Tag Archives: John C. Coffee Jr.

Martin Shkreli


This post concerns recent news stories about the former hedge fund manager and convicted felon Martin Shkreli, who has been dubbed — with what seems to be meanness characteristic of the press, as well as the public — “The Most Hated Man in America” and “Pharma Bro.”

Last month, Shkreli was sentenced to seven years in prison.

The details of the case do not interest me; however, I have provided some background information below. The purpose of this post is to point out what I regard as being as clear as day, though hardly anyone ever seems to take notice of it:

— that the “criminal justice” system is blatantly unfair, and that this can be seen in disparities in sentencing, in arbitrarily harsh sentences which are supposedly given because a defendant deserves them, but are really imposed just to prove a point, to make an example of a defendant seen us repugnant to judge and prosecutors, or out of plain old-fashioned venom;

— that the way sentences are arrived at, the process by which they are determined and punishment is meted out, shows a travesty of justice occurring.

Draconian sentences, totally uncalled for. Ruining people’s lives. For crimes in which often the actual harm done to individuals or society was minimal. Making examples of defendants whom the system and the public find contemptible, but whose crimes did not result in inflicting damage upon others that by any stretch of the imagination calls for such penalties.

Ganging up on the defendant.

I have already discussed these inequities (and, I should also say, iniquities) in a previous post of mine:

“the punishment of Anthony Weiner”

the punishment of Anthony Weiner



In December 2015, Martin Shkreli was charged with eight counts of wire and securities fraud, stemming from his time running two hedge funds and, subsequently, a pharmaceutical company, Retrophin. In August 2017, a jury found Shkreli guilty of three of the eight counts against him: two counts of securities fraud and conspiracy to commit securities fraud.

Prior to his sentencing in March of this year, Shkreli had been in jail for approximately six months. In September 2017, during the time that he was out on bail awaiting sentencing for his fraud conviction, federal judge Kiyo A. Matsumoto revoked Shkreli’s bail and remanded him to prison. The reason? He had made two Facebook posts offering cash to anyone who could “grab a hair” from Hillary Clinton during a book tour. “On HRC’s book tour, try to grab a hair from her,” Shkreli had written, referring to Ms. Clinton. “Will pay $5,000 per hair obtained from Hillary Clinton.” Prosecutors requested that his bail be revoked. Shkreli was remanded by Judge Matsumoto to the Metropolitan Detention Center, Brooklyn, a notorious prison.

Metropolitan Detention Center Brooklyn is known as a horrible place to be incarcerated. It is a “much harsher prison than one might expect a first time offender not guilty of violent crime to be sentenced to. He’s in the worst prison that he’ll ever be in, considering the charges he was convicted of,” a defense lawyer told a New York Post reporter covering the story.

Clinton had criticized an egregious price increase by Shkreli of the drug Daraprim — an anti-malarial and antiparasitic drug used to treat patients with AIDS-related and AIDS-unrelated toxoplasmosis — by 5,000 percent, to $750 per pill, when he was CEO of Turing Pharmaceuticals, a company he founded.

Judge Matsumoto said that Mr. Shkreli’s Facebook post could be perceived as a true threat. She said that it was “solicitation to assault in exchange for money that is not protected by the First Amendment.”

Mr. Shkreli edited the post to say that he had meant it to be satirical, and he later took it down altogether, but prosecutors contended that there was a risk that one of Mr. Shkreli’s social media followers would take the post seriously and act on it. They noted that Shkreli had also made a sexual threat toward a female journalist on Twitter.

In my opinion, Shkreli’s behavior was aberrant and ill considered, but he did not represent a “threat” and did not deserve to spend six months in the worst prison in New York City awaiting sentencing. I repeat: did not represent a “threat.” Anyone with an iota of common sense could have seen that.

Except for the judge.



Regarding Shkreli’s sentencing last month, the following is a digest of articles in The New York Times and other newspapers.

The prosecutors had sought a sentence of at least 15 years. The defense had pushed for 12 to 18 months. This glaring disparity alone demonstrates how divorced from any idea of fairness or reasonableness — from considered judgment — the “criminal justice” system is. They belong in Laputa.

As she imposed the sentence, Judge Matsumoto said that Shkreli seemed “genuinely remorseful,” but he “repeatedly minimized” his conduct, including in statements and emails after his conviction.

Mr. Shkreli’s lawyers noted that he had ultimately paid back his investors, meaning there was no financial loss. Judge Matsumoto rejected that argument, citing legal precedents establishing that fraud losses cover property whether or not it is returned. She ruled that Mr. Shkreli would also have to forfeit $7.36 million to the government to cover his fraud. The judge also imposed a fine of $75,000, separate from the $7.36 million in forfeiture that she had ruled that he must pay, after noting that his net worth was $27.2 million.

During and after his trial, Mr. Shkreli’s behavior online exacerbated his plight. As the proceedings wrapped up, for instance, he wrote on Facebook that if he were to be acquitted, he would be able to have sex with a female journalist he often posted about online. It was one of several posts that prosecutors cited in a pre-sentencing submission in which they argued that any remorse Mr. Shkreli claimed to feel was only for show. [This is a stretch. What prosecutors were doing was cherry picking to find any behavior, including frat boy type humor, to pin on Shkreli in hopes of making him appear deserving of a harsh sentence.]

In deciding the sentence, Judge Matsumoto pored over dozens of letters from Shkreli’s supporters and recounted his “lonely” childhood and abusive parents. “I do believe he is genuinely remorseful for the betrayal of the trust of investors,” she said. “Although he is convicted of fraud, I do believe he is truly a kind and generous person.”

But ultimately, Matsumoto decided that his conviction was the result of an “egregious multitude of lies.”

