This is according to Ellison's testimony before a federal court in downtown Manhattan. Ellison, who at the time of the alleged events was serving as the CEO of Bankman-Fried's personal hedge fund Alameda Research, was brought in as the star witness of the prosecution in the trial against Bankman-Fried. (Related: Sam Bankman-Fried directed executives to COMMIT FRAUD for him, including donating over $10 MILLION to Biden.)
Ellison testified that Bankman-Fried directed her to lie to lenders and falsify the books of his cryptocurrency trading platform FTX to cover up how billions in customer deposits and investor funds were being siphoned off to Alameda Research.
In her testimony, Ellison noted that her company Alameda "was in a risky situation," but Bankman-Fried did not want to work to bring the hedge fund out of financial ruin because doing so could "make FTX look very bad."
"People would be concerned about keeping their money on FTX," she added, which is why she said that Bankman-Fried told her to "come up with some alternative ways to present the information in the balance sheet."
Bankman-Fried received seven different sets of balance sheets and Ellison testified that he settled on the one that hid borrowing from FTX into other categories to make the balance sheet appear cleaner.
"Yes, I did consider it to be dishonest," she said. "It falsely stated the amounts of our accurate assets and liabilities. It hid the fact we were borrowing billions of dollars from FTX customers."
Falsifying FTX's and Alameda Research's financial statements did not improve the financial situation of either company and the tactics Bankman-Fried directed his executives to use to cover up losses ended up involving bribing Chinese government officials to unlock funds frozen on a Chinese exchange on Alameda Research's trading accounts.
According to Ellison, she and other executives "used various strategies to move funds out of our frozen accounts," starting with attempting to negotiate with Chinese government officials through lawyers, which proved unsuccessful.
Next, Ellison said the FTX and Alameda team attempted to access the funds illicitly by setting up fictitious exchange accounts using the IDs of women she believed to be "Thai prostitutes."
When this tactic didn't work, Ellison said they resorted to just outright bribing Chinese officials with cryptocurrency. The payments to Chinese officials amounted to around $150 million.
Ellison described how, at one point, an employee whose father was a Chinese government official objected to the plan during a meeting with Bankman-Fried. In response, he allegedly became increasingly irritated and eventually told the employee to "Shut the f--- up."
Ellison confirmed in an internal memo in Alameda titled "State of Alameda" that the payment was executed by November 2021, with the payment hidden as a $150 million loss "from the thing," and the loss placed under a section outlining "notable/idiosyncratic" financial events.
Learn more about Sam Bankman-Fried's crimes at CryptoCult.news.
Watch this clip from ABC discussing how Sam Bankman-Fried's parents, Joe Bankman and Barbara Fried, have also been accused of taking millions in stolen funds from customers.