Believe it or not, smaller fraudsters get prosecuted all the time, too. One of the news reporters I followed on Twitter in my area liked to follow all of the small cases of real estate and business fraud in my area. There were a lot of prosecutions for people who were stealing <$10K at a time through affinity fraud and fake business investments.
You just don't hear about them as much because someone going to jail for stealing $60K from a couple families from their church in a fake real estate scheme isn't as exciting as a massive fraud against JP Morgan.
A few years ago the manager of our local Menards got convicted of stealing over a half-million dollars over 5 years. She only got 180 days, too, and was allowed to leave the jail for work. Depending on how high on the hog she lived for those five years, she might figure it was worth it.
I knew one local HVAC company where the office manager skimmed off six figures over something like 20 years before she got caught. Just slow and steady, never taking enough to be obvious, I guess. It happens more than people would think.
I knew a guy whose parents basically invented thrift stores. He’s accountant did the same thing while he was battling drug addiction. Not sure if she ever got prosecuted I think the owner wanted to move on. Then he died of a heart attack.
Still what she did was fraud. From the article - "Still, the judge criticized the bank, saying “they have a lot to blame themselves” for after failing to do adequate due diligence. He quickly added, though, that he was “punishing her conduct and not JPMorgan’s stupidity.” "
Not to justify it, but why isn't the founder of UPS (edit: Fedex) in prison? I don't think it was legal to go and literally spend their money at the casino.
If you turn a profit no one cares (unless you're Shkreli, don't think his investors lost money, but he pissed off some politicians because he said the quiet parts out loud about how the pharma industry works), if you lose it's fraud.
When all the winners are doing it, hard to compete otherwise... not that it makes it right.
why isn't the founder of UPS in prison? I don't think it was legal to go and literally spend their money at the casino
That was FedEx’s founder, Fred Smith. It wasn’t UPS
He only had $5,000 of funds remaining, which he gambled playing blackjack, so the potential loss to investors was small. He’d already lost almost all their investments through operating FeDex
At that point he had been stiffing his pilots on wages for weeks or months, and with many also paying fuel bills on their personal credit cards/checks, since many fuelers had canceled FedEx's accounts.
Yeah, $5K isn't a whole lot, but if I'm a pilot struggling to put food on my family's table, and the CEO takes company money to Vegas, I'm not thinking "Oh, but the investors" or "Sure, it's not that much money anyway".
I don't see why people (not saying you, in particular) see this as some heroic founder "risking it all". He wasn't. He was risking the company's "all", after asking the employees to suck up his mismanagement.
some heroic founder "risking it all". He wasn't. He was risking the company's "all", after asking the employees to suck up his mismanagement.
I agree. He was asking employees not to cash their paychecks sometimes. $5000 is inconsequential compared to that forced investment from employees and business partners
If you spend investor money at a literal casino while advertising a non-casino related business, and pay the investors back, probably people will view you as not committing a crime.
If you get investor money or get a loan on the basis of funding logistics investments, bet it on roulette red, and go bankrupt, I would expect you'd be looking at hard jail time for fraud.
So I'm thinking the crime would be nothing, because he was a winner, and the optics totally changed, and fraud relies on very subjective opinions of a jury.
There are lots of examples of people going to jail despite investors getting their money back, like SBF and Shkreli. Even Madoff investors got 94% of their investments back.
Shkreli is the only one of those 3 that fully paid back his investors, and it took him pissing off virtually every politician and a bunch of wealthy insurance executives/administrators to get enough resources mobilized to get a conviction (and being one of the most uncharismatic people on earth, which didn't help him at trial).
I think you are definitely in a much worse place for a fraud conviction if you lose money.
No, those repayment numbers are what their crypto was worth at time of bankruptcy and interest is nowhere close to what you could have made just doing index fund on top of any damage done since they didn't have the money.
If I stole 1000 bucks from you 3 years ago and repaid 1080 back now, sure, you got some interest, but you still be pretty unhappy with not having access to that money. For some, lack of access to that money could have been extremely damaging.
No because the assets ('money') deposited to SBF were crypto, and you just gamified it by doing a currency exchange to USD while disingenuously failing to note that in that time the USD value of the crypto went up.
If you want an accurate reflection, note how much of the crypto deposited went in, and then how much came back out after SBF lost it.
This would be like me depositing USD, someone stealing some of it, then you bragging the value went up because I have a larger quantity as measured in Venezuelan Bolivars. What actually happened is their % they recouped was less than 100 until you artificially change to an entirely different currency.
