Is it possible that multimillion dollar jets may be forfeit in the case of Sam Bankman-Fried, despite never having been used by him? This question looms as U.S. prosecutors attempt to reclaim assets in a recent crackdown. Two aircraft, specifically a Bombardier Global and an Embraer Legacy, have been flagged by the Department of Justice in a forfeiture bill. These jets are reportedly part of Bankman-Fried’s assets and could be seized.
The Legal Battle
Bankman-Fried is currently embroiled in a legal battle in New York, facing fraud and conspiracy charges. These allegations stem from the collapse of his cryptocurrency exchange, FTX, in November 2022. Despite these serious charges, he maintains his innocence. The two aircraft in question are currently marked as owned by a ‘private’ entity according to airplane trackers.
The ownership of these jets has become a bone of contention between the DOJ and FTX, as revealed in a court filing from September 21. This filing is part of Bankman-Fried’s former company’s bankruptcy proceedings, with the aim to recover funds for creditors.
The Dispute Over Ownership
The government argues that the jets should be forfeit as they were purchased with fraudulent proceeds. On the other hand, FTX asserts ownership based on the claim that the loans used for purchasing the planes were not documented. This argument was presented by Island Air Capital (IAC), the company seeking clarification on who will be responsible for the ongoing maintenance and inspection costs while the dispute is resolved.
Interestingly, it has been noted that no one associated with FTX ever used either of the planes. They were still in the process of being upgraded when the company filed for bankruptcy.
Origins of the Jets
The Embraer and the Bombardier were originally purchased by IAC for $12.5 million and $15.9 million respectively. These purchases were made using financing from FTX, according to the filing. The financing was part of an unsecured, no-interest loan agreed upon in a verbal agreement between Bankman-Fried and IAC’s owner, Paul Aranha.
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