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>When fraud happens those affected don't usually get their money back much less a return on that money. That will be a footnote at sentencing. Federal sentenc

>When fraud happens those affected don't usually get their money back much less a return on that money. That will be a footnote at sentencing. Federal sentencing is generally based on intended or actual loss, whichever is greater. Further, the judge is allowed to take into account intended losses from his entire course of conduct, not just the intended losses from the specific counts on which he was found guilty. In other words, the fact that his investors lost no actual money will have little bearing on his sentence. I don't know what the actual amount he took in was, but he will be sentenced for a multimillion dollar fraud scheme, and because he went to trial and lost, he'll get nowhere near the minimum. The government likes to punish people for making them expend the time and effort of a trial (in 2012, 97% of federal cases ended with a guilty plea instead of a trial [1]). He's probably looking at 5 years at best. [1] https://www.wsj.com/articles/SB10000872396390443589304577637610097206808 https://www.wsj.com/articles/SB10000872396390443589304577637...

artursapek 9y ago
It will be interesting to see the sentence. He definitely seems to disagree with you: https://twitter.com/SamTheManTP/status/893552820548403201 https://twitter.com/SamTheManTP/status/893552820548403201 Q: How much time do you likely face? Shkreli: Uh I'm guessing none on the short side 6 months long side
- downandout 9y ago
  I could see that he was expecting something like that based upon his press conference outside the courthouse. I think he's in for a very rude introduction to the concept of "intended loss" and the federal sentencing system in general.
  - artursapek 9y ago
    Not claiming any knowledge on the subject, just wanted to back up suggestions of his expectations with evidence. We'll see what happens. Personally I'm rooting for him, I think he's misunderstood.
    - gaadd33 9y ago
      I'm curious, what part of his message is misunderstood to you?
      - artursapek 9y ago
        I just think he's generally misunderstood and undeservedly hated. While I don't dispute he committed crimes and should be punished for that, it's compounded with his existing bad reputation over the completely legal and unremarkable Retrophin move. There's been a massive smear campaign against him and he has been unjustly dragged through the mud over that. Granted his social awkwardness and attention seeking threw a lot of fuel on that fire, so he's partially at fault for encouraging it. But if you look past those immature antics he's a smart and productive member of society. It would be a shame, in my opinion, if he winds up in prison for several years. I think a fairer sentence would be a big fine and parole.
turc1656 9y ago
I disagree. I think it will be a major factor at sentencing. First the fact that he did give them their money (with a significant return on it) back to the people well before the government got involved (meaning it wasn't a PR show) to me means there was never any intent for them to actually lose money. I think the judge will see it the same way. Because if that weren't true, he would never have repatriated the money back to pay them out. He would have just said "oops, I lost it" and continued about his regular business. As much as I dislike the guy, I do believe he didn't want to rip the people off, he wanted to try to salvage what he could to make himself look good get them their money. He just chose a deceptive, illegal manner in which to do it. Also, harm/damage is a big consideration in sentencing. He broke the law, yes. But usually a violation of the law in this regard results in substantial losses. Because it did not here, the only damage is his violation of his contractual obligation to provide money back to those who said they wanted to cash out. By holding the money, he deprived them of their rightful property as per the contract they signed when they invested with him. And considering they would have a real hard time beating his returns, proving any sort of tort injury is essentially impossible. This leaves only the statutory violation, meaning he amazingly didn't necessarily harm anyone or their property but rather just broke the law. Given the lack of injury to the victims of his crime, I think he's likely to see a very light sentence.
- artemisyna 9y ago
  If you don't mine me asking, are you actually a lawyer or are you just speculating?
  - turc1656 9y ago
    Definitely not a lawyer. Total speculation on my part. I am just trying to come to some sort of logical conclusion about how the judge might approach sentencing, using my limiting knowledge of law.
- downandout 9y ago
  Let me start by saying that what you are saying probably should be the way it plays out in this case. Everyone seems to have made money. I was just stating how it actually plays out in the vast majority of federal cases, and will likely play out here. In this case, because of the amount involved, the guidelines will call for a substantial prison sentence (well over 5 years). There is actually a loss table (again, we're talking about the "intended loss") that determines a certain number of points for the loss [1] (plus 7 points for the "base offense level"), and that number of points is then used with the sentencing table [2] to determine the sentence. The judge is of course free to depart up or down from the guideline sentence, but the sentencing range determined by those tables will be the starting point. The odds that he will receive no prison time at all after having gone to trial and lost are effectively zero. The judge will likely cut him some kind of break because nobody actually lost anything - his lawyers will argue that he showed remorse after the fact by eventually making his victims whole - but that will have a minor effect at best. My best guess, having watched many of these things play out, is 4-6 years. [1] https://www.ussc.gov/guidelines/2016-guidelines-manual/2016-chapter-2-c#2b11 https://www.ussc.gov/guidelines/2016-guidelines-manual/2016-... [2] https://www.ussc.gov/guidelines/2016-guidelines-manual/2016-chapter-5 https://www.ussc.gov/guidelines/2016-guidelines-manual/2016-...
dragonwriter 9y ago
> In other words, the fact that his investors lost no actual money will have little bearing on his sentence AFAICT, the Retrophin investors lost actual money. The losses came out of gains and reduced them, and they still had net gains from Retrophin, but they lost money to the fraud.
- ThrustVectoring 9y ago
  Isn't Mr. Shkreli one of those Retrophin investors, too? Like, he could have made his defrauded hedge fund clients whole out of his stake in Retorphin, rather than from Retrophin as a whole.
- slavik81 9y ago
  This is what really confuses me. I haven't found a source that actually specifies what specifically he was found guilty for. At least one of the charges was about defrauding Retrophin investors, but he was found not guilty on several charges, so it's hard to tell. Quotes like this make me think that he was found not guilty on that charge: > Shkreli said during a press conference after the jury's announcement that he was "delighted by the verdict" since he was found not guilty on a key charge regarding his former drug company Retrophin. http://www.businessinsider.com/martin-shkreli-verdict-securities-fraud-trial-2017-8 http://www.businessinsider.com/martin-shkreli-verdict-securi...
matt_wulfeck 9y ago
> The government likes to punish people for making them expend the time and effort of a trial While I understand why this is true, I hate it about our legal system. If you're not guilty then you shouldn't be coerced into a plea because of the draconian maximum punishment they hold over your head. This is evident nowhere more clearly than drug convictions, where they can lock you up for the rest of your life because you're doing something they don't like.
- literallycancer 9y ago
  It's probably even simpler - the conviction is the deliverable produced by a prosecutor, and the thing that moves their career forward. So they are incentivized to always go for the harshest possible punishment, in the same fashion that a company chooses profits over everything else. The system isn't malicious, it's just not designed to counteract this sort of thing.
- ams6110 9y ago
  Prosecutors don't charge people if they aren't fairly confident that the evidence will result in a conviction. However they will also be willing to bargain for a plea to save the effort and expense of a trial. This lets them get more cases through the system in less time. They (or the police) might also try to pressure a suspect to confess, just to see if he will. That saves them even more time. So bottom line, you should never admit or confess to anything. If the prosecutor has enough evidence, he'll probably start with an offer of a plea deal. If his evidence is marginal, he might try to get a plea but likely won't bring charges if he thinks his chances in court are iffy. If you go to trial anyway, in the face of strong evidence against you, then you've probably lost your chance at a light sentence, modulo how good a defense you can afford.
  - wavegeek 9y ago
    > Prosecutors don't charge people if they aren't fairly confident that the evidence will result in a conviction. Yes they do. They throw a huge array of charges, provable or now, at people with the intent to scare them. Punishing people for refusing to plead guilty should be a crime.
Dylan16807 9y ago
What's the definition of "intended" here? I would not normally say that someone desperately covering up business failures as they keep running it intends there to be any loss.