It’s not super relevant. If you were responsible for managing a property for someone and instead sold it outside your agreed authority and dumped the money into nvidia shares in 2020, you’d still be in trouble with the owner of that property even if the nvidia shares did better in USD terms than the property would have
Ok, I deposit stock shares, you lose 50% of them under the couch, but the stock price goes up 110% so when the government seizes and liquidates your assets I have slightly more cash than the original value of what I deposited. Did you lose me money?
> (unless you're Shkreli, don't think his investors lost money, but he pissed off some politicians because he said the quiet parts out loud about how the pharma industry works)
What's the TL;DR? His wikipedia page doesn't make it obvious.
Shkreli's schtick was to buy out or control pharma companies that had a monopoly and jack the everliving fuck out of the prices. He had some programs for uninsured people, but he would milk the insurance companies absolutely dry, which gave him some wild profits.
This made a bunch of powerful people absolutely enraged, as he was basically publicly bragging about jacking the ever living fuck out of the prices. Pharma companies do this but Shkreli would publicly say it and tell the truth that basically the other companies were doing it while pretending to be good people, and he was only being honest about it. Poor people were pissed because they were told they couldn't get their drugs (I'm unaware if the program that allowed uninsured people to get them for cheap was real or not), and the rich insurance people pissed because he was basically he was bilking them.
So they went back and discovered one or some of his other early enterprises weren't profitable, but that he had used money he made off his later pharma enterprises to pay back his earlier investors.
In trial, his investors testified they were happy with the situation, lost no money, and would invest with him again. But they still convicted him for fraud, even despite the 'victims' themselves did not believe they were defrauded. It didn't help that Shkreli is probably one of the most profoundly unlikeable people you can possible listen to, unless you're not bothered to hear a hyper-capitalist be honest about how they do business.
Sounds like basically the big boy version of how all the other psychiatrists who run plausibly deniable pill mills will screech about the one running a flagrant pill mill until they lose their license.
Victims not wanting prosecution doesn’t absolve the perpetrator as wife beaters learn all the time. I also think Skhreli’s biggest mistake was threatening Hillary Clinton.
If a wife says at trial she wasn't beat, it's extremely likely you're getting a conviction. I'm aware of a recent high profile case (Mike Glover) where the partner even had signs of broken bones and a beaten down door and the partner just later changed her story to those being due to a recreational accident outdoors and that pretty much terminated the case between that and her not providing a favorable testimony. But that's aside the point.
In this case the wife never called the cops, and then when the cops showed up she claimed she wasn't beat, and not only that she has no visible marks or bruises or anything.
And none of this is justifying any of it. Just showing how far outside of what we commonly see in fraud cases that actually get convicted.
He would paint himself as a working man's hero, "I'm making insurers pay more so you can get your drugs cheaper", always avoiding the awkward questions of where the insurer's money came from and why premiums kept rising (note that I'm also not siding with insurers here, especially those who have implemented PBMs to leech money into their pockets). He basically treated the public as useful idiots who thought that insurance was paying more for their drugs out of ... charity? Goodwill? The money fairy?
Then there was also the fact that at least once (and to a slightly lesser extent, twice), he went to the FDA to block the approval of a new drug, arguing it shouldn't be on the market. Why?
Not because it was less effective than the market options - it had better results.
Not because it had more/worse side effects, complications and interactions - it had better results there too.
Not because it was prohibitive, or patenting or anything stifling to the market.
No, it was because Shkreli had recently purchased a manufacturer of one of those existing drugs and their portfolio, and had been in the process of ramping up his price gouging on that drug, i.e. "The FDA should block approval of this better drug because it limits my ability to profit from my 'worse' drug."
Regardless on your take about his antics, it seems clear the fraud prosecution had a lot more to do with his pharma antics than the government actually caring that much about how he paid back investors at prior companies, especially since to my knowledge none of his investors were going to the government with complaints. No one gave a shit about the guy until his (seemingly legal) pharma 'gouging' practices pissed off a huge segment of influential people.
I do unfortunately agree with that. But to this day I still see people who see him as some unsung hero, and the prosecution of him for one of many horrible acts was one that only doubled down on that vision.
There's no knowledge as to whether he used company money, or personal cash/line of credit. In fact, there's no knowledge of the story is even true, apart from what one dead man wrote!
There is truth to this. She was exposed because JP Morgan ran a marketing campaign that converted extremely poorly. Better purchased data might've prevented significant forensics. The poor due diligence had already been signed off.
While she committed fraud, I feel sorry for her because of her naivety. It must've been a sick moment when they asked to examine the data during due diligence. If she'd known that would be used for marketing integration so quickly, maybe she would have backed out of the deal.
From the complaint:
> In particular, CC-1 and JAVICE asked Engineer-1 to supplement a list of Frank’s website visitors with additional data fields containing synthetic data.
