According to the newly appointed FTX CEO John Ray III Statement of Support for Chapter 11 procedure on Thursday, Sam Bankman Fried used FTX Group business funds to purchase homes and other personal assets for employees and consultants.

“As far as I know, FTX Group company funds have been used in the Bahamas to purchase homes and other personal effects for employees and consultants,” Ray wrote in the statement.

“Never in my career have I seen such a complete failure of corporate controls and a complete lack of trustworthy financial information as here.”

Also read: New FTX chief appalled at crypto exchange mismanagement under Sam Bankman-Fried

Using business funds for personal expenses is not always prohibited. To do this in the United States, the following entities must either authorize it or not be scammed by it:

• Department of Treasury (IRS, state government, etc.)
• Company owners (shareholders, partners, LLC members, etc.)
• Creditors (creditor rights typically arise in cases of fraud or bankruptcy)

FTX Group is registered in the Bahamas, a country where US tax authorities such as the IRS have no legal authority. Normally, courts carefully review any permission to use company funds for personal use.

Also read: FTX, Bahamas Regulator Fights for Control of Bankruptcy Proceedings: WSJ

A known entity involved Andrew Fastowthe CFO of Enronwho used his own company, LJM Cayman LP, to bill Enron for administrative fees.

LJM Cayman LP slipped millions of dollars into Fastow’s pocket, with Enron reportedly approving it, claiming the deal “didn’t harm Enron’s interests.”

Ray was also responsible for Enron’s liquidation.

Ray went on to point out that FTX employees would only need to submit the request via chat to get professional expenses reimbursed, and a manager would approve it immediately with a personalized emoji.

“The debtors didn’t have the kind of disbursement controls that I believe they…