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- FTX lawyers are suing Sam Bankman-Fried's parents, saying they were wrongly paid millions.
- The lawsuit says SBF's mom encouraged him to avoid federal campaign finance disclosure rules.
- Lawyers for SBF's parents have called the lawsuit's allegations "completely false."
Sam Bankman-Fried's mom encouraged him to donate millions to politicans — including to a PAC she chaired — via other FTX executives, according to a lawsuit seen by Insider.
Lawyers handling the crypto exchange's bankruptcy case are suing Bankman-Fried's parents, Joe Bankman and Barbara Fried, accusing them of siphoning millions of dollars from company funds.
That includes a $10 million gift which lawyers say has been used for Bankman-Fried's legal defense, and a $16.4 million beachfront house in the Bahamas. FTX's lawyers are hoping to recoup that money to help pay back customers.
The lawsuit also accuses Fried of encouraging her son to "avoid (if not violate) federal campaign finance disclosure rules."
Back in February, prosecutors said Bankman-Fried funneled $100 million in political donations through executives who acted as "straw donors" — named in reports as Nishad Singh and Ryan Salame. The money was intended to "weed out anti-crypto" politicians and gain favorable influence without appearing too partisan, according to prosecutors.
Singh and Salame have pleaded guilty to campaign finance violations.
Monday's lawsuit, which was filed in the Delaware Bankruptcy Court, suggests Fried played a role in these violations.
Discussing a donation to Mind the Gap, a Democratic PAC she co-founded and chaired until last November, Fried told her son: "I would counsel strongly against giving in a disclosed form under your own name," per the suit.
"You could get Nishad or Caroline to contribute to the PAC some of the total amount you are willing to give, but that has its own costs and risks," she added, according to the court document.
FTX lawyers say that Singh and Bankman-Fried contributed "tens of millions of dollars to MTG or MTG-supported causes" at his mom's "explicit request."
Sean Hecker and Michael Tremonte, attorneys for Bankman and Fried respectively, called the lawsuit's allegations "completely false" in a joint statement sent to Forbes.
Tremonte did not immediately respond to Insider's request for comment, sent outside US working hours.