[HN Gopher] SBF's legal defense is being funded with Alameda mon...
___________________________________________________________________
SBF's legal defense is being funded with Alameda money he gave his
father
Author : lxm
Score : 302 points
Date : 2023-03-29 15:31 UTC (7 hours ago)
(HTM) web link (www.forbes.com)
(TXT) w3m dump (www.forbes.com)
| lordnacho wrote:
| How does the law work? If you nab a pile of money from your
| customers and give it to your family, and then get sued, what
| happens? If you lose, does the court reverse all the transactions
| and give it to the creditors? Or can you just have your parents
| give you money to live off when you're out of jail? Surely not?
| boeingUH60 wrote:
| It takes time to investigate the transfers and prove they were
| fraud proceeds before possibly clawing them back...as the
| investigation lingers, prosecutors will likely ask SBF's dad to
| return that money.
| mindslight wrote:
| I believe the creditors would have to challenge the gift as a
| "fraudulent transfer", based on the idea that at the time the
| giver knew they were open to a huge liability from having taken
| the money in the first place. And then another similar step to
| go after the money that went to the attorneys.
|
| And in this case the "creditor" would be the FTX bankruptcy
| estate, led by whomever has been appointed the receiver.
| Theoretically they should be working for creditors of FTX, but
| can obviously have their own motivations of expediency, not
| wanting to rock the boat by suing another firm, etc.
| nradov wrote:
| FTX creditors will presumably sue SBF's parents in US civil
| court and claim fraudulent conveyance. The plaintiffs will
| certainly ask the court to freeze those assets and not allow
| them to be squandered on criminal trial defense, but who knows
| whether the court would approve such a motion.
| kibwen wrote:
| You always hear RICO get thrown around in these sorts of
| things, which allegedly allows the government to seize anything
| obtained as part of a criminal enterprise, but I'd need a
| lawyer to weigh in and determine whether that's actually true
| and whether RICO would apply to this case.
| nickff wrote:
| RICO usually doesn't apply:
| https://www.popehat.com/2016/06/14/lawsplainer-its-not-
| rico-...
| dragonwriter wrote:
| A good guideline to use in internet discussions where this is
| raised is: It's never lupus. Er, RICO, never RICO.
|
| This is...not an exceptional case in that regard, AFAICT.
|
| (RICO has a very specific definition of a criminal enterprise
| which, while it may occasionally apply to something that
| doesn't look very much like the Mafia, usually doesn't. It is
| not "any enterprise that involves crime". There are a whole
| lot of predicate offenses, but they aren't all crimes, and
| the enterprise has to relate to them in a particular way.)
| danso wrote:
| (tangent) Ok this confuses me:
|
| > _(in December, their $1.8 million Palo Alto home was used to
| secure a $250 million bail package after Bankman-Fried was
| released on a personal recognizance bond._
|
| Their _Palo Alto_ home is worth only $1.8M? Do they live in a 1BR
| /0.5BA shed?
|
| edit: Apparently the assessed value (for property taxes) is
| $1.8M. But realtor sites estimate it at $3.1M, and it was
| apparently renting for $12,000/month back in 2013. Still cheaper
| than I thought for a 4-br home on Stanford's Dish
|
| https://sfstandard.com/business/inside-sam-bankman-frieds-pa...
| [deleted]
| dragonwriter wrote:
| Looking right now at listings in Palo Alto, the few things in
| that range ($1.5M-$2M) are 2-3 bedroom, 1-3 bath, 1,200-1,900
| sq. ft.
| jibe wrote:
| The house is on the Stanford campus, and is under Stanford's
| control. It can only be sold to Stanford employees, so it
| limits the value.
| cdolan wrote:
| I think you make a great point and I agree, but to play
| devils advocate for a second...
|
| Do we think Stanford is lacking in people willing to live
| there? I bet it may even increase the chance (so long as the
| HOA is not all that bad!)
| mattheww wrote:
| You're right, the thing limiting the value is not demand -
| there are more than enough faculty and high-level staff
| that want to live there.
|
| The thing limiting the value is the other restrictions that
| Stanford imposes on these houses - namely they essentially
| control the price the houses sell for because they all have
| to be financed through a Stanford-controlled lending
| program.
| bee_rider wrote:
| It seems weird that they could us a property constrained like
| that to secure a bail.
| ksherlock wrote:
| $250 million bail secured by a $1.8 million house and
| that's the weird part?
| NotYourLawyer wrote:
| There's actually nothing at all weird about that.
| SilasX wrote:
| Only because federal courts are _consistently_ weird
| about it! :-p
|
| From an objective, outside perspective, it's definitely
| weird to say, "Put up $X to assure us you'll actually
| appear for trial. Oh, you're putting up .01X? Okay, we're
| cool."
|
| Like, even accepting the validity/logic of the cash bail
| system, they should just be honest and call it .01X bail.
| The full X is never actually _used_ for anything beyond
| "look at us, we're a serious court, taking this flight
| risk seriously".
|
| (To pre-empt a thoroughly well-tread response from the
| previous threads: Yes, I know, in SBF's case, the parents
| are on the hook for the rest of the X, so X is, in a
| sense, "used". But their net worth is nowhere near X --
| more like .04X -- so that just pushes the farce ratio
| down to .96X, which, while better than .99X, is still
| pretty darn close to X.)
|
| My earlier comments about this absurdity:
|
| https://news.ycombinator.com/item?id=34810830
|
| https://news.ycombinator.com/item?id=34599868
| NotYourLawyer wrote:
| It's a silly game they play, but the fact that it's
| common means there's nothing _weird_ about it happening
| here.
| SilasX wrote:
| That's exactly the distinction I was making in the first
| two paragraphs, about "weird" relative to existing
| practice vs "weird" relative to the outside world's
| standards for reasonable behavior.
| dragonwriter wrote:
| > From an objective, outside perspective, it's definitely
| weird to say, "Put up $X to assure us you'll actually
| appear for trial. Oh, you're putting up .01X? Okay, we're
| cool."
|
| What is historically weird in the history of money-
| involved bail is the practice of having a penalty plus
| either full-value security or arms-length employment of a
| government-licensed agent as surety with a government-set
| fee schedule; penalty, surety, and security are three
| separate levers to acheive compliance.
|
| What's weird from a system _outside_ of money bail world
| is...money bail.
|
| The federal system of the courts having freedom to adjust
| the compliance levers independently to acheive what they
| feel is necessary sufficiently acheive compliance is
| weird only from the perspective of the system that has
| evolved _away_ from that in state practice (and the even
| more divergent image of that state practice that has been
| advanced by popular media portrayals and
| misunderstandings.)
|
| > Like, even accepting the validity/logic of the cash
| bail system, they should just be honest and call it .01X
| bail
|
| Would you view a $100,000 non-dischargeable, non-expiring
| debt to the federal government when you have $100,000 in
| current assets as equivalent to $10 million non-
| dischargeable, non-expiring debt to the federal
| government when you have $100,000 in current assets?
| SilasX wrote:
| I wasn't criticizing additional means to achieve
| compliance -- I don't know what you think you were
| addressing there.
|
| >Would you view a $100,000 non-dischargeable, non-
| expiring debt to the federal government when you have
| $100,000 in current assets as equivalent to $10 million
| non-dischargeable, non-expiring debt to the federal
| government when you have $100,000 in current assets?
|
| Would you view the $10 million as anything other than a
| number that attempts to sound big but will not have any
| meaningful impact?
|
| I can see $100k vs $200k as being a meaningful
| distinction, but not $100k vs $10 million (re-read the
| farce-ratio part).
|
| >What's weird from a system outside of money bail world
| is...money bail.
|
| Did you miss this part?
|
| >>Like, even accepting the validity/logic of the cash
| bail system,
| dragonwriter wrote:
| > Did you miss this part?
|
| Well, I addressed:
|
| (1) What was weird within the history of money-involved
| bail, and
|
| (2) What was weird _outside_ that context, and
|
| (3) Why the federal system was not #1, and
|
| (4) What context the federal system was weird in.
|
| So...no?
|
| Did you miss...my entire post?
| quonn wrote:
| Why not? Many houses can be constrained by a HOA, state law
| etc. It's value and market value can presumably still be
| determined, so I would assume it can be used.
| strangattractor wrote:
| I suppose Stanford could buy it back for the agreed to
| price thus providing them cash. Seems they don't need it
| however.
| ralph84 wrote:
| They live in housing that can only be purchased by Stanford
| professors.
| moralestapia wrote:
| Talk about being sheltered.
| compiler-guy wrote:
| The house is on Stanford land and so does can only be sold to
| Stanford faculty or staff. In fact, it's technically not even
| owned, it is leased from the university.
|
| This changes the pool of potential buyers, and therefore the
| market is quite different than the normal Palo Alto market.
| chollida1 wrote:
| Well most fraud trials involve a person stealing directly from
| their company.
