliant in many ways, ultimately was his downfall.

Rebecca Mermelstein

And I mean that, not just in that it ultimately caused him to commit these crimes, but I think that the government really did a convincing job of taking the defense arguments about his autism and his neurodiversity and trying to contextualize who he is as a person in that lens. And the government flipped it on its head and said, that's the problem. The problem is he will never be able to change. He can't be sorry. He can't see that this is wrong because he thinks he always knows better and that it's worth it, and so then he will do it again.

And I thought that was an argument that they made. Well, and I think Kaplan believed it. And one thing that I just realized that I think is really interesting is that Sam Bankman fried. When he gave his statement, he talked about kind of like what he so appreciated about his friends and the people who turned on him. And what he appreciated about Carolyn Ellison was how good she was at writing reviews of people, the employee reviews.

Lydia Jean Kott

They were really thoughtful. And in the end, it was kind of her appraisal of Sam Bankman fried that we're all left with. Yeah, judging Sam. We'll be right back.

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Michael Lewis

Welcome back to judging Sam. Do you think that Sam has any hope on appeal? No. Yeah, I wouldn't have thought so either. Yeah, I mean, it's there.

Do you see any vulnerability in Kaplan's. Decision, the sentence itself or the course. Of the whole case? Well, the sentence itself, actually. What he said today.

Rebecca Mermelstein

I haven't seen the transcript, so I'm a little hamstrung from Foley opining, but I thought the sentence was, what did. You think it was going to be? Higher, actually. Well, I've bounced all over and been wrong in every direction, I would say. Immediately after the trial, I thought he was going to be looking at the 15 year range I thought he's sort of Elizabeth Holmes e in a lot of ways.

Right. You could see that as a reasonable benchmark. The dollar amounts aren't the same, but at some point, what's the difference? And then after I read the sentencing submissions, I thought he was going to get between 40 and 40. What caused you to update, as Sam would say?

Yeah, I thought that the most compelling part of the government's submission, which was new because a lot of what they're saying is trial evidence and evidence of wrongdoing, and that's all strong, but it's not news anymore, was that chart they had where they said, we looked at all the defendants who had guidelines range that look like Sam's driven by loss amount, not people who did some technical kind of accounting fraud, where it's like pretend numbers, people who took other people's money. And here are the sentences they got. And it's, you know, at the low end it's 20, at the high end it's 100 something. And it's kind of clustered in the 40, 50, 60 range. And I found that a powerful argument because I think one thing judges struggle with all the time is you have an enormous amount of power and discretion.

You have to do what you think is right. You as a person think is right. But you also have to take seriously the obligation to give a sentence that does not create unwarranted sentencing disparities. And there should be general sense of fairness and a general sense that your fate doesn't rise and fall with the randomness of the judge that's assigned to you. And if you find the government's chart meaningful and there's ways to attack it as not being a good representative sample, then it really pushes towards a higher sentence.

And this is a guy who didn't plead guilty. I think it was clear Judge Kaplan was going to find that he perjured himself, that he witnessed tampered, that he had never said he was sorry. And I've always had the sense that Judge Kaplan really didn't like him. And I thought it was going to be really a shocking sentence. I've now been wrong twice.

Lydia Jean Kott

Well, I'm curious, Rebecca, what's the reason for why you think the judge went down then, from the 30 to 40 that you're expecting? Yeah, I think it'd be interesting to get the whole transcript and see everything he said about his explanation. But I agree with what Michael said earlier, which is, you know, the judge runs through these factors, pluses and minuses, and it's not really clear at the end of that, where they're gonna land, right. Which ones will matter the most and how the math is gonna come out. Why?

Because he didn't say anything in the transcript. To be clear, everything he said would make you think he would get a long sentence. Yes. Right. Michael, if you were sitting with us in the courtroom, Rebecca, you would have thought your 40 would have gone to 60 after about five minutes of Kaplan talking.

