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Man Who Bribed Son into Penn Guilty in $1.3B Health Fraud (bloomberg.com)
125 points by jonwachob91 47 days ago | hide | past | web | favorite | 111 comments



One of the things that struck me the most as I read about the college bribery scandal is that many if not all the parents involved acted as if bribing people, falsifying records, doctoring photographs, etc. were things that "everyone else was doing to get ahead in the admissions game" and therefore they could justify and rationalize it as necessary. At a minimum, they can at least claim they did it for their children.

I don't know how anyone could ever justify and rationalize stealing money from the elderly and taxpayers. It seems so wrong; indefensible, really. Jeez...


Con artists and criminals think everyone is corrupt.

If you know someone who thinks everyone is corrupt, or self serving, well... that’s one way people rationalize their own unethical behavior.

The meaner you are, the more assholes you meet.

When someone says “liberals are just virtue signaling” they probably are a horrible person because they don’t believe humans can behave ethically/altruistically.


>They probably are a horrible person

Or they observe a commonality in human nature, that signaling virtue is a real phenomenon in the competition of a certain species of social apes. And that espousing such views doesnt guarantee their feasibility nor does it mean that the signaler has actually arrived at an ethical understanding of the subject.

EX: Used to be vegan. Saw how monstrous the self-righteous were. Realized that promoting the development of "good", intelligent, ethical, and free people was far more helpful than being an individual in a society of millions of individuals. And maybe a society of such people would be far more conscientious, especially in regards to the treatment of animals, than what we have now.

Also that psychopathic/sociopathic actors could negate my puny individual protest and competing for social rank over them would probably be more helpful than being an "individual" in the liberal sense


Wait so you stopped being vegan to ... protest the fact that some vegans are self-righteous? Do you also drive a V8 to protest the fact that some people with Teslas are smug?


It was more of a realization that those people placed far too much importance on their individual "purity", and their distance from the "impure" masses than effecting any systematic change.

When you think of the entire chain of supply and logistics involved in running the modern world, you are inexorably meshed with the world of evil and the "impure". As I said, it does far more good for ethical entities to take rein of this thrashing beast than to posture purity. You might even have to be cunning, brutal, and cold to ward off those who simply don't give a damn. Especially the psychopathic and sociopathic agents.


This is all a ton of pontification without arriving at any sort if logical conclusion. You used to be vegan but stopped because you didn't feel like you could enact change with your diet? Weak .


Of course. It'd be dumb to think you have any direct effect when you're inmeshed in an "impure" network.

The world doesn't exist to provide a nice solution set where you can have the conveniences of modern living without the massive externalities of war (to secure and maintain logistical routes) and pollution. To be quite honest, I think the world is inherently a tragedy to those who seek to do only "good".

Helping potential moral agents, aka your "neighbors" (physical or spiritual), with better leverage in the social ape rat race has more impact. You strive to throw off the worse leaders of men and install the better leaders of men.

I was going to go on but forgive me for balking out of a lengthy explanation that isn't structured yet. It's been a while since someone has challenged my stance like that and my intuitons need more editing, so to speak.


So... You used to be vegan but you stopped because of how 'monstrous the self righteous were'? So billions of animals raped and slaughtered every year for taste but but na fk that, some vegans are uppity...?

So it seems to me you are projecting after all. There's nothing wrong with 'virtue signalling' whether we do it by nature or not. It's ALWAYS brought up in the context of trying to shame white men for being supportive towards women and minorities.


>When someone says “liberals are just virtue signaling” they probably are a horrible person because they don’t believe humans can behave ethically/altruistically.

Pot meet kettle.


> ..."everyone else was doing to get ahead in the admissions game" ...

Reminds me of this: https://www.reddit.com/r/india/comments/6rbpr9/why_is_lying_...


Projection is something the good and bad do. There really is a battle of dark and light you see in mythology and centers on people's psychological need to project their actions as the norm.


Fraud is wrong. Rationalizing it away as a fashion isn’t justifiable. Both types of fraud you point to are no different for me.


Of course it's not justifiable. The question is, parents were rationalizing school bribery, was this man rationalizing medicare bribery?


Why?

One of the US attorneys wasting our federal tax dollars prosecuting the parents even pointed it out: they bribed the college the wrong way, by not buying them a building like they were supposed to. "We're not talking about donating a building...we're talking about fraud."

So the injured parties here are the universities, and their complaint is they got cut out on the bribe dollars. Which is fine and all, but I don't understand at all why that's our problem. That's the universities' problems, and they should feel free to sue their employees for not sharing bribes appropriately.

Health care fraud actually hurts people and steals from the federal government, so there's two good reasons to spend our resources prosecuting it.