|
| Atleast SBF took the extra step of first funneling money to
| Alameda and then directing Alameda to send it back to him and
| then send it to his dad as a tax free gift.
|
| That way he could honestly say he personally has no money left.
|
| That atleast makes it harder for FTX to claw back that money.
|
| One interesting thing a lawyer pointed out to me is that a lawyer
| has a duty to ensure that the money used to pay them wasn't from
| the proceeds of a crime.
|
| I wonder how SBF's lawyers have done thier diligence in this case
| and satisified themselves that this wont' get them into trouble
| with the state bar.
| jasondigitized wrote:
| I'm sure Stanford considers this ethical behavior by his
| father.
| bee_rider wrote:
| "I'll give my ill gotten gains to someone who technically
| wasn't involved (until they accepted my money)" couldn't
| possibly be a new trick. (Hypothetically that is, if SBF
| actually did a crime; I'm not following the case).
| blockwriter wrote:
| Aren't tax free gifts capped at $14,000.00 per year?
|
| Edit: Er, I guess it's $16,000.00 without needing to report it,
| and then anything above that can be offset against a $12 ish
| million lifetime exclusion.
|
| https://money.usnews.com/money/personal-finance/taxes/articl...
| rsstack wrote:
| You need to report a gift over $14k but you don't owe until
| much higher limits. Same as how people who make very little
| money have to report income even if it's lower than the
| lowest tax bracket.
|
| Also, as a reminder, the gifter pays the tax and not the
| person who received the gift. If someone gifts you an
| illiquid asset, you aren't forced to go into debt to pay a
| tax. But the gifter has to figure things out on their end.
| cft wrote:
| This is correct. The tax thresholds are of the order of
| 12mm
| ambicapter wrote:
| What does the gifter pay tax on? -$14k?
| rsstack wrote:
| This isn't an income or gains tax. Not all taxes are
| about money gained. For example, sales tax when you pay
| $100 isn't negative $8, it's $8.
|
| When gifting large amounts of money, the IRS gets more
| money on top (so, if you're super rich, don't gift ALL
| off your money, and leave some aside for tax season).
| delecti wrote:
| Gifts larger than 14k essentially count against your
| eventual estate tax exclusion.
|
| If you give away $12.06 million on the day before you die
| (which would be tax-free), then the entirety of your
| estate is taxed at 40% (both 2022 numbers). If you die
| without having made any gifts exceeding $14k, then the
| first $12.06 million of your estate is not taxed at all,
| and the remainder is taxed at 40%
| toomuchtodo wrote:
| Not investing or financial advice. If your estate will
| incur said tax, be giving up to your annual exclusion
| till death.
| gopher_space wrote:
| It's sort of how you handle assisted living costs.
| Everything's cheaper if you've distributed your assets
| beforehand.
| mrguyorama wrote:
| It's also why means-testing an end of life program that
| only looks back X number of years is inevitably not
| actually testing means.
|
| Every rich person has a guy who will tell them how to
| avoid it legally. Every poor person never had any money
| in the first place. It only ever hits middle class and
| upper-low class people who saved money for some of their
| life and were never told that they had to disburse their
| assets at X-1 years before they planned to need care and
| get hit with a huge penalty to their assistance when they
| inevitably have to move some of their cash around to pay
| for some of their expensive care.
|
| If you don't want rich people getting public funds for
| things, you have to be able to look beyond their money
| games, which is hard, expensive, often purposely
| sandbagged, and not usually successful.
|
| So just tax them their whole life instead, and let them
| get back some of what they put in with every other
| person.
| newjersey wrote:
| I would go a step further and call for an end to all
| means testing for anything government funded.
|
| I am relatively poor and this will help me because even
| though I am poor I still have to prove I am poor which is
| burdensome.
| [deleted]
| bcrosby95 wrote:
| The exclusion amount is also per recipient.
| Avicebron wrote:
| It says so in the article, but here's some corroboration
|
| https://www.schwab.com/learn/story/estate-tax-and-
| lifetime-g...
|
| EDIT: read a little further, guess the 11-12 million
| exemption only lasts until 2025, so if you can use, do it
| fast.
| NotYourLawyer wrote:
| The gift tax thing seems like a distraction. He would have
| needed to file a gift tax return for giving $10 million, but
| no taxes would be due. But he could just as easily have given
| $100 million, filed the return, and paid a large gift tax--he
| had plenty of cash floating around back then.
|
| I guess what I'm saying is, it wasn't a way to _hide_ the
| gift, because it still triggered the need for a gift tax
| return filing.
| erosenbe0 wrote:
| Yeah that's how I read it. He gave [possibly ill-gotten]
| money to his parents. If tax was involved, then the
| treasury might need to give that fraction back to the
| bankruptcy trustee. If not, great, then it's just the
| family that needs to disclose to the trustee.
| pksebben wrote:
| [flagged]
| timr wrote:
| FWIW, that law also capped the SALT deduction (a deduction
| which almost exclusively benefitted the rich), and
| increased the standard deduction, which was a huge benefit
| to most normal people.
|
| Say what you will about the other parts of it, but it
| didn't fall cleanly on party, plutocrat or ideological
| lines. The fact that the GOP effectively _raised_ taxes for
| a big chunk of the moderately wealthy was a weird change of
| pace.
| amluto wrote:
| The standard deduction is IMO a load of crap. With a
| large standard deduction, only high-income people can
| make tax-deductible charitable contributions.
|
| The right way to do it would be to make the standard and
| itemized deductions additive.
| op00to wrote:
| I make tax-deductible charitable contributions all the
| time. They're not tax-deductible for me, but I don't
| judge my charitable giving solely on whether I am able to
| ultimately deduct that particular donation from my taxes.
| lotsofpulp wrote:
| How is the standard deduction stopping non high income
| people from making tax free charitable contributions?
|
| I thought all charity is deductible from taxable income.
| noisenotsignal wrote:
| You can't deduct charitable donations unless you don't
| take the standard deduction. Instead, you must itemize
| your deductions. In practice this means you take the
| standard deduction because most people don't total more
| than the standard deduction when they itemize (you have
| to be decently rich to afford to donate that much!).
|
| Last year you could deduct up to $300 in donations on top
| of the standard deduction, but I didn't see it this year.
| dragonwriter wrote:
| > In practice this means you take the standard deduction
| because most people don't total more than the standard
| deduction when they itemize (you have to be decently rich
| to afford to donate that much!).
|
| Charitable donations aren't the only itemizable
| deductions.
| noisenotsignal wrote:
| Ok, I'm sorry for not enumerating all possible itemized
| deductions when we're talking about charity specifically.
|
| However, charity is _probably_ the most well-known
| deduction that you can control (in contrast to stuff like
| state taxes, which are more or less predetermined). And
| even among the deductions you control, those deductions
| require some spending. Can a non-rich person really spend
| enough to itemize beyond the standardized deduction? If
| you know how, please let me know because I've never
| gotten close to the standard by itemizing! Even when I've
| had large purchases to compute sales tax for I'm still
| far away.
|
| Otherwise, it's pretty clear that, generally speaking,
| charitable donations aren't helpful for reducing one's
| taxes. I'm sure people donate because they want to, but
| the tax benefits are not part of the calculus.
| cozzyd wrote:
| Because you're better off taking the standard deduction
| so you have no tax incentive to make charitable
| contributions.
| lotsofpulp wrote:
| Yes, that I knew. I would not summarize that as
|
| > only high-income people can make tax-free charitable
| contributions
| amluto wrote:
| Okay, so you can donate $100 to charity, feel warm and
| fuzzy because it's tax-free or however you want to think
| about it, and pay _exactly the same amount of tax_ as if
| you didn't give the gift.
| op00to wrote:
| Yes, that's how the standard deduction works.
| cduzz wrote:
| Right. You can also create a charity, which you run, and
| donate millions of dollars to it, and write that off
| against your taxes as a charitable donation.
|
| Then, because you run that charity, you can still spend
| the money (mostly) as you please.
| amluto wrote:
| Exactly. But the point here is this is only available to
| people who wish to donate more than about $13k per year.
| skinnymuch wrote:
| How do you donate $15K if you're not high income? If you
| donate $2500 nothing changes. You pay taxes on it.
|
| Really no charity is deductible except rich people
| charity.
| op00to wrote:
| Why does this matter? A $100 deduction in income has a
| very, very, very small effect on your overall tax
| liability.
| skinnymuch wrote:
| If we look at the amount of money people earn, pay taxes
| on, and how wealthy they are, many patterns show up.
| Including rich people donating to avoid taxes and poor
| people without much income not being able to deduct $1K.
| Or $2K. Pick any number. $100 is the unimportant part.
|
| I changed the number to $2500 if that makes it easier.
| That does dilute the importance because a lot if not
| majority of the country can't donate $2500 extra a year
| from their current budget and income.
