Archive for the 'Criminal Law' Category

Martin Shkreli Convicted of Fraud

Martin Shkreli is, quite arguably, one of the most hated men in the United States of America. After drawing the ire of the nation a few years back with his choice to increase the price of a critical AIDS drug by around 5770%, followed by a completely remorseless defense of his actions, he has continued to diminish himself in the eyes of the public with a series of–presumably affluenza influenced–publicity stunts flaunting his wealth and lack of sympathy or interest in others. However, it is not his well publicized price jacking that landed him in the courts, it was criminal securities fraud.

The Federal Government had accused Mr. Shkreli of eight different counts of fraud and conspiracy to commit fraud. One charge each of fraud for his handling of two of his hedge funds-MSMB Capital and MSMB Healthcare. These charges essentially charged Mr. Shkreli with running a Ponzi scheme-cheating investors by paying older investors with money from newer ones. There were also charges of conspiracy to commit wire fraud and charges of conspiracy to commit securities. Finally, Mr. Shkreli faced charges for conspiracy to commit wire fraud by using funds from the MSMB hedge funds to defraud a pharma company called Retrophin of which he was CEO–using money from Retrophin to pay back MSMB investors as well as to cover his personal debts.

Martin ShkreliMost of the charges can be boiled down to either Ponzi scheme style investment practices or lying to people to get them to invest in his funds-often in the form of formulating false back stories for himself to match the lives of would-be investors and substantially exaggerating his financial experience and education. He also made a practice of substantially overpromising returns, downplaying risks, and fabricating the financial state of his businesses. For example, prosecutors showed evidence that Shkreli told investors his companies had $80M in the bank when he only had around $11,000. What’s more, when investors asked for their money back, Shkreli would put them off for months while acquire the money to return for them.

Of the charge facing him, Mr. Shkreli was convicted of conspiracy to commit fraud on Retrophin and a count of securities fraud each for both MSMB hedge funds.

Understanding the Charges

Securities fraud is an incredibly broad charge, it can cover innumerable evils. To try to fully explain securities fraud would be to attempt to fit books worth of information into a short article. However, what we can do is look at exactly how fraud is established at a federal level and the additional elements inherent to securities and wire fraud–the charges leveled against Shkreli.

Fraud itself is pretty simple in its elements. However, those elements themselves can be complicated. In order to show fraud you need to show that somebody:

  1. Made a material false statement;
  2. Intended to deceive;
  3. The victim actually and justifiably depended on the statement; and
  4. Depending on the false statement damaged the victim.

A material statement is one that actual impacts the victims decision in taking the action that damages them. So basically, if somebody lies about what car they drive it’s unlikely to change your mind on receiving heart surgery so they wouldn’t be guilty of fraud. Also, if somebody lies and the victim doesn’t believe them, there would be no fraud charges. Reliance on a fraudulent statement needs to be justified, which means that if a reasonable person would never believe or rely on a statement there is no case for fraud. Fraud also does not require an outright lie, there are circumstances where somebody can commit fraud through an intentional complete omission or concealment of a fact or by providing an incomplete truth.

Wire fraud and securities fraud are characterized under the law with the basic fraud elements but with one additional element each. For wire fraud, the fraud must be committed by a mail or wire communication. For securities fraud, the fraud must be in connection with the purchase or sale of securities. This includes Ponzi schemes, lying to investors, insider trading, front running, cooking the books and many more types of fraud–basically anything that seeks to deceive investors in violation of securities law and SEC guidelines or in relation to the sale of stocks and commodities.

You’ve also no doubt noticed that Shkreli is, in addition to his charges, also charged with conspiracy to commit basically all those charges. Conspiracy is another incredibly complicated area of criminal law. However, it can provide an additional charge beyond just the charge for the crime itself. To avoid getting to deep into another topic that could be a series of articles unto itself, conspiracy can be simplified as a situation where two or more people were in agreement to commit a crime. This isn’t enough on its own in most cases. There needs to be at least some action taken towards accomplishing the planned crime. In Shkreli’s case, this relied on collaboration between him and one of his former attorneys in committing his acts of fraud.

Shkreli’s Future

Leading up to the trial, Shkreli was not particular concerned about the case. The day he was indicted he went home and streamed video of himself playing video games. He constantly dismissed the case as ridiculous on social media, describing it as a “witch hunt by self-serving prosecutors” and posting of Facebook-in a post expressing pro-Trump sentiment-the need to “drain the sewer that is the [Department of Justice].”