> Engineer-1 was uncomfortable with the request and stated, in sum and substance, “I don’t want to do anything illegal.” JAVICE and CC-1 claimed to Engineer-1 that it was legal. JAVICE stated to Engineer-1, in sum and substance, “We don’t want to end up in orange jumpsuits.” Engineer-1 declined the request from JAVICE and CC-1.
She's not naive. She was told this was illegal and then did it still. She knew this was fraud.
Yes, read the same. Naive in thinking she could get past that and they wouldn’t do anything particularly revealing with the data. A smarter fraudster would’ve backed out earlier with less damage.
She's so naive, she just hung around until someone found out the fraud.
It made me wonder what she was thinking when her $30M share landed in her bank account. "Whee, I got away with it", "it's their problem now"?
I don't think I would commit fraud, but if I did it for that amount, I would be on a flight to Malaysia or some other place with no extradition with the US!
I was about to go on a rant about, "Why is it ethical to put people in jail for doing things that only affect money? Was anybody at JPMorgan hurt as bad as jail will hurt this person?" But you already answered the question.
I personally believe money crimes should have money punishments and corporal crimes could have corporal punishments. If you steal from me and go to jail how did I benefit? If you steal from me and I get a bunch of $ for pain and suffering and you get your pay docked for n years that seems good.
The USA isn't the only country in the "western world", please stop equating the two.
Even for Britain, France, Germany, the countries with the biggest far right/reactionary political groups, where there are legitimate chances for them to end up in power, none of them are religious. Or even that socially reactionary for that matter.
Never mind third in line, the dude who is currently President just put out a memorandum declaring "anti-Christianity" to be on the same level as "support for the overthrow of the United States Government."
I really wouldn't go this far, there is _way_ too much religion in US politics for proper separation of church and state. When elected politicians regularly quote religious documents in their reasoning for making decisions, agreeing and disagreeing with others, etc. you can't claim a theocracy isn't on the cards.
No, it has not. But you cannot deny that religion being a visible, daily, part of politics, and being very often quoted as justification for political, and even worse, judicial decisions, is closer to a theocracy than it is to separation of church and state.
> There is the COVID sect. They even masked themselves outdoors in public - like the women in Iran back in the day. Without any evidence - and they did it even against evidence. It was a very religious thing
Bloody hell are we still at this nonsense today?
Public health authorities, across multiple continents, said to mask up. Did it limit spread? Yes, it did, and studies proved so. What the hell is your problem there? May I remind you the initial heavy weeks with makeshift morgues in ice rinks and refrigerated trucks, and military hospitals being deployed? Lockdowns and masking and vaccine mandates were reasonable, and reasonably effective, remedies for how horrific things could get (and did get, at the start, in multiple countries).
> There is the climate sect. There are many young followers with strong believes - but nobody has ever read any book on atmosphere science. And nobody has read any recent paper on the subject. Once you do, you'll find it very surprising how little substance is behind their dogmas.
Aha, so trusting the scientific consensus is "a sect". Do enlighten us, how is climate change not real? Or is it real, but God given? Or what is your deal?
> Another group now shouts for war - and if you listen to them they're about as intelligent as the worst kind of crusaders back in the day.
What war? Putting Russia back in its place? Si vis pacem, para bellum. The only thing a bully would understand is strength.
Please don't engage in flamewar about the relative merits of nations or regions (or COVID masks in 2025) on HN. It's not what HN is for and it destroys what it is for. This article is about the acquisition of a computer games company. The discussion ended up in a completely irrelevant and toxic place. Please remind yourself of the guidelines and make an effort to heed them in future.
You can't comment like this on Hacker News, no matter what you're replying to.
Phrases like "You've bought into multiple cults" and "I think you're pretty lost. Study some history. Seek help!" are never acceptable on HN, no matter the context.
And, really, are we still arguing about masks in 2025? Nobody is changing their mind about it now. Please just let it go.
Discussion like this is not what this site is for, and destroys what it is for.
Woah now, Just because it walks like a duck and talks like a duck, doesn't mean you can you the "D" word. Some ducks might get offended! They might accuse you of fomenting violence like a duck might do!
Same thing where I work. It's a startup, and they value large volumes of code over anything else. They call it "productivity".
Management refuses to see the error of their ways even though we have thrown away 4 new projects in 6 months because they all quickly become an unmaintainable mess. They call it "pivoting" and pat themselves on the back for being clever and understanding the market.
TikTok was my favorite form of the old weird internet. I saw that guy who modeled all the boroughs of New York City when he only had a few hundred likes: https://news.ycombinator.com/item?id=45261877
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