| gct wrote:
| Most of those raises on the moderately wealthy will
| expire December 31, 2025, the ones on the middle class
| won't
| nielsbot wrote:
| Turns out there's a workaround for people who have pass
| through companies (LLCs and S-Corps). If you pre-pay your
| state taxes from your company those will be excluded from
| the new, lower deduction cap.
|
| Wild.
| tedivm wrote:
| The SALT deduction did not mostly benefit the rich. It
| benefited people who live in states that actually provide
| services to their constituents.
| timr wrote:
| ...who mostly happen to be rich. Particularly if they
| make enough money and/or pay enough in tax to hit the
| cap.
| tedivm wrote:
| It was a middle class tax increase for California and New
| York.
| lotsofpulp wrote:
| > The fact that the GOP effectively raised taxes for a
| big chunk of the moderately wealthy was a weird change of
| pace.
|
| It was a genius political move, because it also mostly
| only affected rich people in Democrat led states. If
| Democrats want to get rid of it, they would have to
| explicitly campaign to lower taxes on the top 20% of
| income/wealth, which would not be a good look for them.
| swores wrote:
| > " _it also mostly only affected rich people in Democrat
| led states_ "
|
| Please could you explain why? (Assuming it's not just
| that Democratic states have more wealthy people?)
|
| edit: thanks for the replies!
| dragonwriter wrote:
| > Please could you explain why?
|
| Because instead of eliminating deductibility they capped
| it, and Democratic states in general have more people
| with state and local taxes above the cap, because of a
| combination of higher average income and more progressive
| state taxes (often characterized as higher, but even when
| this is true in overall tax burden, its often still
| _lower_ for same-income taxpayers for low- to moderate-
| income.)
| lazide wrote:
| Cities almost always vote democratic, the bigger they
| are, the more true it is.
|
| Cities have high cost of living, and also tend to have
| high income earners. So tax burdens (and incomes, and
| expenses) tend to be much higher. In some cases, 5-10x
| higher.
|
| The largest cities in the US are also in democratically
| controlled states with high taxes.
|
| SALT allowed many of those high earners in those states
| to offset some of the tax burden by offsetting their
| federal taxes. Essentially moving tax revenue from the
| fed to the state.
|
| So the GOP managed to screw over the primary fundraisers
| of their opponents and increase tax transfers to the
| federal gov't at the same time by capping SALT.
|
| Most of their supporters (and all their key votes) are in
| rural areas with lower cost of living (and often state
| taxes) which generally fit well under the cap.
| dragonwriter wrote:
| > SALT allowed many of those high earners in those states
| to offset some of the tax burden by offsetting their
| federal taxes.
|
| More accurately, before the limit, SALT excluded _all_
| covered state and local for the purposes of federal
| income tax, keeping federal tax policy _neutral_ on state
| tax policy.
|
| With the limit, there is a cap on the absolute amount of
| state and local taxes per person that get that treatment,
| creating a federal tax penalty for both strongly
| progressive taxes (which concentrate tax burden on a
| smaller number of rich taxpayers) _and_ state economic
| success (which, for any tax policy less regressive than a
| straight capitation, increases the absolute tax liability
| per individual.)
| lazide wrote:
| Eh - that's what we like to say to ourselves, but the
| first part isn't true I think.
|
| For instance, for pre-cap SALT to have resulted in a
| truly neutral federal tax policy, it would have had to
| not existed at all and have federal taxes be unaffected
| by state taxes.
|
| Since it did exist, assuming a population has some fixed
| amount of taxes they consider 'too much' and all gov't
| actors are looking to maximize towards that limit, it
| incentivizes states to take as much as they can, since
| the federal taxes 'give way'.
|
| The cap basically says 'eh, we'll let you do that, but
| only so much'. The 'how much' just so happens to still
| benefit their constituents while not helping their
| opponent's constituents.
|
| Which yes, has those effects you are stating, as their
| constituents tend to be more rural, which tends to have
| less economic activity in general, have lower incomes,
| etc, and hence aren't hurt in the same way.
|
| Though many of their donors tend to have higher incomes,
| and I imagine it took some convincing that it was worth
| taking a potential hit to 'stick it to the libs'.
| lotsofpulp wrote:
| Democrat led states have higher state and local taxes.
| Some of it due to policies that redistribute wealth, some
| of it due to mismanagement of the state.
|
| Edit: also, Democrat led states have higher land prices,
| so generally, percent based taxes like property tax will
| be nominally much higher and hit the SALT deduction cap
| quicker.
|
| It disproportionately punishes richer people in states
| with higher taxes (usually Democrat led) compared to
| richer people in states with lower taxes (usually
| Republican led), giving more incentive for richer people
| in states with higher taxes to either vote for lower
| taxes in their own state (i.e. vote Republican), or move
| to a state with lower taxes (a Republican led state).
| dragonwriter wrote:
| > Democrat led states have higher state and local taxes.
|
| "More concentrated on higher-income earners" is both more
| accurate, and more relevant to the effect of the SALT
| limit (though having higher average income is _also_
| relevant to the SALT limit, overall tax burden and
| distribution across the income spectrum aside.)
|
| E.g., R-trifecta Iowa has a higher overall tax burden
| than D-trifecta California, but substantially lower high-
| end taxes. [0][1]
|
| [0] https://wallethub.com/edu/states-with-highest-lowest-
| tax-bur...
|
| [1] actual total state & local tax burden by income is
| hard to find, but top income tax rates are indicative
| here: https://turbotax.intuit.com/tax-tips/fun-
| facts/states-with-t...
| notch898a wrote:
| Do high earners consume progressively more proportion of
| their income in public resources than the poor? Why would
| you jack up their tax rate? Also note you picked the
| literally only one of 11 states in [0] above California
| that is (R).
| skinnymuch wrote:
| Because high earners are rich people but not rich enough
| to be capitalists. So they get screwed and somehow
| capital gains isn't blamed or tax loopholes but poor
| people.
|
| Edit: my context was about taxes in general not specific
| enough to SALT
| dragonwriter wrote:
| > Because high earners are rich people but not rich
| enough to be capitalists
|
| "High earners" includes capitalists; one of the reasons
| the SALT cap hits hard in California is that California
| not only has the highest high-end income tax rate, it
| (unlike many states and the federal government) taxes
| capital gains as normal income, not at a reduced rate.
| Both parts of this policy are things that the SALT cap is
| designed to put pressure against.
|
| The SALT cap, not the state and local taxes it targets,
| is pro-capitalist and anti-worker.
| skinnymuch wrote:
| Ah thank you. You corrected my misconceptions in a few
| lines. Welp I hate it now! Thanks for solidifying my
| view.
| op00to wrote:
| The states with the highest local tax burden are the most
| progressive states. A $180,000 fixer-upper in my town
| already exceeds $10,000 in property taxes. Like 80% of
| that is school tax. Rather than beg for federal money to
| educate our children or shortchange them by cheaping out,
| we pay for it ourselves. Rather than beg for federal
| money to fix our pipes, we fix them before they utterly
| fail.
|
| The lowest tax burden states have the worst schools,
| poorest health outcomes, crumbling infrastructure, and
| expect the federal government to bail them out. Forget
| that, I'm tired of subsidizing the lazy states.
| lotsofpulp wrote:
| Where is this? I have never heard of a 5.5% property tax
| rate in the US. Most I have seen is NJ/IL cities at 2.5%,
| maybe 3%.
| eigenvalue wrote:
| Because blue states have both the highest state/city
| income taxes, property taxes, and home values. The
| changes reduced the ability to subtract those things when
| determining federal taxes.
| dragonwriter wrote:
| Its a genius political move because you can sell opposing
| it as serving the rich, while the primary effect (and the
| entire intent) is to create political pressure on states
| to transfer tax burden from the rich downward to the less
| rich.
| asimeqi wrote:
| The SALT deduction cap definitely raised taxes for me and
| I wouldn't call myself any kind of rich. As a
| Massachusetts resident I took it for what it is, an
| attack on people that live in blue states. I am sure it
| gave D.T. a deep sadistic pleasure to claim "I lowered
| your taxes" knowing he raised them for millions of
| people. The cap is fundamentally unjust since I am paying
| Federal Tax on money that I use to pay taxes to city,
| state etc.
| op00to wrote:
| s/moderately wealthy/already highly taxed/g
|
| Fuck that noise about capping the SALT deduction.
| Seriously. I live in a place that has high property and
| state taxes because we pay our fair share to give
| residents of my state a decent life. Property taxes for
| fixer-upper starter homes in my area exceed the SALT
| deduction cap. The cap hits people who are "moderately
| wealthy", but that definition of moderately wealthy cuts
| into what is decidedly the middle class.
|
| You can try to twist it like it was some win for the
| working class, but it was aimed smack at blue states as a
| punishment for doing the right thing.
|
| Good schools, effective municipal services, and so on.
| The bullshit federal money sucking states, with their
| lower property and state taxes, discovered it's easier to
| just get the federal government to pay for your stuff.
