Posted On Friday, August 11, 2017
What Happened?
A jury empaneled in the U.S. District Court for the Eastern District of New York convicted pharmaceutical executive Martin Shkreli on two counts of securities fraud and one count of conspiracy to commit securities fraud, but acquitted him on five other counts, including conspiracy to commit wire fraud charges that would arguably have increased his exposure under the advisory U.S. Sentencing Guidelines.
The Rundown
Both the government and Shkreli claimed victory after the verdict, but the real winner will be determined at sentencing. Shkreli was convicted of counts related to making material misstatements to investors about his hedge fund and conspiring to control the stock price of his drug company, Retrophin, Inc. But he was acquitted of wire fraud counts based on allegations that he looted assets from Retrophin to pay off hedge fund victims. Shkreli will undoubtedly argue that the government cannot prove a significant, or indeed any, pecuniary loss tied to his offenses of conviction. The government, in turn, is likely to contend that the Court consider any loss to Retrophin as relevant conduct. Because loss amount largely drives the sentencing range for financial crimes under the U.S. Sentencing Guidelines, the outcome of this dispute will be critical to Shkreli’s sentence. If the Court finds that there was no or little loss, Shkreli could plausibly argue for sanctions short of imprisonment.
Importantly, though, Shkreli’s guidelines sentencing range will only be advisory – the Court may vary or depart from the range upward or downward. Under 18 U.S.C. § 3553(a), the Court must fashion an appropriate punishment based on its consideration of a number of factors, including Shkreli’s history and characteristics; the nature of the offense; the need for the sentence to provide just punishment, promote respect for the law, and to provide adequate deterrence (both to Shkreli and other would-be offenders) to criminal conduct. Shkreli has made numerous statements both during and after the trial – for example, referring to the prosecutors as “junior varsity” and the prosecution as a “witch hunt” – which may cause the Court to punish him more harshly than it otherwise would. On the other hand, Shkreli will have the opportunity to produce mitigating evidence that counsels in favor of a more lenient sentence.
For the Record
“This was a witch hunt of epic proportions, and maybe they found one or two broomsticks, but at the end of the day, we’ve been acquitted of the most important charges in this case.” — Martin Shkreli
The Take-Home
The drama of the Shkreli case did not end with the jury verdict. Indeed, the real intrigue surrounds his sentencing.
What Happens Next?
Shkreli will be sentenced at a date to be determined by the Court.
Posted On Thursday, August 3, 2017
What Happened?
A group of bipartisan senators petitioned the Department of Justice to disclose details about law enforcement’s use of cell-site simulator devices known as Stingrays.
The Rundown
A group of senators, including three Democrats and one Republican, jointly submitted a letter to Attorney General Jeff Sessions requesting information about the effects of Stingray devices on the general public. Stingray devices work by masquerading as the cell tower antennas of wireless companies and sending out signals that force all cell phones in the area to transmit their locations and identifying information to the device. While cell site location information gathered by actual cell towers can typically give a general location of a cell phone, cell-site simulators like Stingrays can pinpoint a phone’s precise location as long as the phone is turned on. This is true even when the target is not actively using the phone at the time. Additionally, when law enforcement uses a cell-site simulator on a particular device it prevents communication between that target phone and the network’s cell tower. This renders the phone unable to make or receive calls during the time that—unbeknownst the phone’s user—it is connected to the simulator.
Stingrays or similar devices have been used by state, local, and federal law enforcement around the country for more than 20 years, but according to critics, their use has been shrouded in secrecy. This secrecy, the senators urge, raises concerns that judges who approve requests to deploy Stingray devices may not understand the full implications of their use. For example, in addition to sending signals to the target device, a Stingray also sends signals into the homes of everyone in the surrounding area. Critics are also troubled by the Stingray’s disruption to cell service. According to the senators’ letter, Canadian law enforcement determined that Stingrays can block 911 calls and advised its officers to weigh the technology’s benefits against the potential harm to the general public in deciding whether to use the device.
The Take-Home
The senators’ letter puts much-needed attention on Stingray devices and their effects on the rights of both criminal defendants and the general public. Defense attorneys should be aware of the developments in this area and should determine at the outset of any criminal matter involving cell phones whether cell-site simulators were used to gather information about the defendant. Attorneys should be prepared to challenge information gathered from the devices on Fourth Amendment grounds, particularly if it appears a Judge’s approval of their use was not fully informed.
What Happens Next?
The senators asked that DOJ respond to their letter by August 25. They specifically asked the Attorney General to explain whether he disagrees with Canada’s finding that Stingray devices can block 911 calls, and to disclose whether the FBI has tested the cell-site simulators it uses to determine how much they interfere with nearby phones.
