More Gloss — On Those “Sham” Consulting Agreements…

Shkreli-Hassan-06-29-17In good conscience, I cannot (yet) post the context for these below statements, since Mr. Greebel is still on felony criminal trial, in Brooklyn — and it is not (yet) completely clear that the able Judge Matsumoto will allow the AUSAs all they are asking here, by letter.

And so, obviously, I do not want to taint anyone’s jury. [The full letter will come in due time.]

That letter (which I will release here in full, after the verdict) was filed by the capable AUSAs overnight, on a Saturday, no less (all the more remarkable, since the trial was on hiatus on Friday) to counter some oddball lines of questioning by Mr. Greebel’s lawyers, on cross, when they do cross-examine the relevant MSMB investors (each of whom also testified at Marty’s trial). It seems the defense’s questioning (as was likewise attempted in Mr. Shkreli’s trial) will seek to misdirect the jury, and blame the fraud victims, as an escape hatch from criminal guilt here.

Here’s the portion that most fascinated me — about Marty — and strikes me as absolutely correct:

“…Moreover, although defense counsel in the Shkreli trial argued that investors profited from their investments, that argument was raised to show that Shkreli had acted in good faith and, as a result, lacked an intent to defraud the investors as charged in Counts One through Six, in which the investors were the victims. The argument was not offered to show Shkreli lacked intent to defraud Retrophin as charged in Count Seven, in which Retrophin was the victim….”

Note that no matter how one slices it, the company ultimately called Retrophin (and earlier known as Desert Gateway) saw its assets misappropriated by Marty (and, it is alleged, aided by the lawyer now on trial) — for essentially no benefit to that company, when Marty paid off his former MSMB investors — with Retrophin stock.

Namaste — and now, go back to bed all you copper-hued twisty long-legged divas orbiting Jupiter — as it’s an extra hour of shut eye for me, too… smile.


25 thoughts on “More Gloss — On Those “Sham” Consulting Agreements…

    • condor says:

      Okay. It seems old Marty doesn’t understand that his remand to custody order also serves as a restraining order of sorts, as well. The able Judge Matsumoto referred to his threats of non-consensual sexual contact with this same journalist, when she ordered him into custody.

      The AUSAs will offer this letter in January 2018 at his sentencing — as yet more evidence that he regards all of this as a joke.

      My take is that writing this letter likely cost him an additional year in the can, when sentenced.

      He’s had a few months already to reflect, and understand that this sort of conduct by a convicted felon will be punished.

      Yet — to quote a meme — “he persists.”

      The guy is going to do a decade, in total.

      And Ms. Smythe making jokes about it is… well, a quite sad reflection… on her own clearly dubious judgment, in my opinion.

      Here endeth the rant.

      Liked by 1 person

      • aldt440 says:

        “Okay. It seems old Marty doesn’t understand that his remand to custody order also serves as a restraining order of sorts, as well. The able Judge Matsumoto referred to his threats of non-consensual sexual contact with this same journalist, when she ordered him into custody.”

        I’m shocked! You’re telling me a program that only works 30% of the time isn’t working?
        Quite frankly, I’m disturbed that the prison warden doesn’t understand stewardship responsibilities or that a duty of care is owed to Duca. Let’s be honest, this letter shouldn’t have been released and Shkreli is only partially culpable for any harm Duca suffers..

        “The AUSAs will offer this letter in January 2018 at his sentencing — as yet more evidence that he regards all of this as a joke.”

        What good is this going to do? So they’re enhancing his sentence for a warden’s mistake? Eventually they’re going to have to let him out and there is a 70% chance he will be even more screwed up. Statistics show that the longer he’s in there, the less likely he will be successful reintegrating into society – European penal models understand this, why can’t we? Based on my observations, the bulk of his grievances are rooted in the relationship between his conviction and moral turpitude. In other words, he sees families like the Clintons and Slackers get away with everything and he’s indignant. I don’t necessarily subscribe to his ideologies, but I do understand his position. Throwing Clinton and the Slackers in prison would probably help him get better!

        “He’s had a few months already to reflect, and understand that this sort of conduct by a convicted felon will be punished.”

        Since you obviously don’t follow up on any of my links, I suggest you do research regarding the efficacy of the penal system. You’re taking a specious position here. Prisoners don’t necessarily reflect and repent; there is a plethora of statistics and scientific studies to prove my point. You’re focusing on a symptom and not the root of the problem. Please stop perpetuating this garbage.

        Here’s what’s next if Shkreli still doesn’t get it. I can assure you that the guards are hurting themselves and their loved ones just as much as their victim:

        There’s a point where punishment is no longer productive and actually detrimental to society. I think that point is where people trying to punish monsters turn into monsters themselves.

        Liked by 1 person

      • condor says:

        Last I checked, the convict is an adult. He is 100 per cent (a la Roy Moore) responsible — for HIS OWN conduct. He designed the whole thing to try to once more insult and belittle Ms. Duca. He gets no “warden”s fault” pass here. That’s preposterous. He’s a warden, not a junior high hall monitor; Shkreli is no wayward 14 year old.

        The warden’s first priority is — and should be — the safety of the guards; keeping violence tamped down. Shkreli owns 100% of his own (once again criminal) conduct.

        I may agree about the European model of incarceration, but Marty committed his felonies here in the US of A. Can’t have the best capital market in the world, without accepting our legal system.

        So give the blame shifting a rest, okay?