However, as the verdict against him was read reports describe him as initially visibly shaken. The effects were not long lasting however, he and his lawyer have since described the ruling-dodging five counts-as a victory. Shkreli continued to call the case a witch hunt even after the ruling.

Even with just three of eight counts against him coming back guilty, Shkreli faces as much as 20 years in prison. However, the truth is that it’s very unlikely that he will face the full amount–especially considering his lack of previous criminal history. As of now, Shkreli is out on $5M bail. The three guilty counts also can, and almost certainly will, be appealed.

For now, Shkreli is predictably treating the whole situation as a joke. During the trial, prosecutors characterized Mr. Shkreli as a man who believed himself above the law, his behavior after the ruling tracks with this. Only around an hour after the guilty ruling, he was streaming online telling his followers that any sentence against him would be “close to nil” and predicting a Club Fed situation where he’d play video games and basketball all day for a few months.

There is a fair bit of judicial discretion as to exactly how much time Mr. Shkreli will face and a long way to go before an ultimate end to this case will be reached. However, the weight of being found guilty of fraud-and the repercussions of that decision-seem to have reached Mr. Shkreli not at all. We’ll simply have to wait and see where this case leads and just how hefty the ramifications of Mr. Shkreli’s fraud end up being.

Understanding the Russia Investigation: When Does an Attempt turn into a Crime?

Special Counsel Robert Mueller’s grand jury has begun issuing subpoenas into the June 2016 meeting between the President’s son, son-in-law, second campaign manager, and lawyers from Russia. After Donald Trump Jr. disclosed a series of e-mails about the meeting, critics condemned the meeting as an attempt to commit collusion with Russia.

Although the average American will never be accused of colluding with Russia, an attempt to commit a crime is still a crime under federal and all state law. Regardless of your politics, it’s still good to know where the line between committing a crime and an innocent act is.

Missing Causation

Most crimes have three elements: intent, causation, and the criminal act itself. In order to be guilty of murder, the prosecution must prove that the defendant intended to kill the victim, took steps to kill the victim, and those efforts caused the defendant to die.  For example, Dan wanted to kill Vicky because she broke up with him, so Dan used his car to run her over, causing her death. In that situation, Dan would be guilty of murder.

However, if we removed one of the elements, it would be harder to determine whether Dan was guilty. If we remove the intent element, the murder charge would fail. If Dan hit Vicky with his car, but it was the result of Dan being careless rather than a malicious intent, then Dan would be liable for a wrongful death, but it wouldn’t a murder. Similarly, if we remove the criminal act, Dan would also be off the hook.  If Dan wanted to kill Vicky, but never takes any action, then Dan would not be guilty. Even if Vicky gets struck by someone else’s car, Dan wouldn’t be guilty (unless Dan was somehow involved in the other car hitting Vicky).

The hardest situation to evaluate is lack of causation. Suppose that Dan intended to kill Vicky and drove a car into her. However, Vicky doesn’t die because Dan hit her with a car. Instead, Vicky dies because of medical malpractice by her physician. In this case, Dan’s lawyer could argue that Dan can’t be guilty of murder because his intent and his action didn’t actually cause Vicky to die; the doctor was the one who actually killed her.

So, Dan’s not guilty of murder, right? Dan might not be guilty of murder, but every state would charge him with attempted murder. Since Dan intended to kill his ex-girlfriend and took a substantive step towards killing her, Dan would be found guilty of attempted murder, even if the actual criminal act failed to kill Vicky. Although the doctor’s malpractice was an intervening cause, it was Dan’s car that put Vicky in a position where she needed treatment in the first place.

Russia InvestigationEntrapment

In many sting operations, defendants will claim that the police entrapped them. That is, the police convinced them to commit a crime that they wouldn’t have committed had the police not been involved. For example, suppose that Dan, still mad at Vicky, seeks out an undercover police officer to form a contract to kill Vicky. After Dan pays half the money, the officer arrests Dan and doesn’t kill Vicky. Prosecutors charge Dan with attempted murder and Dan claims entrapment as his defense.

Unfortunately for Dan, he would lose if he claimed entrapment. In order for entrapment to be successful, the police must convince the defendant to commit the crime. Since it was Dan who contacted the officer first, Dan formed his intention to kill Vicky on his own. The fact that Dan fell for a sting operation doesn’t change the fact that it was Dan who initiated the crime. Entrapment would only be successful if the officer somehow convinced Dan into joining an attempted murder of Vicky.