artursapek 9y ago

It will be interesting to see the sentence. He definitely seems to disagree with you: https://twitter.com/SamTheManTP/status/893552820548403201 https://twitter.com/SamTheManTP/status/893552820548403201 Q: How much time do you likely face? Shkreli: Uh I'm guessing none on the short side 6 months long side

downandout 9y ago
I could see that he was expecting something like that based upon his press conference outside the courthouse. I think he's in for a very rude introduction to the concept of "intended loss" and the federal sentencing system in general.
- artursapek 9y ago
  Not claiming any knowledge on the subject, just wanted to back up suggestions of his expectations with evidence. We'll see what happens. Personally I'm rooting for him, I think he's misunderstood.
  - gaadd33 9y ago
    I'm curious, what part of his message is misunderstood to you?
    - artursapek 9y ago
      I just think he's generally misunderstood and undeservedly hated. While I don't dispute he committed crimes and should be punished for that, it's compounded with his existing bad reputation over the completely legal and unremarkable Retrophin move. There's been a massive smear campaign against him and he has been unjustly dragged through the mud over that. Granted his social awkwardness and attention seeking threw a lot of fuel on that fire, so he's partially at fault for encouraging it. But if you look past those immature antics he's a smart and productive member of society. It would be a shame, in my opinion, if he winds up in prison for several years. I think a fairer sentence would be a big fine and parole.

turc1656 9y ago

I disagree. I think it will be a major factor at sentencing. First the fact that he did give them their money (with a significant return on it) back to the people well before the government got involved (meaning it wasn't a PR show) to me means there was never any intent for them to actually lose money. I think the judge will see it the same way. Because if that weren't true, he would never have repatriated the money back to pay them out. He would have just said "oops, I lost it" and continued about his regular business. As much as I dislike the guy, I do believe he didn't want to rip the people off, he wanted to try to salvage what he could to make himself look good get them their money. He just chose a deceptive, illegal manner in which to do it. Also, harm/damage is a big consideration in sentencing. He broke the law, yes. But usually a violation of the law in this regard results in substantial losses. Because it did not here, the only damage is his violation of his contractual obligation to provide money back to those who said they wanted to cash out. By holding the money, he deprived them of their rightful property as per the contract they signed when they invested with him. And considering they would have a real hard time beating his returns, proving any sort of tort injury is essentially impossible. This leaves only the statutory violation, meaning he amazingly didn't necessarily harm anyone or their property but rather just broke the law. Given the lack of injury to the victims of his crime, I think he's likely to see a very light sentence.