| Poor people do worse, rich people do better.
| lotsofpulp wrote:
| > I live in a place that has high property and state
| taxes because we pay our fair share to give residents of
| my state a decent life.
|
| What if the high taxes are because politicians and union
| leaders from decades ago promised lavish post retirement
| benefits to government employees in exchange for low
| taxes, then underfunded the savings and/or made corrupt
| investments, and now find themselves taking taxes from
| taxpayers today to pay for labor performed decades ago?
|
| See IL/NJ/CT.
|
| Also, in NJ's case, high taxes because of 500 different
| governments with redundant police/schools/fire/other
| government employees.
| mattnewton wrote:
| I think it's not a weird change of pace at all, the SALT
| deduction was mostly enjoyed by people with high state
| and local taxes, which are mostly blue states. A policy
| that gives wealthy people in Texas and Kentucky loopholes
| while raising taxes on residents of California and New
| York seems fairly partisan to me.
| tacitusarc wrote:
| I think a more honest take was it leveled the playing
| field by removing a loophole. I think it's hard to argue
| that the deduction was anything more than pandering to
| rich people in blue states...
| mattnewton wrote:
| It always made sense to me as a subsidy to states and
| local municipalities, who would otherwise might rely on a
| much more inefficient process of asking for federal funds
| to make obligations to their citizens like schools and
| infrastructure a reality. The rich people can (and often
| do) move for tax reasons, so I don't see it as a handout
| to them. I do see it as a subsidy to states who want to
| run more of their own infrastructure and function as the
| "laboratories of democracy"
| troad wrote:
| It didn't raise taxes on people in California and New
| York - California and New York did that. It's just that
| until that law passed, those states were able to hide
| this by cutting into federal tax receipts via the SALT
| deduction.
|
| Why should the federal government subsidise runaway state
| taxes though? Which colour states does that advantage?
| And what kind of incentive does that create for states?
|
| If the residents of California and New York want lower
| state taxes, I strongly encourage them to lobby / vote
| for lower state taxes, rather than demanding to be
| subsidised by poorer states.
|
| Edit: I'm seeing responses to things I'm "suggesting" or
| "essentially arguing", but which actually appear nowhere
| in what I wrote. My comment is about the SALT deduction.
| mindslight wrote:
| Real estate taxes are a necessary expense to earn income
| in the first place, and therefore make sense as a
| deduction.
|
| It's the multitude of exceptions that prevent individuals
| from deducting necessary and customary expenses required
| to earn their income that are the problem. Glaringly - a
| W2 employee needs a car to get to work? Or more recently,
| a W2 employee needs a home office to work remotely? The
| tax code says fuck em, they can pay for those twice!
|
| The disparity is why the plebs get all uppity when some
| ragebait article highlights some seemingly-ridiculous
| expense that businesses write off. When the right answer
| is to make it so that individuals can deduct expenses the
| same way businesses do.
| Retric wrote:
| That's a very odd take, California and New York heavily
| subsidize poor states via federal taxes.
|
| So you're essentially arguing "Poor/Red" states need an
| even larger handout from "Rich/Blue" states.
|
| As to lowering state taxes, high taxes are a major reason
| rich states are rich. People want the services those
| taxes provided.
| yonran wrote:
| I disagree with this bitching that rich states are
| "subsidizing" the poor "handout" states through federal
| progressive taxes. This is how progressive taxation is
| _supposed_ to work, and it would be clearly insensitive
| and arguably incorrect for a rich individual in the rich
| state to complain that he is subsidizing the poor person
| in a poor state. Rich states collect rents from winner-
| take-all markets that serve the nation, and it is good
| pro-equality policy to return some of the wealth back
| with the rest of the country to reduce inequality and
| promote opportunity.
|
| Edit: to respond to the comment below: I'm not arguing
| that local taxes should be low; in fact, I think property
| taxes should be much higher and fairer in California. My
| point is that the federal government should not provide a
| federal tax break for local spending e.g. on education.
| The coasts already do too much opportunity hoarding.
| Retric wrote:
| What bitching? My comment was purely descriptive.
|
| The winner takes all nature is a result of those high
| taxes and the services they provide. Arguing for lower
| state taxes in rich states is arguing to destroy the very
| thing that enables these subsidies in the first place.
|
| NYC for example couldn't survive without the
| infrastructure its taxes pay for.
| prottog wrote:
| Do you also agree with the assessment that the highest
| income earners heavily subsidize the poor? Because that's
| the same reasoning behind the "blue states subsidize red
| states" trope.
|
| The federal balance of payments with the various states
| is a function of tax receipts from that state against
| federal spending in that state. States with lots of high
| income earners will, by progressive taxation, naturally
| contribute more to the federal pool. States with lots of
| recipients of federal benefits, on the flip side of the
| coin, naturally receive more from the federal pool. There
| are outlier states on either side.
|
| Looking at 2019 data as the last "normal" year (since
| post-Covid, every single state received more in federal
| spending than they gave in taxes), Connecticut,
| Massaschusetts, and New Jersey (all blue states) are the
| clear outliers in per-capita balance of payments, where
| each resident in net gave north of $2000. Among outliers
| in the receivers, Kentucky, New Mexico, and Virginia (one
| red state, two blue states) stand out . KY I'm not sure
| why, but NM and VA are clear destinations for lots and
| lots of federal spending, with many federal programs
| being run in those states. California is touted as
| "paying" for a lot of stuff, but on a per capita basis it
| was only about $300.
|
| Among the rest, there are a good mix of red states and
| blue states that receive more than they pay. Alabama? Red
| state, net recipient. Maryland? Blue state, net
| recipient. Utah? Red state, net payer. Washington? Blue
| state, net payer.
|
| That having been said, the implicit argument behind your
| point is that blue states are rich because of their blue
| policies and red states are poor because of their red
| policies. I have yet to be convinced of this.
| Retric wrote:
| There are many ways to slice and dice these numbers.
|
| Work out how much that 300$/year _from birth_ would add
| to someone's retirement and say it's not a lot of money.
| skinnymuch wrote:
| Why don't poorer states stop being subsidized by CA and
| NY? Why are you only suggesting changes to blue states?
| Do you have underlying motive?
| dsfyu404ed wrote:
| Careful now. "Intellectuals" don't tend to do very well
| when things go that way. A heck of a lot of them will wind
| up losing their heads along with the elite. Techies,
| journalists, and other well-ish off white collar cogs in
| the machine would do well to think a little more about what
| people outside their bubble think about their profession's
| effect on society.
| omginternets wrote:
| This. Y'all need to read more history.
| notch898a wrote:
| The interesting history is people will behead even
| themselves to get at the elite. See everyone in Zim /
| Rhodesia driving out the farmers that they surely knew
| they needed to eat, followed by utter destruction of
| their foodstocks and hyperinflation.
| pclmulqdq wrote:
| It's OK, the TCJA was from the party they oppose, so they
| don't mind you bad-mouthing that law. You had better not
| question the ACA or the "inflation reduction act."
| afterburner wrote:
| Er, there have been several elections since 2017, when that
| bill was passed. The Republicans had control of the
| Presidency, House, and Senate in 2017. They eventually lost
| all three, but recently gained back the House. Locked up
| the Supreme Court though.
| r00fus wrote:
| The French, despite having a bad rap, have it right.
|
| Their government fears them, not the other way around. And
| they don't even use guns.
| konschubert wrote:
| If the fact that gifts above 14K a year are taxed sends you
| to the barricades, you may want to check which side of the
| barricades you're on.
| lotsofpulp wrote:
| Gifts above $14k are not taxed in the US. Currently, you
| have to give away $13M+ in your lifetime before you are
| subject to estate tax.
| e40 wrote:
| Not only that, merely naming their laws with words that are
| opposite to what they do appears to completely take the
| heat off them.
| detourdog wrote:
| if the gift isn't cash Alameda can determine the value of the
| gift mor or less.
| olalonde wrote:
| > One interesting thing a lawyer pointed out to me is that a
| lawyer has a duty to ensure that the money used to pay them
| wasn't from the proceeds of a crime.
|
| If that's true, it seems a bit ridiculous. SBF is pleading not
| guilty. Are his lawyers supposed to do their own little
| investigation to figure out whether their client is actually
| guilty?
| JohnFen wrote:
| > Are his lawyers supposed to do their own little
| investigation to figure out whether their client is actually
| guilty?
|
| Umm, yes? Not because of the money thing, but in order to do
| their job properly.
|
| I'd think that if they were doing their job properly, it
| would be pretty clear pretty quickly whether or not their
| client is guilty. And whether or not their client is guilty
| is important for them to know, because it will definitely
| affect how they proceed with defending their client.
| watwut wrote:
| > Are his lawyers supposed to do their own little
| investigation to figure out whether their client is actually
| guilty?
|
| Actually yes, they are supposed to do that. Not because of
| money, but as they are preparing the defense.
