Feds charge crypto lobbyist linked to former FTX executive with campaign finance crimes

MANHATTAN (CN) – Federal prosecutors on Thursday unsealed an indictment accusing convicted former FTX executive Ryan Salame's girlfriend of receiving illegal campaign contributions during her unsuccessful bid for a New York congressional seat in 2022.

In the four-count indictment, authorities say cryptocurrency lobbyist Michelle Bond, 45, illegally financed her campaign with hundreds of thousands of dollars wired to her from Salame. She then lied to the House Ethics Committee about the origin of those campaign funds, they say.

Salame pleaded guilty in September 2023 for his role in a conspiracy to make unlawful political contributions and defraud the Federal Election Commission, as well as in a conspiracy to operate an unlicensed money transmitting business.

Sam Bankman-Fried, the disgraced former FTX founder, was also accused of involvement in those conspiracies. Salame is not named in Thursday's indictment and is instead referred to as "CC-1," with "CC" short for "co-conspirator."

In the indictment, prosecutors say that Salame — former CEO of FTX Digital Markets, an FTX subsidiary based in the Bahamas — orchestrated a sham consulting agreement between Bond and FTX. Under that fake agreement, they say Bond was paid $400,000, money she then used that money to illegally finance her congressional campaign.

“Lets do 100k a year then with a signing bonus of 400k,” Salame said in a text message exchange with another FTX employee. Prosecutors say the conversation — quoted in the indictment — shows Salame working out the terms of the sham consulting agreement.

Prosecutors claim that from the outset, money from Salame bankrolled Bond’s campaign expenses. Those expenses including payments to two political consulting firms, as well as to a vendor who helped with signature-gathering.

Bond ran as Republican primary candidate in the 2022 midterms to represent New York's 1st Congressional District, which Republicans have held for nearly a decade.

The district covers much of the eastern portion of Long Island, including most of Suffolk County. Bond ultimately lost in the Republican primary, receiving 27% of the vote.

Bond on Thursday appeared before U.S. Magistrate Judge Ona Wang, who released her on a $1 million bond. Her criminal case is being handled by the public corruption unit of the U.S. Attorney’s Office for the Southern District of New York and has been assigned to Senior U.S. District Judge George Daniels, a Bill Clinton appointee.

In the trial of FTX CEO Sam Bankman-Fried, prosecutors said Salame made more than $20 million in contributions to Republican campaigns in his own name. Bankman-Fried separately made $40 million in donations to Democratic campaigns in order to improve his personal standing in Washington, D.C., increase FTX’s profile and curry favor with candidates that could help pass legislation favorable to FTX.

According to OpenSecrets.org, a nonpartisan group that tracks campaign spending via Federal Election Commission filings, Bankman-Fried was the second-biggest Democrat-leaning megadonor in the 2022 election cycle. Salame’s campaign donations likewise made him the 16th top individual contributor from 2021 to 2022.

Despite his guilty plea, Salame did not cooperate with prosecutors’ case against Bankman-Fried — making him the only major FTX co-conspirator to not take a deal. After standing trial in Manhattan federal court in March, Bankman-Fried, who was ultimately sentenced to 25 years in prison.

Hoping for lighter sentences, co-defendants Caroline Ellison, Nashad Singh and Gary Wang each testified against Bankman-Fried at his trial. All three are currently awaiting sentencing.

Although Bond's indictment was not unsealed until Thursday, it was first filed on Monday.

In anticipation of his girlfriend's looming indictment, Salame — who in May was sentenced to around seven years in prison — on Wednesday asked U.S. District Judge Lewis Kaplan, another Clinton appointee, to void his guilty plea or block Bond’s indictment. Prosecutors had reneged on a deal to drop any investigation of Bond if he agreed to plead guilty, he argued.

Judge Kaplan will hear oral arguments on Salame's petition to vacate on September 12th. The Department of Justice quickly replied to Salame’s petition, casting his assertions as “factually baseless and legally meritless.”

“Salame resorts to inaccurate, incomplete, and outright false assertions in an effort to evade his serious sentence for his involvement in an illegal campaign finance scheme that was unprecedented in scale, and for his role in funneling billions of dollars through an unlicensed money transmitting business,” assistant U.S. Attorney Danielle Sassoon wrote in a scathing reply letter.

Also in the reply letter, prosecutors said that during a meeting with Salame’s attorneys in May 2023, they "spelled out, for the avoidance of any doubt,” that a guilty plea from Salame would not stop any ongoing investigation into Bond’s conduct.

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