Why do I bring up entrapment as a defense? Before Reince Priebus was terminated from his position as White House Chief of Staff, Priebus argued that the Russians the Trump Campaign meet with had ties to Fusion GPS, the organization that created the original memos linking the Trump Campaign to Russia and funded by the Jeb! Bush campaign and later by Democrats. In other words, Priebus claimed that Trump Jr. was set up by Democrats to take the meeting with the Russians.

Is There Enough to Convict?

Right now, there aren’t enough facts to determine whether the Trump campaign was entrapped. Certainly the chain of emails released by Trump’s son shows that it was the Russians who initiated contact, not the campaign. However, we don’t know if there were any e-mails, phone calls, or other contact prior to the publicly revealed e-mail chain. Only the Special Counsel would know right now if Democrats actually entrapped the Trump campaign or not.

When Should the Criminal Court Get Involved with Family Law?

Most family law cases make it from petition to marital settlement agreement without having to involve the police or a criminal prosecutor. However, there are cases when a partner is abusive, when the children are in danger, or when a partner makes false accusations that could have grave legal consequences. If you’re involved in such a case, when should you go to the prosecutor?

Family Court or Criminal Court

The biggest difference between family and criminal court is that the former is a civil court only. In other words, while it may have the power to referee and resolve disputes between different private parties, its power to punish criminal wrongdoing is extremely limited. The most available option is a sanction, or fine, for disrespectful behavior and potentially limited jail time for contempt of court. Successful contempt pleadings are rare though and sanctions don’t have an adverse effect if the party is extremely rich or extremely poor.

Criminal courts, on the other hand, are designed to find and punish criminal behavior. Police officers can take down statements and make arrests, prosecutors can initiate investigations, and defense lawyers can make constitutional arguments to protect against false accusations. In family court, it is common for parties make accusations and counter-accusations; in criminal court, the defendant will find that type of finger pointing to be unsuccessful.

by VicThe Right Time

So when is the right time to involve police, prosecutors, and criminal courts in a divorce or child custody matter?

In most circumstances, the right time is when the abuse begins. If a partner shoves you against a wall or throws an object at you, you should have the police make a report. If the situation is life-threatening, you should call 911. If you call 911, be sure to tell the dispatcher as much information as possible. These calls are always recorded by the police department, so even if the responding officer makes a mistake, the initial call will reveal any potential inconsistencies. If it’s not life-threatening, consult a family attorney about the best way to file a police report. If the abusive behavior continues, continue making police reports.

There are three important reasons to file a police report against an abuser. First, police reports are almost always admissible evidence in court, so there will be no problem getting the information in front of a judge. Second, in order to obtain a conviction for domestic violence or harassment (depending on your state and county), there usually has to be a pattern of abuse. Constantly making police reports establishes this pattern. Third, it prevents the abuser from filing the charges first. In many abuse cases, the abuser may attempt to accuse the victim first, so that the victim appears to be the abuser instead. Filing a police report first may prevent the abuser from muddying the situation too much.

If you have children and the abuser is your spouse, the dynamic changes. Many spouses are afraid to call the police on their spouse because they do not want their children to see the police arrest a parent of the children. If you believe your life or the life of your children is actually in danger though, seeing a parent arrested is preferable to seeing a parent being abused.

Tennessee Inmates Given Reduced Jail Time If They Get Birth Control

If you were convicted of a drug crime, would you choose between jail time and the ability to have children? This might seem a faux choice, but this is the choice that repetitive criminal defendants in White County, Tennessee face. On May 15, 2017, Judge Sam Benningfield signed an order allowing inmates to receive 30 days credit towards jail time if they would agree to undergo a birth control procedure. Women could “volunteer” for a free Nexplanon implant while men can “volunteer” for a free Vasectomy, a procedure which surgically prevents men from releasing sperm.

Judge Benningfield justifies the option by saying: “I hope to encourage them to take personal responsibility and give them a chance, when they do get out, to not to be burdened with children. This gives them a chance to get on their feet and make something of themselves.” District Attorneys and the ACLU have voiced their objections to what they see as an immoral and potentially illegal choice.