        Liked by 1 person

      • aldt440 says:

        Hahahahahaha. So the Secret Service determined that Shkreli was ssooooo dangerous that they enhanced Clinton’s security detail… and the Warden doesn’t feel it is necessary to screen his mail????? Where are my taxes going?

        Liked by 1 person

      • FTD says:

        Condor, I think he’s going to get more than a extra year. I think all the screenshots will be spread out of all the times he thought this was a joke. 🙂

        Liked by 1 person

      • condor says:

        Oh I think he’ll get ten, overall — maybe eleven, now. Thanks, FTD!

        [And a fond hello, to Music City, as of 10:04 and 10:21, this morning. Quite a Macy Gray, to you. . . Smile.]


  1. R West says:

    News article: “Shkreli Investors Recount Few Dealings With Ex-Katten Atty”

    Here’s my Greebel case predictions:

    Count 7: Prosecution can’t show a conspiracy on consulting, so Judge throws Count 7 out before it even goes to the jury.

    Count 8: Probably convicted in trial court based on conspiracy with Shkreli, but Second Circuit will overturn unless it can be shown that Greebel wasn’t acting within the scope of his attorney role. It could even go to the U.S. Supreme Court … a little surprised AUSA’s would pursue such a novel, tough case. Sounds like he should have been charged with “aiding and abetting” rather than conspiracy.

    Liked by 1 person

    • R West says:

      One of the leading aid & abet cases is in the 2d Cir: United States v. Reifler, 446 F.3d 65, 96-7 (2d Cir. 2006)(“[A] defendant may be convicted of aiding and abetting a given crime where the government proves that the underlying crime was committed by a person other than the defendant, that the defendant knew of the crime, and that the defendant acted with the intent to contribute to the success of the underlying crime. To prove that the defendant acted with that specific intent, the government must show that he knew of the crime, but it need not show that he knew all of the details of the crime, so long as the evidence shows that he joined the venture, that he shared in it, and that his efforts contributed towards its success.”

      Don’t understand why Gov’t. left that out … unless they felt like they needed to charge Shkreli with a substantive crime also for “parking” shares? Which raises another question … why did they not?

      Liked by 1 person

      • condor says:

        Sorry for not saying so sooner, but I think all your legal analysis is solid.

        Well done! As to charging conspiracy rather than aiding and abetting, we haven’t seen all the Greebel emails, by any stretch.

        There may well be far more damning (to this moment, non public) evidence yet to come.

        Namaste — and good morning!


  2. R West says:

    On TV, I just saw former Galleon Group portfolio manager Tim Pierotti on “American Greed” … talking about Galleon.

    What are the odds that your two employers …?

    Liked by 1 person

  3. R West says:

    I’ve wasted a lot of time screwing around with Shkreli and Greebel’s cases, but I’ve learned a lot. Probably the biggest mistake was, in the beginning I knew they were charged with securities fraud, but I didn’t read the Superseding Indictment that closely. To comment on the cases intelligently, one really has to study what crimes specifically they were charged with. But in any event, I’m not the only one that has made that mistake … the journalists still don’t seem to get it, and at some points, even the defendants’ lawyers have seemed a little confused about who was charged with exactly what crime. As Condor says, maybe they were and are trying to misdirect the jury, but there’s also the possibility they are confused about what they are supposed to be arguing!

    Liked by 1 person

  4. R West says:

    Here’s the AUSA’s problem with Count 7:

    * Greebel is charged with conspiracy only.

    * Shkreli was acquitted of the same Count 7 conspiracy; thus, Greebel has argued he can’t be convicted on Count 7, since conspiracy takes an agreement between two people. Judge apparently said (as I recall from Bloomberg article), “I’m not sure that’s wrong, but I think the conspiracy might be with the other people . I want to hear what the testimony will show.”

    * It’s going to be hard to show there was an agreement between Greebel and the investors to commit an illegal act. When a lawyer tells you to do something, you are generally entitled to believe it must be legal. Even though the investors maybe thought the plan was shady, they were also entitled to believe as laymen that it was merely planning around the rules legally – because a lawyer told them to do it. There are scenarios in law where characterizing a deal a desired way in form is legal. All the advice was in the scope of Greebel’s employment as an attorney for Retrophin – it’s not like the employees were dealing in illegal drugs or something they had to know was illegal. One person’s fraud is another person’s strategic planning.

    * Also, in the Kluger case, the Appeals Court said in a different context you have to look to see who gave the illegal plan its initial impetus. The investors didn’t have the idea; it was all Greebel and Shkreli – that’s normally bad, if charged with a substantive crime -but they weren’t charged with a substantive crime … only conspiracy.

    * Greebel may be convicted in trial court, but he has a good chance in the Second Circuit on appeal. State Bar will probably jump in and file an amicus brief to help him out – it’s not a good precedent for the legal profession if an attorney is convicted of conspiracy!

    Liked by 1 person

    • R West says:

      There’s some law review articles written on this, and maybe a little variation in the federal circuits, but basically both parties have to know the object of the conspiracy is illegal: “All conspirators must have the specific intent to commit the objective of the conspiracy. This means that someone who is entirely unaware that he is participating in a crime cannot be charged with conspiracy.” If a lawyer for Retrophin told the investors you need to restructure the repayment as a [sham] consulting agreement, they wouldn’t necessarily think they were committing a crime. Greebel did something illegal, but that’s not a conspiracy unless the Gov’t can show who the other party to the agreement is who knew it was illegal. If Retrophin’s attorney told them to do it, why would they think they were defrauding Retrophin?

      Liked by 1 person

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