“This is a serious crime. I do feel that time is necessary to protect the public,” she said. [Seven years? Protect the public? From what? I am a member of the public. Should I be thankful that the judge is looking out for me. That Shkreli is in jail where he can do me no harm?]

Shkreli’s lawyers asked for a more lenient sentence of 12 to 18 months with community service — insisting that he was remorseful and a changed man. His lawyer Benjamin Brafman implored the judge not to sentence Shkreli “simply for being Martin Shkreli.” Prosecutors wanted at least 15 years, which the defense blasted as “draconian.”

“What motivates Martin Shkreli is his own image,” said prosecutor Jacquelyn Kasulis. “He can’t just be an average person who fails, like the rest of us. He needs to be mythical. He needs to be larger than life. He wants everyone to believe that he is a genius, a whiz kid, a self-taught biotech wonder, the richest man in New York.” She cited a psychiatrist’s report that found Shkreli “cannot tolerate failure and instead will lie and rationalize his failures to perpetuate his self-image.” [Ms. Kasulis, probably ten times worse a person than Shkreli, here assumes the self-appointed role of psychiatrist while looking for skeletons in the closet.]

Before she adjourned court, Judge Matsumoto encouraged Mr. Shkreli to continue teaching inmates, as he had already been doing in jail. [Does this not warm the cockles of one’s heart? Meant to be taken as sarcasm.]



In a recent New York Timesarticle:

“Shkreli vs. Holmes: 2 Frauds, 2 Divergent Outcomes. Were They Fair?”

By James B. Stewart

The New York Times

March 22, 2018

Mr. Stewart, a well known business writer, commented retrospectively on Shkreli’s sentencing. He compared two recent cases, one of them Shkreli’s, that were similar in terms of the alleged crimes, but in which there seems to be a disparity in sentencing. (The other case has not been resolved.) He stated:

Few white-collar defendants have been more reviled than the man known as the Pharma Bro, Martin Shkreli, even before he was convicted on multiple counts of securities fraud. The Atlantic called him “the perfect and very hateable combination of arrogance, youth, and avarice,” after he gained notoriety for acquiring the rights to generic drugs for rare diseases and then jacking up the prices.

Mr. Shkreli was convicted of fraud for his activities at two hedge funds he ran, not for anything related to drug pricing. [Shkreli’s attorney] argued that Mr. Shkreli eventually repaid all of his investors, and some realized large gains. Still, a jury ultimately found Mr. Shkreli guilty on three counts — acquitting him on five others — and this month he was sentenced to seven years in prison.

Stewart goes on to discuss the case of Elizabeth Holmes, the founder of the Silicon Valley blood-testing start-up Theranos, who in March 2018 was accused (along with the company’s former president) by the Securities and Exchange Commission of masterminding a “massive fraud” at Theranos. “… the relatively lenient treatment she’s gotten so far,” Stewart says, “compared with Mr. Shkreli’s seven-year prison term, provokes the question: Is this fair?”

The article quotes John C. Coffee Jr., a professor at Columbia Law School who teaches classes on white-collar crime. He told Stewart: “Typically you get more sympathy from the criminal justice system if you’re an attractive young woman than a brash, arrogant young male.”

“At the heart of both cases are lies,” Stewart notes. “At Mr. Shkreli’s sentencing, federal Judge Kiyo A. Matsumoto referred to Mr. Shkreli’s ‘egregious multitude of lies,’ and the same might be said of Ms. Holmes. But the financial consequences of her deceptions were in another league. Judge Matsumoto said it didn’t matter that Mr. Shkreli later repaid the investors he defrauded, or that some of his investors made millions.”

“In theory,” Stewart concluded, “Mr. Shkreli’s well-publicized bizarre antics, both in and out of court, should have had no bearing on his guilt or sentence. As Mr. Brafman [Shkreli’s attorney] put it in his opening statement, Mr. Shkreli shouldn’t be found guilty for being ‘ ‘odd,’ ‘weird,’ or having a ‘dysfunctional personality.’ But prosecutors cited his behavior to assert in closing arguments that he ‘had no respect for the law.’ At his sentencing, Judge Matsumoto suggested his actions called into question whether his purported remorse was genuine.”



I have a dream, a fantasy. Call it a vision. Of lawyers, prosecutors, and judges sitting down together for a confab, actuated by pure — the highest — motives; concerned that in dealing with miscreants, they do what’s right and best — not for them, their reputations, or careers; not necessarily what others think is right — but what is right in the eyes of God. And, that they take it as a solemn obligation to do the least harm to all concerned (or affected by the case), including the defendant. That, if they deem punishment necessary, its severity be no more than seems required, and that, rather than treating sentencing as a game where the outcome (years sentenced) is treated as a football score in which one side claims victory and exults in it — measuring success or failure by how severely the miscreant was or was not punished — on the contrary, sentencing would entail gravity and sober mindedness in deliberations as well as a desire for fairness, justice, and no more, so that justice is really served, with full attention given to all parties and Christian forgiveness is not, in principle, regarded as obsolete or irrelevant.

And, that prosecutors forbear a natural inclination to do all they can to blacken defendants — in short, trash them — and portray them in the worst possible light, solely for the sake of achieving “victory,” with scant regard, if any, for facts of the crime which do not fit their predetermined conclusions, or for possible extenuating circumstances, or what kind of person the defendant really is, and whether redemption or rehabilitation is possible. With no thought whatsoever given to possible consequences for the defendant’s family, relatives, or loved ones.

Here’s how my wife put it: “cruel and sad, and not just.”


— Roger W. Smith

   April 2018



See also my post:

“crime or indiscretion?”

crime or indiscretion?