Michael Lewis

And then after ten minutes, you might have gone to 100. You might have thought, what is it? It just felt like something weird was gonna happen. But what was weird that was happening was he was. He was talking a different game than he was playing.

And I don't know. I don't know why. I had a thought popped into my head, and it's probably a completely bullshit thought, but the only thought, the thing I couldn't get out of my head was Barbara fried, sam's mom, had written a letter, and there's a line in the letter that she'll never see her son out in the world again. And Kaplan, I know that sounds. This is.

But Kaplan spoke with some sympathy about the parents, and I wondered if he wasn't, like, thinking, give her a little hope. You know, it's like, don't just put them away til they're gone. But the number is kind of arbitrary. It's hard to know why he picked that. But I think you're right that the difference in the sentence I was thinking might come, and the sentence that came is that he will have a life outside of prison.

Rebecca Mermelstein

It's very, very hard to build a life after being released from that length of a prison sentence. But the expectation is he's going to have a whole phase of his life post prison. Will his parents be alive at that point? That's a different question. And that's a sad, very sad question.

But he will, he's 32 now. He got 25 years. You get 15% off for good time. So 21 years. So he'll be in his early fifties when he gets out.

If he had gotten 40 something. There's really a question about whether or not there's much life left afterwards. And I think when you think about this, you think about it in buckets, right? Should he be a person who functionally dies in jail? Should he be a person where they might die in jail but they have some hope?

Or do you want them to have a real phase of life after this? And I think Judge Kaplan granted him a phase of life after this. So what exactly does happen next? Can you explain that? So there's a bureau of prisons process for designation.

It incorporates the factors one would imagine get built in. Do you have the need for any kind of special treatment, either a medical issue, a drug issue? There are people with cancer and are in prison and they're getting chemo, right? So do you need to be in a medical facility? What level of prison do you need to be at?

Lydia Jean Kott

Kaplan, he said, or lower security prison. He said medium or prison, didn't he? I don't know what that meant to put him in a minimum security prison for that, with that length of time. So what does it mean, medium? I know he said that, but it's actually not up to Judge Kaplan.

Rebecca Mermelstein

It's up to the Bureau of Prisons. And so it is. He is recommending that. That is what happens. But ultimately, the Bureau of Prisons will decide, and I think Michael's exactly right, that one big factor is the length of your sentence.

The lowest kind of prison is a camp, and a camp often has, let's call it permeable borders. Right. Inmates might be mowing the grass outside the fence because they have six months left and they're not likely to flee. Nobody with 25 years can go there at this phase of their prison stay. So there'll be a choice about sort of where he's going to be, and he'll be moved by the US marshals to that prison.

The request that it be near his parents, I expect, will be honored. And so I think you can expect he'll be moved to a prison in California. He'll begin making his life there and settling in. In the meantime, he's already hired an appellate lawyer. There are all these deadlines that are set, but they're extendable.

And so sometime in the next six to nine months, let's call it, you'll see an appeal brief filed by his lawyer. You'll see the government respond. There will be probably an argument in front of the second Circuit, which is public. People can go, and then one of two things can happen. The second Circuit will say, we were denying your appeal.

You can appeal to the Supreme Court, but the Supreme Court doesn't have to take that case. They almost never do. I don't think there are novel legal issues here that are likely to be heard. And so if the second Circuit denies it, that's largely the end of the legal maneuvering. They could also find some tiny error that's a little technical, but actually requires some additional thing.

This is mostly over for the public, I would say. What about how long does it take to figure out what prison he's going to go to and get him there. It takes a few months usually to do it. There's a separate question about transportation. Because he has to be transported by the marshals, they're not just going to put him on a commercial flight.

They have a plane and buses that they use to move inmates around, and it's, it's known as being a very unpleasant experience. They don't put you on a plane in New York and fly you to California. You often end up on a bus to Texas and then moving back towards like there's a bopping around as they transport people in all directions. So he'll be moved at some point. He'll probably end up spending a few nights here and there in all different prisons.

And so I think you can expect he'll be in California six months from now.