I don’t think you know what the word bribe means. Payment in exchange for a product or service (e.g. admission to a college) is not a bribe. When I go to the store and buy a soda I am not bribing the store. A bribe is when you pay an agent of an organization to misappropriate the resources of or otherwise defraud their employer. Like paying a cop to not arrest you, or paying a college coach to pretend you’re a recruited athlete.


Universities get substantial federal funding, including Pell and research grants. Such investments are put at risk if the universities fill themselves with unqualified applicants.


Has any university ever lost federal funding because of admitting too many unqualified applicants? I doubt this is a major risk.


Where is the claim that a university has ever been found to have admitted “too many unqualified applicants”?


And what makes the unqualified applications requiring building purchases for admission ok, and the unqualified applicants requiring cash payments to coaches not ok under your rubric?


Should be patently obvious that there’s a cap on how many people can donate the kind of money that funds a building — nevermind that such donations are public. There is no cap for a secretive system of bribery and arbitrage.


Because donating money directly to the school benefits other students who use the dorms, the building, the research facilities. Straight up bribing the coaches just enriches the coaches.


I believe the problem was the personal donation for the fraud was structured as a tax deductible non-profit donation.


So the injured parties here are the universities

And the legitimate applicants who were rejected.


They did it "to" their children. Looks more like a robbery than a gift. What message are you sending your son when you tell him "most people get here because they earn it, but don't worry, I'll pay for you to get in."


Digression but when the system is so intentionally opaque (and IMO this isn’t a bad thing) it’s difficult to even say the people that weren’t bribed into Penn “earned it”.

The difference between a Penn reject and a Berkeley accept or vice versa isn’t likely to be terribly big if at all notable.


Hmm, hadn’t seen that (“many ...parents involved acted as if ... were things everyone else was doing...”).

In the few stories I’ve seen, the parents have not committed.

Sources?


If the chieftains do it and get away with its mkay.


This is stunning in its scope and made me wonder in what other developed country is it even possible for a citizen to defraud its government of over 1 billion dollars?

The skilled nursing system in this country is broken, with no meaningful oversight other than an annual inspection which everyone knows is coming. Lengths of stay are unnecessarily long and the quality of care is unbelievably sub par. Despite all of this, fraud at this level is pretty astounding, and should serve as a wake up call for the government to more aggressively monitor all facilities, or outsource monitoring from the States to private agencies.


You can run a company that has to pay $1.7 billion in fines for defrauding medicare and still be governor of Florida and (as of last January) a sitting US Senator: https://www.politifact.com/florida/statements/2014/mar/03/fl...


Indeed,

The phrase "Robber barons" from 19th century was hardly overstated. America is once again reaching a stage where a large enough fraud and criminality offers an exit strategy into the ruling class.


Skilled therapy is changing though. PDPM doesn’t reimburse through the amount of therapy provided. It reimburses by the need of the patient. I believe nursing is included in that budget


that was what the RUGs were supposed to do, but it was easily gamed and I don’t see why this wouldn’t be either. The only advantage it offers, IMO, is that it allows patients with a greater variety of needs (like more nursing skill and less or no therapy) to receive care. For example, the end stage cancer patient who can’t withstand much therapy but isn’t ready to accept hospice.


Why do wealthy people need to even buy admission for their children into elite schools? Don't they have enough independent wealth to support not only themselves, but their children, as well?

With that kind of money, their children really don't need to cultivate careers... and even if they wanted to, surely they could do it the old fashioned way? And if they fail, parents can bail them out?

Or is it primarily driven by greed, and the parents want the kids to make a lot of money, so the family has even greater wealth?


It seems like, to obviously generalize, a need to look successful. "My son is a successful partner at a firm after graduating Harvard," instead of having to say, "oh, he is unemployed but it's because I'm wealthy."

Besides the education part though, the other thing I've seen with wealthy families is appointing kids to high positions in a family business, or saying they are "in real estate." I'm not sure why they just wouldn't do that instead of bribing colleges, but maybe if their kid is set on doing something the family will "make sure they can."

Some families even surreptiously won't want to let their kids learn or step out on their own, they want to be involved in everything even after they are adults. The kids in that case must allow that to happen, but probably not too hard to "give up" if you get to drive a luxury car and live in a classy apartment building regardless of employment.


I think they do it for the prestige/status. This is generally what people want wealth for anyway, above a certain life-sustaining amount.


What is the point of prestige/status if it isn't even real? It's like they're sending their kids to Stanford for the Instagram likes they'll get.


Huh, the prestige is most definitely real. The status is real. If your kids go to Harvard or Stanford, people will assume they're smart and you're a good parent.


But it's pretty fragile. You can imagine after this scandal some prestigious employer, say Goldmans or McKinsey declaring that they want to see on everyone's applications whether they are a legacy, small sport scholar, or child of a rich donor.

In fact that might benefit society an awful lot.


Don't forget it starts way before college. For 18 years before college they're shelling out major money (easily $50k/yr or higher) for elite private schools.

