Peter Easton testifies in ongoing trial of FTX founder Sam Bankman-Fried
![Peter Easton](https://news.nd.edu/assets/544494/peter_easton.jpg)
University of Notre Dame Accountancy Professor Peter Easton on Wednesday (Oct. 18) testified in Manhattan federal court in one of the largest fraud cases in the history of the United States — the trial of disgraced FTX founder Sam Bankman-Fried, now in its third week.
Bankman-Fried, who says he never intended to defraud customers, has pleaded not guilty to two counts of fraud and five counts of conspiracy. Prosecutors say he looted billions of dollars in FTX customer funds.
Easton, who previously worked on other high profile cases including Enron, WorldCom and Parmalaat, was hired by the U.S. Department of Justice to provide a detailed analysis of the exchange of billions of dollars between FTX and its sister hedge fund, Alameda Research. He examined whether balances in actual bank accounts matched those in FTX’s internal ledgers in an effort to explain what happened to $9 billion in FTX customer funds missing in June 2022, months before the company filed for bankruptcy.
The director of the Center for Accounting Research and Education and the Notre Dame Alumni Professor of Accountancy at the Mendoza College of Business, Easton specializes in corporate valuation and financial statement analysis. He told the court, “I teach, essentially, penetrating financial statements.”
When asked if his analysis showed the use of customer funds, Easton said, “Oh yes.”
During his extensive testimony, Easton revealed the amount in Alameda Research and FTX’s accounts was far less than what was owed to customers of FTX. He found that $11.3 billion in FTX customer funds should have been held at Alameda, but only $2.3 billion were actually in its bank accounts and that Alameda used the assets for its own expenditures.
Easton said, “Customer funds were used in various ways,” including investments, political contributions, charity foundations and real estate purchases, backing prosecutors’ claims that Bankman-Fried funneled money from his FTX customers into Alameda for those purposes.
Using numerous charts and graphs he created, Easton showed that more than $400 million of customer funds were sent to hedge fund Modulo Capital. He said, “It is only customer funds. It did not come from anywhere else.”
He also traced $70 million of investor funds in real estate throughout the Bahamas, including Bankman-Fried’s luxury penthouse, and showed that millions of dollars in customer funds from FTX’s exchange was donated to a super PAC benefiting Democrats. He showed that a large sum of customer funds went to Modulo Capital through an investment made by Alameda and said FTX customers’ crypto assets were used to help repay a loan Alameda received from Genesis Capital.
The defense is set to begin presenting its case on Oct. 26 (Thursday). Bankman-Fried faces decades in prison if convicted.
Latest Faculty & Staff
- ND Expert: Will ‘Brat Girl Summer’ translate into an autumn of Democratic victories? ‘It’s anybody’s guess’In the past three days, people on social media have embraced British pop star Charli XCX’s online pronouncement that “Kamala IS brat.” According to to Sara Marcus, an assistant professor of English and author of “Girls to the Front: The True Story of the Riot Grrrl Revolution,” that translates to a declaration that Kamala Harris, the Democratic Party’s presumptive new nominee for president, embodies the sort of messy, complicated, casual womanhood that the singer’s recent album, “Brat,” depicts and celebrates.
- Using forest resources strengthens food security, study findsForests can reduce hunger in rural households while also capturing carbon and advancing sustainability goals for low- and middle-income countries, according to new research by Daniel C. Miller, associate professor of environmental policy at Notre Dame’s Keough School of Global Affairs.
- In memoriam: Benjamin Radcliff, professor of political scienceBenjamin Radcliff, a professor in the Department of Political Science at the University of Notre Dame, died June 10 after a long illness. He was 60.
- Jason Rohr wins 2024 International Frontiers Prize for innovative public health and sustainability researchJason Rohr, the Galla Professor and Chair of the Department of Biological Sciences at the University of Notre Dame, is one of three international winners of the 2024 Frontiers Planet Prize for his research that helps improve public health, agriculture, sustainability and poverty in Senegal.
- US states shape foreign policy amid national China unease, research showsState-level officials such as governors, state legislators and attorneys general are shaping U.S.-China relations as the two countries navigate a strained geopolitical relationship, according to new research by Notre Dame political scientist Kyle Jaros.
- Carter Snead testifies before US Senate Judiciary CommitteeO. Carter Snead, the Charles E. Rice Professor of Law and director of the de Nicola Center for Ethics and Culture at the University of Notre Dame, offered expert testimony on Wednesday (June 12) before the U.S. Senate Committee on the Judiciary.