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Lydia Jean Kott

Rebecca, is there anything that you want to know about what happened today? I don't know if you could see from where you were, Lydia Jean, or if Michael had a better view from where he was, but I always can't help but watch the defendant and his family and the prosecutors, although they always are poker faced for the reactions to what the sentence was. What was the reaction in the overflow. Room, I had the best view of Sam and LJ would have had the best view of the parents. Sam, if you were watching him and you couldn't hear what was being said, you would have no idea from his body language or facial expressions that it had gone one way or the other.

Michael Lewis

He was immobile, so it was very hard to read. It was very hard to. It was very hard to read how he thought it went or whether he was, whether he was surprised in a good way or a bad way. Yeah, I was sitting a few rows behind Sam make Minfrid's parents, and I couldn't see them the moment that the judge said the sentence. But I was watching them throughout, and they also seemed to.

Lydia Jean Kott

I mean, one thing that strikes me is how close they are. At some point, they had their heads right next to each other. They're very much a unit. But I also felt like they were trying their best to kind of not be there. Like their mom was looking out the window.

His dad kept had his head down as opposed to during the trial, where it felt like they were really paying attention at this time, it felt like they were more there in body than in spirit. What it felt like to me from watching from a few rows back, they. Had zero hope that Kaplan was going to do something really nice. I mean, they're of the opinion that Kaplan has a particular dislike of their son, and they also think the process was grotesquely unfair, et cetera, et cetera. So they'd already kind of checked out.

Michael Lewis

They left their hope downstairs with their cellphones. So. And I don't think Sam felt any different. I mean, my sense was Sam was probably of your mind, Rebecca. He probably surprised it was not a bigger.

That he got as short a sentence as he did. How do you feel about it? How do you feel about it? Does it feel just to you? Do you think he nailed it, or do you think, and let me frame this in a slightly different way than Kaplan framed it, anybody who hasn't been paying really close attention would leave the courtroom thinking that the assertion that the customers are to get their deposits back is just like speculation, that it's, you know, we don't know this is true.

And even if it is true, it's irrelevant. I would argue with this. I'd push back on this. If you talk to a normal person about this and you say this is what happened, and the customers are not only get their money back, but they're going to get 40% on top of it, those are the latest guesses. The claims market.

The claims are trading almost at par now, which is incredible. This just doesn't happen. But it's happened here. The average person has a different reaction to it when they know the customers are going to get their money back if they think that Sam Bankman fried, vaporized and stole $10 billion. So it does affect the way people feel about it.

And it isn't just speculation that they're going to get their money back. The bankruptcy people have said they're going to get their money back. Now every time John Ray is asked to talk about it, he tries to say that, oh, don't get ahead of yourself. We're not sure this is going to happen. But in the bankruptcy court, they said he was going to get their money back.

And the claims market, which is the best way to evaluate this, people who are trading these claims are willing to buy them. You can get your money back from them. So you get $0.93 on the dollar now from them because they think they're going to get 140. So this isn't speculation. So he framed it in a way that felt false to me.

Framed the way he framed it. The way Judge Kaplan framed the whole thing. 25 years feels lenient. It felt like an act of mercy. Framed the way I think of it, it felt crazy harsh that eight felt right or something like that.

So I came out of two minds, like, incredibly lenient, given how he thinks about this thing. Incredibly harsh, because he thinks of it this way. And I didn't. I was. I'm conflicted about it.

I don't know. I may say I reserve the right to change my mind about how I feel, but I had this kind of, kind of tooth. I had a. I was kind of being pulled in. My mind was being pulled in two directions when I walked out of the courthouse.

Rebecca Mermelstein

I have a few thoughts. I think there's a deep and interesting philosophical question about why punishment is different when the outcome is different and not just based on the person's conduct. Because let's use an easy example of drunk driving. If you drive drunk and you get stopped and there's breathalyzer and you're very drunk, but nothing bad happens and you just drive home, you, in the first instance, probably don't even get convicted of a crime. Maybe if you hit someone while you're driving drunk and they die, you get convicted of vehicular manslaughter or murder.