| olalonde wrote:
| That's besides the point though. Consider the legal
| principle of "innocent until proven guilty" - a fundamental
| pillar of the justice system. It is not the job of a lawyer
| to determine whether a defendant is guilty or innocent;
| they are only responsible for presenting evidence and
| arguments to support their client's case. Ultimately, it is
| the judge or jury who must decide whether to convict or
| acquit. The whole process is designed to determine guilt.
| Requiring a lawyer to know whether their client is guilty
| in advance amounts to asking them to predict the outcome of
| that process, to foresee the future.
|
| PS: I am not trying to defend SBF here and I hope that that
| any money linked to Alameda/FTX, including the money he
| sent to friends and family, is clawed back. But that's a
| separate issue.
| JohnFen wrote:
| > Consider the legal principle of "innocent until proven
| guilty" - a fundamental pillar of the justice system.
|
| It's "innocent until proven guilty _in a court of law_ ".
| Not necessarily in your lawyer's office.
|
| > Requiring a lawyer to know whether their client is
| guilty in advance amounts to asking them to predict the
| outcome of that process, to foresee the future.
|
| No, that's a different thing. Requiring a lawyer to know
| the facts is not requiring the lawyer to know how the
| court will rule in the case.
| olalonde wrote:
| They can form an opinion on whether their client is
| guilty. But they can't know whether they are correct
| until the verdict.
| freejazz wrote:
| >Consider the legal principle of "innocent until proven
| guilty" - a fundamental pillar of the justice system.
|
| Let's not put the cart before the horse. It's the law
| firms obligations to make sure they aren't participating
| in a crime, it has nothing to do with assuming someone's
| guilt.
| olalonde wrote:
| So tell me: if the lawyers get paid by SBF, are they
| participating in a crime? Doesn't the answer depend on
| whether SBF is guilty or not?
| JohnFen wrote:
| If they're knowingly being paid from the proceeds of a
| crime then yes, they're participating in the crime.
| olalonde wrote:
| That's different from "has a duty to ensure that the
| money used to pay them wasn't from the proceeds of a
| crime" though. If their client claims they're innocent,
| would they be clear because they don't know that their
| client is guilty?
| twelve40 wrote:
| the issue might be not the lawyers getting into trouble
| necessarily but for those fees to be confiscated. Why
| would you as a lawyer sign up to do all this work when
| there is a chance your fees will evaporate?
| olalonde wrote:
| Indeed. If that's what OP meant, it makes a lot more
| sense.
| chollida1 wrote:
| Well as I had it explained to me.
|
| Run the following thought experiment.
|
| You are a lawyer. Your client is accused of robbing a bank.
| The bank has the serial numbers of the bills taken. Your
| client pays you in cash and the serial numbers match the
| stolen ones.
|
| if you agree that you are being paid by the proceeds of a
| crime, then congrats you agree with the law and now all you
| are figuring out is where the line is.
|
| Turns out its somewhere between a forensic audit of your
| client and 100% certainty that you're being paid with stolen
| funds.
|
| The government or prosecution claiming the funds you're being
| paid with are from the proceeds of crime is well within the
| ethical and legal bounds that lawyers are held to.
|
| Like many issues when it comes to professionals, there is
| often a burden on the professional to make sure they are
| acting ethically. Engineers can't build a building to a
| clients spec if it would be dangerous. Doctors have a duty of
| care to not harm a patient even if the patient wants to be
| harmed and lawyers have a duty of care to know the origins of
| the funds paying them.
|
| That's one of the burdens of being a professional
|
| Courts are more than happy to adjudicate if there is a gray
| area.
|
| Also if that doesn't convince you then remember, people can
| be forced to hand back assets that were stolen even if the
| owner had no way of knowing ti was stolen. The lawyers don't
| want to spend all that time defending SBF and be paid with
| stolen funds, just to have the courts come and tell them to
| pay back the money as it never belonged to SBF at all.
|
| It's in their own best interests to know and vet where the
| money came from.
| freejazz wrote:
| Sorry, do you think ignorance is an excuse for a crime? I
| don't believe there is an intent requirement, so their mental
| state at the time of receiving the money is of no
| consequence.
| olalonde wrote:
| Yes, it ought to be. Otherwise, you would be taking a big
| gamble anytime you accepted money from strangers. It would
| be quite impractical. Also, it goes beyond mere ignorance,
| it's unknowable. SBF's lawyers will find out whether he is
| guilty on the day that the verdict is pronounced.
| SilasX wrote:
| In the sense of whether their client has committed the
| underlying acts they are accused of, yes, this is something a
| lawyer would definitely want to know, and try to find out, as
| it effects what legal defenses can actually work vs. are
| likely to be swiftly rebutted.
|
| (I realize there a much broader claims being made in this
| thread, like about where the payment money is bad and what
| obligations that prompts. I'm _not_ attempting to address
| issues such as those, just the narrower topic above.)
| macspoofing wrote:
| >That atleast makes it harder for FTX to claw back that money.
|
| The 'Madoff Recovery Initiative' was incredibly aggressive in
| going after all of Madoff's family and acquaintances. SBF's
| family and acquaintances are going to be fighting lawsuits for
| years and will lose millions.
| [deleted]
| HopenHeyHi wrote:
| Ah, The Floor Is Lava defense.
| [deleted]
| from wrote:
| > One interesting thing a lawyer pointed out to me is that a
| lawyer has a duty to ensure that the money used to pay them
| wasn't from the proceeds of a crime.
|
| I don't think this is true in the US. Lawyers do not have any
| obligations under the Bank Secrecy Act or laws that would
| require this and there are other things like the text below
| that would make prosecuting a lawyer for this very difficult,
|
| https://www.law.cornell.edu/uscode/text/18/1957
|
| > (1)the term "monetary transaction" means the deposit,
| withdrawal, transfer, or exchange, in or affecting interstate
| or foreign commerce, of funds or a monetary instrument (as
| defined in section 1956(c)(5) of this title) by, through, or to
| a financial institution (as defined in section 1956 of this
| title), including any transaction that would be a financial
| transaction under section 1956(c)(4)(B) of this title, but such
| term *does not include any transaction necessary to preserve a
| person's right to representation as guaranteed by the sixth
| amendment to the Constitution;*
|
| https://www.justice.gov/jm/jm-9-105000-money-laundering
|
| > Because the Department firmly believes that attorneys
| representing clients in criminal matters must not be hampered
| in their ability to effectively and ethically represent their
| clients within the bounds of the law, the Department, as a
| matter of policy, will not prosecute attorneys under SS 1957
| based upon the receipt of property constituting bona fide fees
| for the legitimate representation in a criminal matter, except
| if (1) *there is proof beyond a reasonable doubt that the
| attorney had actual knowledge of the illegal origin of the
| specific property received (prosecution is not permitted if the
| only proof of knowledge is evidence of willful blindness);* and
| (2) such evidence does not consist of (a) confidential
| communications made by the client preliminary to and with
| regard to undertaking representation in the criminal matter; or
| (b) confidential communications made during the course of
| representation in the criminal matter; or (c) other information
| obtained by the attorney during the course of the
| representation and in furtherance of the obligation to
| effectively represent the client.
| chollida1 wrote:
| I appreciate your response and this is what I also countered
| with, though not as nicely cited:)
|
| this is a good response
|
| https://www.moneylaunderingnews.com/2018/09/use-of-
| tainted-a...
|
| Turns out its not black and white as people expect
|
| - lawyers fees can be clawed back due to asset forfeiture.
|
| > Federal forfeiture laws, on the other hand, pose a
| different kind of risk for lawyers -- one that the Safe
| Harbor Provision does not protect against. Forfeiture laws
| are premised, in part, on the notion that tainted assets
| belong to the government as of the date the underlying
| offense was committed
|
| - while its true that courts have decided that taking all of
| a persons money so they can't pay for their defense has been
| ruled illegal by the courts the amount of money that lawyers
| think the client has can be significantly reduced by the
| courts. So if SBF has say $20M now, the courts can claw back
| 75% of that leaving the client with far less to pay than the
| lawyers originally though.
|
| Or put another way, you are entitled to a defense, you are
| not entitled to have unlimited funds to pay for your defense.
|
| Also given that the money is coming from SBF' dad( a third
| party) and not SBF this seems to be relevant.
|
| > Moreover, the Fourth Circuit has held in a divided decision
| that the Safe Harbor Provision does not apply in instances
| whereupon an attorney "receives and deposits" tainted funds
| from a third-party payer.
| from wrote:
| Yes that's true, in fact they can freeze some of your
| untainted money pending trial in order to preserve it for
| forfeiture. I just don't think the lawyer would get in
| trouble for it and in the worst case would have to give
| back some of the money. If you read the Blair decision it
| is way different than this case because he was laundering
| money on behalf of his narcotics trafficking clients
| through real estate.