The Dark Past of Compulsive Birth Control

Judge Benninfield is not the first judge to suggest that inmates might be subjected to birth control. In 1927, the Supreme Court legalized compulsory sterilization of the unfit; particularly people deemed “intellectually unfit,” i.e. the mentally ill and those considered retarded. The Buck case opened the door for eugenics and forced sterilization in the United States. Before Buck, only California permitted forced sterilization. Afterwards, many states began legalizing sterilization on prisoners. The practice lost support after Nazi Germany revealed where this line of thinking ended. Subsequently, in 1942, the Supreme Court ruled that a law requiring forced sterilization violated the 14th amendment because it excluded white-collar crimes. However, the original 1927 case which permits legal sterilization was not officially overturned and thus remains “good law” today.

Tennessee’s law is more merciful than the original sterilization laws of the 1920’s and 1930’s. Defendants have a choice of staying in jail for another month or getting out early if they agree to a birth control procedure, a far cry from the forced sterilization which occurred last century. The rationale is also different; where the eugenics of the 20th century believed that crime was in the genes, Judge Benninfield believes birth control would allow defendants to build a stable life without the burden of children that impulsive sex might create.

tennesseeThe Option of Sterilization is Still Outside the Bounds of the Constitution

Despite these differences though, Judge Benninfield’s practices should not be legal. First, why are drug crimes singled out? The 1942 Skinner case struck down a law for an Equal Protections violation because it excluded white-collar crimes. The same logic could be applied here; why are drug crime defendants given this preferential option when sex criminals are not? Although Judge Benninfield’s logic is not based on eugenics and genes like the sterilization proponents of last century, the Judge’s logic seems rooted in assumptions about drug crime defendants. Benninfield’s experience in the courtroom might lend itself to the conclusion that drug users will have babies they cannot take care of, but it is hardly an established fact that an entire county can base public policy on.

Second, the state should not promoting a “choice” where a citizen can lose a fundamental right. A choice implies free will, but if the defendants face jail time, free will is probably already removed from the equation. After Griswold and Roe vs. Wade, privacy and reproduction were established as fundamental rights. Citizens cannot be forced to choose between additional jail time and losing a fundamental right. Even if Judge Benninfield doesn’t believe there is any coercion here, the mere perception of state coercion ought to be enough to shut this program down. This is not to say that a defendant who is older and does understand the consequences of

Third, it is not a judge’s responsibility to instill personal responsibility in a defendant. Judges are not life coaches. Judges are supposed to apply the law to a case and then determine whether the law is being complied with. Everything else is potentially legislating and should be left to the actual legislatures. Even if it were part of a judge’s role to promote personal responsibility, offering state sanctioned birth control is not a form of personal responsibility. Personal responsibility, in part, means accepting the consequences of your actions. Shrinking jail time or not having a child after unprotected sex is skirting personal responsibility, not promotion of personal responsibility.

Why Are the Guys Given More Severe Birth Control?

There is also an equal protection issue based on sex. While women are given Nexplanon, men undergo a Vasectomy. For those not well-versed in birth control procedures, Nexplanon is a type of hormone inserted in a woman’s arm that creates a wall around the woman’s eggs, preventing sperm from entering the egg. Nexplanon is good for about four years, when the effects expire.

Vasectomy, on the other hand, is a surgical procedure where a vessel near a man’s testicle is surgically cut, thereby preventing the man from releasing sperm when he has an erection. Vasectomy is considered permanent birth control, although there are some procedures which can reverse it. An appeal court should ask, why are women given a temporary form of birth control while the men are subject to a more permanent one? There is no reasonable justification why one sex is given a more permanent form of birth control when the crimes are all similar.  Although the differences between male and female bodies might demand different types of birth control, one sex should not be subjected to a more permanent form then the other sex.

OJ Simpson is Granted Parole After Serving 9 Years for Armed Robbery

Famous ex-football player OJ Simpson succeeded just last week in a parole hearing before the Nevada Board of Parole Commissioners. As famous as his football days are, Mr. Simpson is obviously more famous these days for the criminal murder trial in which he was involved and ultimately found innocent. However, after an kidnapping and armed robbery conviction in 2007, OJ still found himself imprisoned-albeit for an entirely different reason. Now, with 9 years having passed on his sentence, he was finally up for parole.

The crime that Mr. Simpson was convicted of dealt with a conflict over sports memorabilia. In September of 2007, Mr. Simpson apparently led a group of men–armed with guns–into a Las Vegas hotel room to take hundreds of items of sports memorabilia he stated belonged to him. After these events, a jury convicted Mr. Simpson of two counts of kidnapping with a deadly weapon, robbery with a deadly weapon, assault with a deadly weapon, and coercion with a deadly weapon as well as tree counts of conspiracy and one count of burglary with use of a deadly weapon.

