It is accurate from the perspective the investors actually made a lot of money out of him. Matt Levine sums it all up very well:

https://www.bloomberg.com/view/articles/2015-12-17/martin-sh...

In short his hedge fund tanked, he started some new companies, retrospectively backdated the shareholding of the new company to make his loss making investors from the previous failure shareholders, that company ended up being successful and floated, those investors made a lot of money.

But everything about what he did to make that possible is entirely dodgy/illegal.

Since Shkrelli made his investors whole by fraudulently putting more of his own money into the fund, are the investors then on the hook for paying back the money that Shkrelli 'stole' from himself?

Not sure, but my instinct would be no. If you pay a shopkeeper with a stolen dollar bill, does the shopkeeper have to give it back?

Not to you but to the person you stole it from, yes. The underlying legal principle being that though you had the item, you never had the legal control of its ownership, and thus although you transferred the item the original owner retained legal control of it.

Is this true? My instinct is that the person who stole it is still directly on the hook, but I'm not a lawyer.

Intuitively I'd think it's different for cash and goods. A stolen TV used in a barter transaction show of be returned. A dollar bill probably not. But 100k cash? Grey area? if you accept a dollar you can't reasonably be expected to do due diligence on it. But a large sum maybe.

You might have a case against the shopkeeper if you could prove they have the specific bill that was stolen from you.

Being in receipt of stolen property is a crime even if you are unaware it is stolen.

Instincts is not how laws work. You instincts might tell you what is just, but that's not necessarily what is committed to laws.

America is based on common law. It is a pretty cool concept. Law was built up out of what peoples' customs and shared moral conventions were when a judge or jury made a judgement in trials between people. From English tradition. Most counties not descended from English law have this tradition. Law statues passed by governments overlay this older system.

If pawn broker purchases stolen good does the original owner have a right to recover their stolen goods without buying them back? (yes)

That's not even related; currency follows different rules than goods, at least partially because it's fungible.

Yea, the authorities will confiscate the stolen bill and use it as evidence, and then give it back to the original owner.

But is his lawyer correct that forfeiture shouldn't occur in a situation like that?

That I dunno. If no one has been left out of pocket, one could argue that there is nothing to return. Who or what are they compensating if no party suffered a material loss?

I think the relevant quote from the judgment is: 'criminal forfeiture serves no remedial purpose, [and] is designed to punish the offender...'

So they don't actually care about compensation, they just have the right and want him to bleed.

Penalties in these cases are based on losses suffered, and there were no losses.

The US government is attempting to make an example out of Shkreli.

If it was true that both no one was unjustly deprived and Shkreli had no direct or indirect gains (gross, not net of, say, separate criminal acts with offsetting effects taken together) for any of the individual crimes he was convicted of, it would seem to be accurate that the standards of the criminal forfeiture statute would not be met.

OTOH, that doesn't actually seem likely to be true.

Shkreli was convicted of fraud not theft. His lawyer could also say that Shkreli didn't actually kill anyone.

Is the seizure of assets a punishment or restitution?

Right. Society saying fraud is illegal with minor consequences, is an invitation to commit fraud. What I don't like is how disproportionate the DOJ is with individuals vs big companies. Shkreli will get fined into oblivion, the equivalent for the tobacco, sugar, and personal credit agencies would be cutting them in half, or maybe even their destruction.

One person went to jail for the global financial crisis. Keep that in mind when judging Shkreli, who made everyone whole.

Anyone go to jail at Equifax? Most definitely not, and that’s upended the credit system.

That's my point. Individuals committing fraud, few or not people hurt and they throw the book at you and take all your stuff. Whereas these big corporate wrong doings that have very negatively impacted people's lives pretty much get a yawn.

Has it actually upended the credit system yet?

I wouldn't put it past the credit industry to find a way to profit at further cost to consumers.

It's true, his case is interesting in that there really was no victims. It was a victemless crime. Still a crime however.

His lawyer is very careful in his statements not to say that.