| pengaru wrote:
| > Atleast SBF took the extra step of first funneling money to
| Alameda and then directing Alameda to send it back to him and
| then send it to his dad as a tax free gift.
|
| Isn't this worse for him in the long run if he's found guilty
| though? Words like "structuring", "posturing", "evasion" come
| to mind...
| TacticalCoder wrote:
| > Words like "structuring"
|
| As much as I want to see that scammer _and his family_ rot in
| jail , as much as I find "structuring" totally unfair.
|
| If you set the limit to, say "$1 K / day" and then someone
| does "$1 K / day, everyday", it's not doing anything wrong.
| Instead of inventing the concept of "structuring", instead
| write the actual limits more clearly: _" $1 K / day, $10 K /
| year max"_ (for example). Then it's clear that the limit is
| $1 K / day max and that you can only do it up to 10 times a
| year.
|
| For otherwise it's just one of the oh-so-many arbitrary rules
| invented so that even honest people may be, unknowingly,
| doing something illegal.
|
| Laws against structuring makes me think of this: _" The more
| numerous the laws, the more corrupt the state"_.
|
| The state should make the law clear or go fuck itself.
| cik2e wrote:
| >> Atleast SBF took the extra step of first funneling money to
| Alameda and then directing Alameda to send it back to him and
| then send it to his dad as a tax free gift.
|
| I am pretty sure it's the source of the money that matters more
| (legal vs. illegal) than whether the accounting tricks are
| legally sound.
|
| What you're saying sounds like "at least he wasn't a complete
| numb-nuts", but that's not much of an "at least" in this
| scenario.
|
| I am pretty sure the courts will be looking for an "at least he
| wasn't stealing from his customers".
|
| At least, that's the sane hope.
| koolba wrote:
| Also if the father is "in on it", then this would also lead
| to an additional conspiracy charge that adds him to the
| cabal.
| jonathankoren wrote:
| Stealing money then gifting to yourself via a trusted straw
| man? Now that's effective altruism!
| AlbertCory wrote:
| As far as I understand the law, not being an actual lawyer, this
| is the "rationale" behind asset seizure: prevent a criminal from
| funding his or her defense with the proceeds of criminal
| activity. Obviously in the poster-child case, they haven't been
| convicted of anything yet.
|
| I'm not defending asset seizure: it's become a way for the
| government to steal assets without trial. But SBF cleverly made
| it what lawyers like to call a "close legal question" by
| funneling the money to his father as a gift.
| dwighttk wrote:
| This isn't that money! It's entirely different money I saved
| while spending the Alameda cash!
| jmyeet wrote:
| Here are 2 questions I have about this whole FTX saga:
|
| 1. How is it that a supposed $250 million bond was secured with
| (according to news articles) significantly less value than that
| in assets? How does that work? The collateral seems to be his
| parents' house, a few hundred thousand in cash assets and little
| else beyond that. Huh? So what makes this a $250 million bond?
|
| 2. The government can (and routinely does) seize assets without
| the owner being convicted of anything. Hell, they do it when the
| owner never gets even _charged_ with anything. To me, this is a
| clear 4A violation and should be unconstitutional but the 4A
| holds no sway over current judicial politics so here we are.
|
| In this case we have clear evidence of fraud. Pretty much
| anything SBF touched with FTX or Alameda money can quite
| reasonably be presumed to be the proceeds of crime. Why on Earth
| in this case is the government not seizing, well, everything?
|
| Bear in mind that the legal standard for this is quite broad. If
| you buy a $1 million home with $100,000 of fruad proceeds and
| $900,000 of your own money, those fraud proceeds taint the entire
| asset, not just the portion directly tied to fraud. As such, any
| money given by SBF to anyone poisons pretty much every asset the
| gift-receiver owns. The government would be well within its right
| to seize or at least freeze pretty much everything.
|
| So how have SBF's parents escaped the government's seizure net?
|
| If you think about it, it's the equivalent of robbing a bank and
| then using those stolen funds to pay for your bond and lawyer.
| The government wouldn't stand for that in the case of armed
| robbery. Why are they here?
| danso wrote:
| > _1. How is it that a supposed $250 million bond was secured
| with (according to news articles) significantly less value than
| that in assets? How does that work? The collateral seems to be
| his parents ' house, a few hundred thousand in cash assets and
| little else beyond that. Huh? So what makes this a $250 million
| bond?_
|
| I believe it boils down to "making a statement". Even if SBF's
| friends and family were only able to offer up $2.5m in assets
| (i.e. 1% of a $250M bond, instead of the more common 10%
| threshold), it's still (according to the court) a massive
| disincentive for SBF to flee. But the court still wants to
| assert that he's accused of crimes that merit such a massive
| bond.
|
| From Bloomberg:
|
| https://www.bnnbloomberg.ca/sbf-s-250-million-bail-is-one-of...
|
| > _Such bonds also signal the seriousness of the crime being
| charged, and federal prosecutor Nicholas Roos made that point
| in court._
|
| > _"Mr. Bankman-Fried perpetuated a fraud of epic proportions
| stealing billions for customers lenders and defrauding
| investors," Roos said._
|
| That said, with the revelation in today's Forbes story, I
| wonder if knowing that Mr. Bankman had $10M worth of gift money
| from his son was known to the court at the time, or relevant to
| the bond agreement? i.e. would the court have demanded that
| money be stashed as collateral along with SBF's home? At the
| time the bail was announced, SBF was claiming his personal
| assets were in the $100,000 range
| dragonwriter wrote:
| > Even if SBF's friends and family were only able to offer up
| $2.5m in assets (i.e. 1% of a $250M bond, instead of the more
| common 10% threshold)
|
| The "more common 10% 'threshold'" isn't actually a threshold
| for security pledged to the court, It's the fee _paid_ to a
| licensed bail agent (very often, legislated as the fixed or
| minimum fee for that service in state law) to stand as surety
| as an alternative to the defendant offering _full value_
| security.
|
| But, again, that's a common feature of _state_ bail systems,
| not the federal system, which can be much more flexible.
|
| > That said, with the revelation in today's Forbes story, I
| wonder if knowing that Mr. Bankman had $10M worth of gift
| money from his son was known to the court at the time, or
| relevant to the bond agreement
|
| If it wasn't (or if the evidence that it was stolen hasn't
| already been reviewed and considered by prosecutors), I would
| expect further action related to bail conditions and possibly
| freezing/seizure of that money in the near future.
| jmyeet wrote:
| Just compare [1] how swifty and unilaterally the government
| can act in seizing assets. In this case, Amazon alleged to
| the Department of Justice (specifically the US Attorney's
| office for the Eastern District of Virginia) that Carl
| Nelson, a former employee, had committed the obscure crime
| of "honest services fraud" and, based on that, the US
| attorney seized the assets of Carl Nelson, his family, a
| bunch of associates and even their lawyers.
|
| By the way, that was 2 years ago. The government ultimately
| settled and returned most of the money. No one has ever
| been charged.
|
| So why is SBF getting the kid glove treatment? In other
| circumstances, based those gifts, SBF's parents' assets
| would 100% be seized.
|
| I stand by my assertion that SBF secured his release with
| the proceeds of the crimes he committed.
|
| [1]: https://reason.com/2022/02/18/fbi-seized-
| almost-1-million-fr...
| dragonwriter wrote:
| > How is it that a supposed $250 million bond was secured with
| (according to news articles) significantly less value than that
| in assets? How does that work?
|
| That's...just the way federal bail tend to work [0].
|
| > So what makes this a $250 million bond?
|
| Because that's what SBF and his parents have consented to
| become jointly and severally liable for, with essentially no
| available defense (bail forfeiture is essentially an automatic
| default judgement) if he fails to appear, etc. The "bond" is
| the agreement to be subject to that liability. _Security_ for
| the bond is a separate thing, and unlike many state systems,
| full-value security or the involvement of a licensed bail agent
| _isn't_ a norm that applies.
|
| > The government can (and routinely does) seize assets without
| the owner being convicted of anything. Hell, they do it when
| the owner never gets even charged with anything. To me, this is
| a clear 4A violation and should be unconstitutional but the 4A
| holds no sway over current judicial politics so here we are.
|
| > In this case we have clear evidence of fraud. Pretty much
| anything SBF touched with FTX or Alameda money can quite
| reasonably be presumed to be the proceeds of crime. Why on
| Earth in this case is the government not seizing, well,
| everything?
|
| Believe it or not, even if you don't like the process, there is
| legal process involved in seizures of assets suspected to be
| proceeds of a crime (including if they are not going through
| civil forfeiture, but being held as subject to future criminal
| forfeiture, which seems more likely in this case). "It appeared
| in a news article" does not fulfill the procedural requirements
| on its own.
|
| [0] actually, its more of a mixed bag, IIRC, because the
| individual districts have their own practice, but its how
| federal bail _often_ works, and in SDNY particulary.
| AlexandrB wrote:
| The real Effective Altruism is the altruism we gave ourselves
| along the way.
