Why “Pharma Bro” and “The Next Steve Jobs” Got Different Treatment for Their “Massive Fraud”
By Joe Jarvis - March 29, 2018

The justice system is far from blind. And that is the point.

The people in control exercise power by deciding when the rule of law is applied, and when it’s suspended.

The other day we discussed how some people get 25 years in prison for driving while intoxicated, while others–law enforcement–only get probation for full-blown rape of a prisoner.

But the government also gets to manipulate justice when it comes to white collar crimes.

Take a recent example of two people who defrauded investors. Both committed real crimes that harmed others. One of them is hated by the media while the other was a media darling.

I am talking about Martin Shkreli and Elizabeth Holmes.

“The Most Hated Man in America”

The media likes to refer to Shkreli as “pharma bro.” He rose to infamy a couple years ago when he acquired the rights to an AIDs drug and raised the price by 5,000 percent. He is easy to hate and has a face made for radio.

Shkreli defrauded investors by lying about the success of a hedge fund and funneling money from another business to make it appear that the hedge fund was doing well. He was convicted of defrauding investors of $10 million, and sentenced to seven years in prison. He must also forfeit $7 million.

[H]is crimes are serious and it is important to send a message that such fraud should be not tolerated, [the judge] said. “White collar offenders like Mr. Shkreli use their intelligence and acumen to elude detection,” she said.

“The Next Steve Jobs”

In stark contrast to the “most hated man in America,” is Elizabeth Holmes.

Holmes started the Silicon Valley “Unicorn” company Theranos which promised to revolutionize bloodwork. Holmes claimed she created technology that streamlined and improved current methods of analyzing blood, and that just a small drop could now give stellar analytical results.

The media hailed Holmes as the second coming of Steve Jobs. She was “leading the class” in Forbes Freshmen 400 in 2014.

[S]he was on the cover of an edition of T: The New York Times Style Magazine, and she [was] also on the cover of [an] issue of Inc. She has been on the cover of Forbes and Fortune, and she was named one of Time’s “100 Most Influential People” of 2015. She got a lengthy write-up in the New Yorker [in 2014], and Wired has called the implications of her work “mind-blowing.”

Secretary of Defense James Mattis is on the Board of Directors for Theranos. Joe Biden once went to Theranos facilities for a media event.

And in 2016, after The Wall Street Journal exposed some serious credibility issues with Holmes and Theranos, Hillary Clinton participated in a fundraiser with Holmes and Theranos.

The Huffington Post offered a critique at the time:

And once you’ve made it into this coterie of elites, it becomes all too easy to forgive them for their occasional transgressions. The failures of Theranos don’t stick to Holmes (indeed, the media continued to fawn over Holmes after the Wall Street Journal blew up her spot). If anything, these setbacks are temporary embarrassments on the way to success. Class recognizes class.

But it turns out the Wall Street Journal had just nicked the tip of the iceberg. Two weeks ago, the SEC announced charges against Holmes for Fraud.

Washington D.C., March 14, 2018 — The Securities and Exchange Commission today charged Silicon Valley-based private company Theranos Inc., its founder and CEO Elizabeth Holmes, and its former President Ramesh “Sunny” Balwani with raising more than $700 million from investors through an elaborate, years-long fraud in which they exaggerated or made false statements about the company’s technology, business, and financial performance.  Theranos and Holmes have agreed to resolve the charges against them.

The Difference

So Shkreli and Holmes did basically the same thing, except that Homes defrauded investors of about 70 times as much money.

You might expect her to get 70 times the sentence that Shkreli got, based on the scope of her crime. After all, the judge in the Shkreli case made a point that white collar criminals must be made an example of.

So did Elizabeth Holmes get fined $490 million? Will she be spending decades in prison?

Nope. She settled the charges with the SEC for $500,000. Yes, a half million dollar fine, less than one percent of the amount she tricked people into investing.

She cannot hold an executive position in any public company for ten years, and she must return some of her Theranos stock. Of course, the civil lawsuits are just beginning as well…

But she will not spend a day in jail, or even on probation.

And once you’ve made it into this coterie of elites, it becomes all too easy to forgive them for their occasional transgressions.

Punishing Holmes for her crimes would be like an indictment against the media elites who fawned over her, and the politicians who cozied up.

But Shkreli is the perfect whipping boy for corporate fraud.

Justice isn’t blind. Elites protect their own.

Sure, both of these fraudsters were charged. But only one of them received any sort of proportional punishment.

The ability to mete out subjective punishment is a terrifyingly immense power.

You don’t have to play by the rules of the corrupt politicians, manipulative media, and brainwashed peers.

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  • joe_bob_gonzales

    oye. its good to be friends with the king and queen. if only shrekli had been smart enough to give “campaign contributions” to the right folks. or had them on his board of directors. and now you know. as if you didn’t before.

    • Spot on ! That is how it works and the BHO crew put it all on steroids for all to see in color.

  • Warren Celli

    Good article! Intentionally created vague laws that are selectively enforced.

    The scam ‘rule of law’ is now a weapon of oppression and herd thinning.

  • mary

    You missed some of the story with Holmes and Theranos. Guess who used to be on the board with the creepy Mattis? Non other than Heinz Kissinger and George Schultz. In fact, a its height, there were a slough of war industry creeps on the board. I think there was only one person with medical background–in a medical products company. Nothing to see here, move along, move along…

    So ask yourself why? Why was the MIC so heavily involved with this scam? And scam it was. She claimed that the company could do dozens–or was it hundreds–of tests with one drop of blood, but they were taking normal blood samples and sending them to other vendors to perform the standard tests. And then the head of r&d committed suicide. Really? We’ll never get the full story about Theranos, tptb have seen to that. But there’s way more than meets the eye.

    Oh, one other thing. On Holmes’ wikipedia page: “She is the daughter of government service worker Christian Holmes IV and congressional committee staffer Noel Daoust.” What is used to say is that her father worked for USAID. Hmmm. I smell a family of spooks.

    • robt

      A more complete story is here:

      The most puzzling part of the judgment is that Shkreli had to compensate investors for their original investment although they had been paid back already and had made large profits. Technically there may have been fraud, as say if you lend someone money which they promise to pay back on a certain date by contract, and they miss dates, but eventually pay you back with a big bonus. Also, he gave a lot of the drug away if people couldn’t afford it and didn’t have insurance. This guy was the target of a media hate campaign, largely because of his unfortunate demeanor and attitude.
      On his YouTube channel he’s really irritating but if you read between the lines, he’s got a lot to say, in between the scorn and abusive manner. Some people are just like that. Maybe he should have thrown on an all-black outfit – worked for Steve.

      • mary

        Yes, he is akin to Leona Helmsley and Martha Stewart, neither of whom were guilty of anything that warrants jail, esp Stewart. These were campaigns to 1. make the gummit look like they are watching out for the little guy (yeah, right) and 2. messages to others who might step out of line.

    • Thanks for the extra info!

  • Many good and valid points and a good read !

    By the way don’t forget about this guy who walked and should have gone to jail !

    MF Global was a deliberate take down in favor of CME , the two largest commodity houses in the USA and the world ! And jet there be no doubt the Obama crew was complicit in this massive crime ! Then years later a settlement and nobody goes to jail, like magic ! Obama did use a lot of magic didn’t he ? All criminals, simple as that and we are seeing that now in spades !