Investors in Retrophin made a lot money. They would have made more if Shkreli had not committed fraud. His lawyer’s argument is basically that the investors made money and it doesn’t matter that Shkreli used the company as his piggy bank, issuing shares, thus diluting investors, and writing checks to settle his debts and make whole the investors in his previous hedge fund.

There were victims. Victims who made a lot of money, but would have made more if Shkreli hadn’t committed fraud.

Yes, but he wasn't convicted of fraud against his Retrophin investors, he was convicted of fraud against his previous investors (the ones he paid with Retrophin money). So it's peculiar to use the Retrophin investors as justification for seizing his assets.

Its a victemless crime because he got lucky. If the whole scheme tanked, the fraud would be more obvious. I'm not sure the distinction is relevant.

If you knock over a liquor store and the register is empty, seems to me its still a crime even if you didn't make off with anything.

But if I leave more money in the register than it contained to begin with, what are the damages that must be covered by forfeiture?

I guess its closer to stealing from the register and leaving a lottery ticket that happen to be a winner. Still seems perfectly convictable to me.

> I guess its closer to stealing from the register and leaving a lottery ticket that happen to be a winner.

Yes, this is a better analogy.

> Still seems perfectly convictable to me.

The question, though, isn't whether he should go to jail; I think he should. It's whether he should lose his assets to the government (I think he shouldn't).

Breaking into the store and breaking open the register are crimes even if you leave more money in the register.

Compensation for the psychological harm you've caused the teller as well as the law enforcement resources who were dispatched to the scene? Whether I'm right or wrong is irrelevant... at a certain point, these tangents don't contribute much to the top level case

But to not prosecuted would set a bad example for the many future occasions where the front won't work out in the investor's favor.

How can something be a crime if there are no victims?

If I slam on my brakes while driving on the freeway, throw my car into reverse, and manage to get home without hitting anyone, I’ve still broken the law. I think we want to sanction dangerous behavior regardless of outcome. That Shkreli didn’t lose his investors’ money is luck and should have nothing to do with his punishment for doing something that could well have lost people money.

Crime (criminal liability) is violation of statute. Civil liability is based on harm caused. It's been this way for a long time.

Its something like this. Say a person burnt his house, the house is razed to ashes. There is nobody killed, nobody injured or let's say nobody was even present at home.

The house was insured, but the owner doesn't claim insurance either.

Despite all this. No insurance scam and no harm to anybody. But still the guy setting fire to his own home will considered a arsonist.

Not true. Arson requires malicious intent / lack of consent.

It's unfortunate that questions which invite clarification and education are constantly downvoted on HN.

I have been following this for a while and was always amused that no one lost money. The actual witness the prosecution brought forward made money. It's why I believe this whole affair is for Public Consumption. They need to hang someone and he became a target. It didn't help that he couldn't just let his lawyer handle everything. He would have probably avoided jail and payed a small fine.

Attempted murder is still a crime, even if no one was hurt. Similarly, fraud is still a crime even if no one lost money.

The purpose of the law is to discourage situations that were deemed likely to yield harm, regardless of whether the victims lucked out this particular time.

Consider a drunk cab driver for example. No one is hurt, and the passenger is home in one piece. Still should be a crime, no?

I think much of the discomfort comes from the fact that white collar crime typically goes unpunished. (How many CEOs went to jail after the financial crisis?) There is the perception, warranted or not, that Shkreli was prosecuted simply because he stands out, which would be unjust.

Interesting point. I think his punhishments may be just, the real injustice is that other white collar criminals are not punished with the same tenacity as Shkrelli.

> They need to hang someone and he became a target.

Ayup. If they don't hang him, they might have to go after somebody actually important in the pharmaceutical industry.

> It didn't help that he couldn't just let his lawyer handle everything.

Shkreli seems to be just absolutely, preternaturally unable to shut the fuck up.

He's probably got toxoplasmosis

It seems at best dubious to claim that the frauds which funded the company of which Shkreli was CEO did not personally benefit Shkreli, directly or indirectly, so I'd say on first impression it doesn't seem likely to be accurate (it may be legitimate as an argument in the sense of not being an interpretation entirely ruled out by the evidence, however.)