| [deleted]
| gumby wrote:
| There's an interesting ethical dilemma and it must apply to lots
| of cases.
|
| It seems obvious that nobody should benefit from the results of
| their crime.* But if the accused is innocent until convicted,
| shouldn't it be OK to spend the ill gotten gains on their
| defense? After all, if they win the gains were legitimate, and by
| induction they were legit until conviction.
|
| How is this circle squared in practice?
|
| * this principle is more easily stated than enforced. Some places
| don't allow convicted criminals to earn any money from writing a
| book about their crimes (this rule seems reasonable) but where
| does it end? Apparently Bernie Madoff got respect in prison for
| the magnitude of his theft. That was a benefit of sorts...
| njovin wrote:
| This is basically what civil forfeiture is designed for
| (although it's being severely abused). The cops arrest you and
| seize all assets that are suspected of being used in or
| obtained by the suspected crime.
|
| This has been heavily abused in California and elsewhere [1][2]
| to seize assets from marijuana dispensaries or "suspected drug
| criminals". Cops seize product and money, never file charges,
| and then let the business owners fight for months/years to get
| their property back (often times with the seized product having
| long since expired), despite no charges having been filed.
|
| IMO it's an egregious violation of the 4th amendment and it's
| maddening that more isn't being done to stop the practice.
|
| [1] https://reason.com/2022/02/04/a-california-sheriff-
| remains-f... [2]
| https://www.newyorker.com/magazine/2013/08/12/taken
| dragonwriter wrote:
| > This is basically what civil forfeiture is designed for
| (although it's being severely abused).
|
| No, this is basically what _criminal_ forfeiture, and
| freezing assets potentially subject to it, is designed for.
|
| _Civil_ forfeiture was _designed for_ trade protectionism in
| the British Empire, but then it became an end-run around
| criminal process in the US, particularly around Prohibition.
| [deleted]
| sshine wrote:
| Portfolio diversification
| eternalban wrote:
| Forbes has carved a uniquely slimely niche for itself. (These
| days I almost look at a Forbes promotion of a startup as a
| negative signal.) At the bottom of that article there are "more
| from Forbes" stories on the (now) 'bad bad' Sam. Search for
| Forbes articles from before the reveal for "more from Forbes"
| stories which I guess they didn't have room to link to in the
| bottom.
|
| (Naturally pointing out Forbes' role in pimping Sam Bankman-Fried
| in no way is supporting the 'wunderkind' or his & co.'s fraud.)
| [deleted]
| jayess wrote:
| The FTX bankruptcy trustee will be able to claw it back as an
| avoidable transaction.
| shapefrog wrote:
| The FTX bankruptcy trustee will charge $18 million in fees to
| claw back that 10 mil
| TacticalCoder wrote:
| > The FTX bankruptcy trustee will charge $18 million in fees
| to claw back that 10 mil
|
| $18 m? I thought they charged $700 m to claw back money in
| the Madoff case. (I may be off by one order of magnitude
| though). People in charge of these claw backs are thieves too
| and they go for easy money, legally, with the benediction of
| the state, at the expense of people who've been scammed.
| vkou wrote:
| The FTX bankruptcy trustee is charging $18 million in fees
| (or however much he's charging) to run a team of people who
| have been auditing and unfucking FTX's and Alameda's books
| for the past four months, and will continue to for a long,
| long while going forward.
|
| He's not paid $18 million to deal with any _single_ problem
| with the money of a firm that kept no ~books, but had >100
| offshore shell companies to conceal the flow of money, and a
| million people screaming at it that they are owed money. He
| and his team is paid to deal with the whole thing.
|
| Also, about $10 million of that has been legal fees. [1]
|
| [1] https://www.cnbc.com/2023/02/08/ftx-bankruptcy-fees-
| near-20-...
| djbusby wrote:
| And Dad is a Law Professor. Hope he's not teaching the ethics
| course.
| jeffbee wrote:
| Has anyone ever studied ethics at Stanford? As far as I can
| tell the subject is not required. CS undergrads must fulfill a
| "Technology in Society" requirement but it can be satisfied
| with bullshit like "Technology Entrepreneurship", a series of
| guest lectures by VCs, which is almost the opposite of studying
| ethics.
|
| Nothing about a university that would let Condi Rice serve as
| provost screams "ethics", frankly. Their history is not one
| that suggests a strong ethical culture.
| fullstop wrote:
| I've known a few people who have taught ethics courses. None of
| them were ethical by any stretch of the imagination.
|
| Maybe I've just met a bad batch.
| Veen wrote:
| There are studies that show ethicists are no more ethical
| than the general population.
|
| https://www.tandfonline.com/doi/full/10.1080/09515089.2012.7.
| ..
|
| > However, on no issue did ethicists show unequivocally
| better behavior than the two comparison groups.
|
| https://www.tandfonline.com/doi/abs/10.1080/09515089.2019.15.
| ..
|
| > Our results indicate a successful replication of the
| original effect that ethicists do not behave any morally
| better compared to other academics across the vast majority
| of normative issues.
| mrguyorama wrote:
| How can they claim any could have "unequivocally better
| behavior"? What is their ground source of truth for morals?
| GalenErso wrote:
| Well, asking the ethicists if the ethicists are acting
| ethically would not be unbiased.
| sidewndr46 wrote:
| Why would anyone expect this in the first place? It'd be
| like expecting the pastor to be more or less religious, or
| more moral than his following. Ultimately they are just
| going to be a single sampling of the population, which
| means they have a pretty reasonable probability of being
| average.
| [deleted]
| gjm11 wrote:
| I would in fact expect pastors to be more religious on
| average than their congregations[1], though not
| particularly more moral. And I would expect professional
| ethicists to be more interested in ethics than the
| population at large, though again not particularly
| _better_.
|
| [1] It would depend a bit on what sort of pastor and what
| sort of congregation.
| colpabar wrote:
| Well idk about you but if I wanted to learn karate I
| would find an instructor who is better at karate than the
| average person to learn from.
| tsgagnon wrote:
| We are talking about being taught in an academic context,
| not a practical context. So, a better analogue might be
| that you wouldn't necessarily expect a martial arts
| historian to be better at the application of martial arts
| than the average person.
| dmurray wrote:
| I think I would?
| boeingUH60 wrote:
| Ehn, yes. If I see the pope in a strip club, I'll be damn
| shocked, but not if I see a random catholic. The
| difference is that the latter is a random member and the
| former is the literal face of his church, so he has to
| abide to certain tenets or at least pretend to.
| capableweb wrote:
| Well yes, I think the usual intuition is that the people
| who preach something (religiously or not) should be
| better at what they are preaching than the ones they are
| preaching to. Right or wrong, I think that's a pretty
| common presumption to make.
|
| Might be small sample, but that sample is also biased to
| have a lot of knowledge about what they are preaching
| (supposedly), meaning they put higher importance about it
| compared to other things.
| nathan_compton wrote:
| ???
|
| You'd expect Pastors or Ethicists to be more
| moral/ethical because they spend a lot of time thinking
| about being moral/ethical compared to members of the
| general population. Seems pretty intuitive to me.
| AnimalMuppet wrote:
| I'd expect ethicists to have thought more about ethics
| and morals. I wouldn't necessarily expect them to be more
| moral or ethical. As C. S. Lewis says in _The Abolition
| of Man_ , it's not theorems that make the difference when
| the chips are down.
|
| Pastors... it depends on the pastor. Is it a job, or
| something they actually believe? Is it just a theory to
| them, or do they have any actual power helping them live
| it out?
| nathan_compton wrote:
| Ok, so imagine that everyone has the about the same
| propensity to make the correct ethical decision when
| faced with a circumstance. You might expect there to be
| some number of circumstances for which the lay person may
| be wrong about the appropriate ethical decision and thus
| fail to make it correctly, whereas the ethicist would be
| better prepared for such. If this were the case, then
| you'd expect ethicists to be more ethical despite having
| the same ethical character as regular people.
|
| In fact, on this interpretation, if we find ethicists are
| no more ethical, then we must conclude they are actually
| _less_ ethical than normal people, since they have more
| occasions where they could make an ethical decision but
| do not. Or we have to admit that most ethical quandaries
| are trivial, so that being an ethicists doesn't give you
| any special advantage.
| knodi123 wrote:
| Kinda like how marriage therapists have slightly higher
| divorce rates than the national average?
|
| https://psychcentral.com/pro/do-marriage-family-
| therapists-h...
| jeffrallen wrote:
| And IT people can't get the printer to work either?
| 0cf8612b2e1e wrote:
| Makes sense to me. I suspect most people are not quick to
| end a bad marriage, and will hold out hoping things will
| improve. Marriage therapists might be more likely to act
| on a bad situation and extricate themselves from it.