Right. That's kind of crazy. Two people did exactly the same thing. One person got lucky, one person got unlucky, and the outcome is so, so different. And I'm not sure the outcome should be so, so different based on that luck.

And if you think about it that way, then I think it is really irrelevant that people are getting their money back, because there was no guarantee that would be true. Now, I know there's a dispute here between the parties about whether or not the money was always there, or as Judge Kaplan said, he bet on a horse and he won. But that doesn't really. Right. He couldn't have known that.

So I guess one point is, should it matter whether or not they get their money back? I agree with you. We all have a sense it should, but maybe it should. I think that's the first thing. I think the second thing to remember is that it's two years later and they don't have their money back.

So it's all well and good to say, well, they're going to get it. And maybe for institutional investors or wealthy individuals, if it's coming, it's okay. But for a lot of people, it's not okay to have been without it for two years, and it's been a real hardship. And so I'm not sure that they will get it back. Undermines that they.

Michael Lewis

I'm not saying it's all good. I'm just saying it's different. I'm just saying it's different. It feels different. What do I think on the sentencing itself?

Rebecca Mermelstein

I would say I'm a softie, actually. I always found sentencing super hard when I was a prosecutor, and I always found it super sad, because in all the years of standing up and asking judges to send people to jail, I can count on one hand how many people didn't have a family, right? The number of people for whom there were no sad collateral consequences is almost zero. Almost everyone has people who care about them and innocent people who didn't do anything wrong. I think we can debate if Sam Bankman Fried's parents are in that category or not, because they had some interesting involvement here, but there are people whose lives are terribly touched, and they didn't do anything.

And so sentencing is always hard, and I'm just not convinced that sentences this long serve much purpose ever, almost, unless you need to incapacitate someone. So there are certainly terrorists, murderers, where you think, if we don't lock you up, you will never stop. I had a guy once, it was his fifth securities fraud conviction. He was like 70 something years old. That guy was just going to keep going.

There was no stopping him. But mostly, that's not true. And so when you're just thinking about just punishment, and I know victims want retribution and vengeance, but there's a reason we don't let victims decide what happens to perpetrators. And so I just don't know that it serves a purpose. It all feels very sad to me.

I recognize that people need to have this notion of general deterrence, that consequences will prevent other people from doing it. But there are studies, actually, that courts and prosecutors all ignore that show that there is virtually no improvement at the level of general deterrence for sentences that are over. I think I'm now struggling to remember about five years. So when you raise the maximum sentence for murder from five to 25, it does not change how many murders happen. So we talk about general deterrence, and I think that's very important.

And there's no question this is being followed closely. But if he had gone to jail for 15 years, were there really a lot of people who are going to say, well, in that case, I guess I'll do it? And I think the answer is no. LJ, how do you feel about it. I mean, yeah, I agree with Rebecca in that it just seems really hard in general to justify sending someone to prison for decades in any circumstance.

Michael Lewis

I think that's a good note to end on. Thank you. Thanks for doing this. Thanks, Rebecca. It's great to be back with you guys.

Rebecca Mermelstein

It's been. It's been a real trip.

Michael Lewis

Judging Sam is hosted by me, Michael Lewis. Lydia Jean Cott is our court reporter. This episode was produced by Ariella Markowitz and edited by Jacob Goldstein. It was engineered by Sarah Bruguer. The music was composed by Matthias Bossi and John Evans of Stellwagen Symphonet.

Judging Sam is a production of Pushkin Industries. To find more Pushkin podcasts, listen on the iHeartRadio app Apple podcasts, or wherever you listen to podcasts. If youd like to access bonus episodes and listen ad free, dont forget to sign up for a Pushkin subscription at Pushkin FM plus or on our Apple show page.

Rebecca Mermelstein

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Judging Sam: The Sentencing

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1. Courthouse Reflections

2. The Courtroom Theater

3. Legal Insights

4. Character and Consequences

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