artemisyna 9y ago
If you don't mine me asking, are you actually a lawyer or are you just speculating?
- turc1656 9y ago
  Definitely not a lawyer. Total speculation on my part. I am just trying to come to some sort of logical conclusion about how the judge might approach sentencing, using my limiting knowledge of law.
downandout 9y ago
Let me start by saying that what you are saying probably should be the way it plays out in this case. Everyone seems to have made money. I was just stating how it actually plays out in the vast majority of federal cases, and will likely play out here. In this case, because of the amount involved, the guidelines will call for a substantial prison sentence (well over 5 years). There is actually a loss table (again, we're talking about the "intended loss") that determines a certain number of points for the loss [1] (plus 7 points for the "base offense level"), and that number of points is then used with the sentencing table [2] to determine the sentence. The judge is of course free to depart up or down from the guideline sentence, but the sentencing range determined by those tables will be the starting point. The odds that he will receive no prison time at all after having gone to trial and lost are effectively zero. The judge will likely cut him some kind of break because nobody actually lost anything - his lawyers will argue that he showed remorse after the fact by eventually making his victims whole - but that will have a minor effect at best. My best guess, having watched many of these things play out, is 4-6 years. [1] https://www.ussc.gov/guidelines/2016-guidelines-manual/2016-chapter-2-c#2b11 https://www.ussc.gov/guidelines/2016-guidelines-manual/2016-... [2] https://www.ussc.gov/guidelines/2016-guidelines-manual/2016-chapter-5 https://www.ussc.gov/guidelines/2016-guidelines-manual/2016-...

dragonwriter 9y ago

> In other words, the fact that his investors lost no actual money will have little bearing on his sentence AFAICT, the Retrophin investors lost actual money. The losses came out of gains and reduced them, and they still had net gains from Retrophin, but they lost money to the fraud.

ThrustVectoring 9y ago
Isn't Mr. Shkreli one of those Retrophin investors, too? Like, he could have made his defrauded hedge fund clients whole out of his stake in Retorphin, rather than from Retrophin as a whole.
slavik81 9y ago
This is what really confuses me. I haven't found a source that actually specifies what specifically he was found guilty for. At least one of the charges was about defrauding Retrophin investors, but he was found not guilty on several charges, so it's hard to tell. Quotes like this make me think that he was found not guilty on that charge: > Shkreli said during a press conference after the jury's announcement that he was "delighted by the verdict" since he was found not guilty on a key charge regarding his former drug company Retrophin. http://www.businessinsider.com/martin-shkreli-verdict-securities-fraud-trial-2017-8 http://www.businessinsider.com/martin-shkreli-verdict-securi...

matt_wulfeck 9y ago

> The government likes to punish people for making them expend the time and effort of a trial While I understand why this is true, I hate it about our legal system. If you're not guilty then you shouldn't be coerced into a plea because of the draconian maximum punishment they hold over your head. This is evident nowhere more clearly than drug convictions, where they can lock you up for the rest of your life because you're doing something they don't like.

literallycancer 9y ago
It's probably even simpler - the conviction is the deliverable produced by a prosecutor, and the thing that moves their career forward. So they are incentivized to always go for the harshest possible punishment, in the same fashion that a company chooses profits over everything else. The system isn't malicious, it's just not designed to counteract this sort of thing.
ams6110 9y ago
Prosecutors don't charge people if they aren't fairly confident that the evidence will result in a conviction. However they will also be willing to bargain for a plea to save the effort and expense of a trial. This lets them get more cases through the system in less time. They (or the police) might also try to pressure a suspect to confess, just to see if he will. That saves them even more time. So bottom line, you should never admit or confess to anything. If the prosecutor has enough evidence, he'll probably start with an offer of a plea deal. If his evidence is marginal, he might try to get a plea but likely won't bring charges if he thinks his chances in court are iffy. If you go to trial anyway, in the face of strong evidence against you, then you've probably lost your chance at a light sentence, modulo how good a defense you can afford.
- wavegeek 9y ago
  > Prosecutors don't charge people if they aren't fairly confident that the evidence will result in a conviction. Yes they do. They throw a huge array of charges, provable or now, at people with the intent to scare them. Punishing people for refusing to plead guilty should be a crime.

Dylan16807 9y ago

What's the definition of "intended" here? I would not normally say that someone desperately covering up business failures as they keep running it intends there to be any loss.