| notch898a wrote:
| I wonder if fundamental ethical values are mostly absorbed
| in childhood or through genetic instinct. At some point it
| seems most people would just use greater knowledge of law,
| ethics, etc to either become better at arguing why what
| they did was right or wrong or use the details to get
| better at not getting caught. Teaching a grown adult to
| internalize a new value system would appear quite difficult
| from my observation.
| throwawaysleep wrote:
| I have not met many people who wouldn't compromise their
| ethics for some benefit. This is especially true if they
| think nobody will find out. So I am not sure there are
| fundamental ethical values.
| repomies69 wrote:
| Also, the tendency to do so depends on your financial
| status. Poor people will happily sell thei ethics, those
| who are more well off don't have to.
| djbusby wrote:
| The situation we're discussing involves wealthy folk
| doing unethical things.
| fullstop wrote:
| I'd argue that the opposite is more common. People who
| are well off can often feel that they are entitled to
| things.
| mellavora wrote:
| I've usually seen the opposite.
| Zetice wrote:
| You've got to know where the line is to teach people not to
| cross it!
| bee_rider wrote:
| Yeah for most of us, ethics is more of a "know it when you
| see it, don't get to close to the line" sort of thing.
| Although there definitely are hard ethical question out
| there, so the study of it is good, they just don't show up
| that often in day-to-day life.
| r00fus wrote:
| Naturally Voldemort cosplaying as a "defense against the dark
| arts" instructor was clearly an implication that regulatory
| capture is way to hide power.
| rootsudo wrote:
| "None of them were ethical by any stretch of the
| imagination."
|
| At least they know the course material well. Isn't that the
| reason why you're _really_ enrolling in the class for?
| [deleted]
| [deleted]
| [deleted]
| mahart wrote:
| On his staff page he's described as a "leading scholar in the
| field of tax law". Maybe he was the one that got FTX on
| QuickBooks after having been paid for 11 months there.
| watwut wrote:
| Ethics course is not supposed to make you better person. It
| teaches you some theories relevant to law practice and
| regulations layers are under.
| skeeter2020 wrote:
| If I was a student in his ethics course it would be a great
| opportunity to practice grilling a hostile witness
| bradleyjg wrote:
| [flagged]
| causality0 wrote:
| Because "gave" could encompass a wide variety of transactions
| and "gifted" is a specific one.
| stevenpetryk wrote:
| Gifting is a subset of giving.
| lovich wrote:
| I'd think that gift is slightly different in this situation in
| that a gift severs control completely vs theoretically you can
| give someone an item with the expectation of getting it back.
|
| It's really splitting hairs though, what is your problem with
| the word gifted? I've never seen someone critique it's use
| before
| gwd wrote:
| It's not _slightly_ different at all. If I say, "The server
| at the restaurant gave the man a fork", would you think the
| man expected to walk away with the fork?
|
| Or to put it differently: Depositors gave money to FTX, which
| gave the money to Almeda Research, which gave the money to
| SBF, who gave it to his father. But only one of these four
| transactions was a gift.
| chatmasta wrote:
| Maybe because "gift" has a specific meaning in the tax code,
| especially with money transfers that involve immediate family
| members. No idea if that's why Forbes is using that language
| though.
| welder wrote:
| To me, using Gift implies his father wrote it off on taxes as
| part of his lifetime gift exemption ($12.06 million). It just
| means SBF gave $10M to his father and his father didn't have to
| pay taxes on that money because he reported it as a gift.
|
| It doesn't add much to the story though.
|
| Edit: Thanks to comments below I found out the sender pays the
| tax if over $12.06M not the receiver of the gift.
| seren wrote:
| Just a random bit of information but I am clearly astonished
| by the amount of the American gift exemption !
|
| In France, as far as I know, it is $150kEUR every 10 years to
| your children only.
|
| Edit : above it has to be integrated to your income tax IIRC,
| paid by the receiver only.
| ianferrel wrote:
| It's tied to the estate tax exclusion. The first
| ~$12million of estate isn't taxed, and you can give that
| money away before or after you die.
| loeg wrote:
| The gift exemption is for the giver, not the recipient of a
| gift. Recipients don't pay gift taxes in the US; givers do.
| s1artibartfast wrote:
| This is not quite correct. If you receive a large cash gift
| you may be subject to income tax on that money. This is a
| separate issue from The Gift Giver claiming a deduction on
| their taxes. The gift tax is a transfer tax, and my
| understanding is that it could be paid in theory by either
| party.
|
| Most people don't want to pay income tax or a windfall tax
| on the gift so it makes more sense for the Giver to pay the
| transfer tax
|
| https://www.irs.gov/businesses/small-businesses-self-
| employe...
| loeg wrote:
| The IRS link you provided supports what I said.
|
| > The donor is generally responsible for paying the gift
| tax. Under special arrangements the donee _may_ agree to
| pay the tax instead.
|
| The lifetime exemption on gifts and annual exemption on
| gifts are thresholds for the giver; not the recipient of
| the gift.
|
| > If you receive a large cash gift you may be subject to
| income tax on that money.
|
| This is more or less not true? Other than the (very
| weird) situation of agreeing to pay the gift tax, as the
| recipient you generally do not owe income taxes on the
| gift. If you were gifted something that generates income
| (e.g., stock or rental property), you will owe tax on
| that income after you receive it.
| dragonwriter wrote:
| > To me, using Gift implies his father wrote it off on taxes
| as part of his lifetime gift exemption ($12.06 million).
|
| The gift exemption and gift taxes apply to the giver, not the
| recipient. (The gift and estate tax are effectively one
| combined tax.)
| jjulius wrote:
| >Why do we need gift as a verb all of a sudden?
|
| All of a sudden? I'm in my 30's and "gifting" as a verb has
| been pretty commonplace for as long as I can remember...
|
| Is there something inherently wrong with that?
| renlo wrote:
| Same, nothing about the verbiage struck me as odd. Perhaps
| the Germans in here think SBF has poisoned his father?
| afhammad wrote:
| tax exemption
| Kognito wrote:
| You may be around 400 years too late to this battle,
| apparently.
|
| https://www.merriam-webster.com/words-at-play/gift-as-a-verb
| yamtaddle wrote:
| Webster's 1913 lists only the sense:
|
| Gift, v. t. [imp. & p. p. Gifted; p. pr. & vb. n. Gifting.]
| To endow with some power or faculty.
|
| Your link notes that much older examples exist for "to give
| as a gift", but also that it wasn't popularized until the
| 1990s, probably by Seinfeld. Might be why it strikes
| bradleyjg as odd--it _was_ unusual until fairly recently, so
| one is unlikely to encounter it used that way in older media.
|
| [EDIT] Are the downvotes because readers are taking the
| "probably by Seinfeld" as my own speculation? It's not, it's
| from the parent's link.
| vasco wrote:
| Despite other arguments, even taking at face value that
| gift as a verb was popularized in the 1990's, why are you
| fighthing about language which at the worst, has been in
| common parlance for nearly 30 years, and if we take other
| sources, even longer?
| yamtaddle wrote:
| Who are you responding to? I wasn't fighting about
| anything.
| vpribish wrote:
| Jumps out at me too - it's a meme spreading all over the online
| discussion world. not that it's improper use or a new idea or
| anything, but it's become really popular in the last several
| months. It is a useful nuance - signifying that ownership has
| transferred, not just possession. But, also _cringe_ it seems
| like a lot of users are trying so so hard to fit in with the
| cool trendy kids.
| refulgentis wrote:
| This isn't new...
| smoe wrote:
| I don't know about trends, but might also have something to
| do with non-native English speakers. In at least some other
| languages clearly distinguishing between to give and to gift
| is very common.
| chrisdhoover wrote:
| We give presents and we present gifts. He gifted me a
| bitcoin has always sounded weird to me.
|
| It is a shortcut though. He gave me a bitcoin should be
| good enough. One may want more specificity. He presented me
| a bitcoin gift. Or he gave me a bitcoin present. Gifted
| makes the point quickly even if it grates on me.
| caseysoftware wrote:
| Whoa.
|
| My GUESS is that since he's being prosecuted for fraud, et al,
| they can't say these were illegally obtained (innocent until
| proven guilty) and therefore they can't seize the funds yet.
|
| And if the lawyers are in on it, they're over billing and keeping
| building an escrow fund that would go back to one of them at the
| end.
|
| The scumminess is rather impressive.
| nradov wrote:
| Prosecutors might not be able to immediately seize assets,
| however if they have evidence that those assets were obtained
| through criminal activity then they can ask the court to freeze
| the assets pending the outcome of a criminal trial.
| TacticalCoder wrote:
| > And if the lawyers are in on it, they're over billing and
| keeping building an escrow fund that would go back to one of
| them at the end.
|
| The ones in charge of the bankruptcy are also bleeding the
| customers and investors dry. They charged $700 million in the
| Madoff case. There are $10 bn missing here. It's not
| unthinkable they'll steal 10% of that.
|
| They are vermins, just as scummy as SBF. But it's legal.
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