After the trial, Mr. Simpson became inmate No. 1027820 at Lovelock Correctional Facility in Nevada and has been serving his sentence since these convictions. In July 2013, Mr. Simpson was paroled on his burglary count as well as all the counts of robbery and kidnapping. However, the 9 year minimum before he was eligible for parole had not come up on his other counts. Now, with the required time passed, the time had come for Mr. Simpson to get a parole hearing and a chance to rejoin society.

OJ SimpsonFour Parole Board commissioners out of the seven members of the board convened to hear his parole. With a minimum of four votes required for parole, a unanimous vote was required for OJ to get out. Fortunately for Mr. Simpson, this is exactly what happened. Now it’s just a waiting game for Mr. Simpson, he has been moved to protective custody and should be a free man as soon as early October of this year.

Mr. Simpson is obviously ecstatic about the decision, as he should be. Regardless of what somebody has done, the ultimate goal of prison is to rehabilitate as many people as possible. Where somebody has done their time and proved they are not a threat to society they should be released. While some may point to Mr. Simpson’s criminal history, a history is not a guarantee of how the future will unfold. Criminal history is also not the only element parole boards commonly consider in determining whether parole should be granted. If you face criminal charges or have a loved one who has been convicted, it is crucial to fully understand how these parole hearings work. For that reason, let’s take a look at how parole hearings work.

How Parole Hearings Work

Parole is basically the opportunity to serve the remainder of your sentence under the supervision but outside prison. When or if somebody will become eligible for parole varies based on the conviction but often occurs after about a third of a sentence is served.

The factors considered for parole vary from state to state but generally include some mix of the following: good behavior while imprisoned, whether the person would threaten the public, whether release would depreciate the seriousness of the offense, the likelihood that the inmate would commit the same crime again, the efforts of the inmate to rehabilitate, the age of the inmate, their mental status, their marital status, whether they show remorse, their prior criminal history, the type and severity of the offense they committed, and their education and training. As you can see, there’s quite a bit that goes into these determinations-something only made more complicated by every state having its own approach.

Nevada itself has a point based approach for determining whether somebody should receive parole; focusing on static and dynamic factors. They go by golf scores out in Nevada, so the lower the parole score the better. They look at eleven factors. The static factors include the age the person was first arrested, whether they’ve broke parole in the past, their employment history prior to arrest (the longer they held a job the more likely they are to get parole), the type of offense, any history of drug or alcohol abuse, and gender (men are less likely to receive parole). The dynamic factors include current age (over 41counts for you while being under 21 counts heavily against you), active gang membership, treatment programs while in custody, good or bad behavior while imprisoned, and current custody level (minimum custody, medium custody, or maximum custody/solitary confinement).

Simpson likely scored a low-risk assessment. The Nevada framework likely left him scoring two points for previous alcohol abuse, minus one point for his age, minus one point for good behavior, and plus one point for being a man. This leaves him with around three points, with some potential wiggle room up or down depending on the level of custody he was held at. Low-risk is anything under 5 points, making OJ’s parole less of a surprise than some might think.

Nevada Currently Working On Improving It’s Parole Program

Another element which may have factored into Mr. Simpson’s parole is the fact that Nevada has, in recent years, been attempting to address the fact that they have a particularly low rate of successful parole hearings. A study from a few years back suggested the state take a more aggressive approach to releasing low-risk inmates and pointed out a number of issues with how parole is determined.

Those who maintain innocence are often denied parole on this basis-citing a lack of remorse. This can be problematic, especially when they actually turn out to be innocent on several occasions. Those who sue for a parole hearing often have this treated as bad behavior negatively effecting their chances of parole, even when they win a suit saying they have a right to a parole hearing. The fact that somebody is young when they are arrested is a poor reason to deny them parole. Finally, in perhaps the most ridiculous issue, a change in software back in 2007 apparently resulted in a number of false felonies ending up on inmate reports and leading to denied parole.

Know Your Rights When it Comes to Parole

As you can see, parole is often a flawed system. However, it is a crucial right for anybody convicted of a crime. Each state treats it differently to some degree and it is crucial that you know how it is handled, whether for yourself or for those you love. OJ certainly is glad for knowing his rights. He’s been described as “over the moon” with the decision, as he should be. Sending somebody to prison has the goal of ultimately rehabilitating them and allowing them to return to their families, this is why we have parole in the first place.