Getting them into college is just the natural extension of this 18 year spending spree.


After the revelations, I don't know if the prestige is as strong. It's still there, but you could wonder how many of these people bought their way in, or earned the privilege.


What is surprising about seeking status (or more importantly avoiding status loss) in the eyes of your peers?


It's funny how the 20-somethings of the well-off seemingly have the skills and experience to take on key leadership roles, that their peers somehow would have to take decades to ascend to.

It's "status" but anybody can look at say, Ivanka Trump for example, and see right through it.


> anybody

The people that matter can't, that's their target.

By which I mean, other socialites.


Kids of billionaires are invited to apply to HYP. Multi millioniares (say, someone who has $20M) are afraid whether they can retain that wealth for another five generations; so, that's why they are focused on giving their kids connections and networks that elite schools offer.

If someone has billions, he doesn't need to worry about the side doors. Just pay $10M to get admitted to HYP.


In my view, paying for education in the absence of a career motivation is consumption spending. I don't see why there has to be a utilitarian, or even a "status" motive. I'd pay for my kids to be educated as a gift to them. Granted, I come from a culture that values education as an end unto itself.


It starts way before college. For 18 years before college they're shelling out major money (easily $50k/yr or higher) for elite private schools.

Getting them into college is just the natural extension of this 18 year spending spree.


It's a kind of fig leaf over your inherited position.

Look, I may have gotten all this for free, but I'm smart enough to deserve it. I might even have done it myself.


The fundamental problem here is that what we call ”education” is largely a way to place people into a hiearchy of worth, NOT a way of transmiting knowledge or further peoples understanding of the world.

Rich people see the reality of this and of course want to help their kids ensure a comfortable place in this hierarchy, while the hoi poloi still think’s about getting an education and working hard lol

Maybe we should ask ourselves why/how these people ended up with so much economic power in the first place?


"In the revised indictment of Esformes, prosecutors said he illicitly gave the coach (Penn basketball coach) $74,000 in the form of cash, a recruiting trip to Miami and a ride on a private jet in 2013 and 2014." https://www.bloomberg.com/news/articles/2018-10-05/celtics-a...

Seems more affordable than I thought, considering in the other scandals people were dropping $500k+.


> Esformes made off with at least $37 million for himself from 1998 to 2016, according to prosecutors, using the money to finance a lavish lifestyle of fancy cars and a $360,000 watch.

18 years this went on?? This is what surprised me the most.


There’s little motivation for law enforcement to search for white collar crime, and little support for prosecuting it.

Look at the indictments produced by the Mueller investigation. Politics aside, some of those people were doing real shady shit for years, and they would have gotten away with it cleanly had they not gotten entangled with the campaign.


Counter-argument: none of the shady shit they'd done had enough of an effect to interest law enforcement, right until they got control of the Presidency.

It seems to make sense to me now. All the fear mongering over immigrants and drugs flooding across the border when an American company (Purdue Pharma) engineered the worst actual drug epidemic in generations makes me wonder about the effectiveness of spending literally billions on the "War on Drugs" while not addressing the real issues.


The IRS audits low/middle income folks overwhelmingly more than rich folks.

https://www.vox.com/future-perfect/2019/4/3/18292741/irs-tax...

I doubt it’s because of either the magnitude or harm caused, more like the ease of prosecution.


I don’t think that’s a counter argument, just a specific example of what I said in my first paragraph.


What you say in your first paragraph:

> There’s little motivation for law enforcement to search for white collar crime, and little support for prosecuting it.

How is what I said a specific example of this?


Law enforcement wasn’t interested in their shady shit before, because they weren’t motivated to look for it, and if they had found it, it probably wouldn’t have been prosecuted anyway.


law enforcement doesn't search for unreported crimes period. Some white collar crimes are reported such as when someone uses your credit card or steals your identity. Crimes such as bribery are not reported, they merely stumble across it. The reality scandal is tip of the iceberg, there's so much bribery and corruption going on in life that never get reported.


Law enforcement searches for unreported crimes all the time! They just only do it for crimes they are motivated to find and which they know will get prosecuted, like traffic or drug offenses.


It is well known that colleges often give special consideration to children of alumni, largely for the purpose of encouraging and sustaining financial contributions. They usually justify it by noting that it brings money into the school and allows them to offer better financial aid.

I think they would do well to simply state some students are admitted based on whether they bring something worthwhile to the college, including but not limited to: academic achievement, artistic accomplishment, athletic prowess, background diversity, gender balance, interest diversity, and financial contribution/desirability, but if students graduate from the school then they have probably proven that they are at least minimally qualified to attend.

It has never been a level playing field, and there are always qualified students who are rejected for reasons completely beyond their control. One bit of consolation for those rejected from all of their elite schools is that it may be easier to excel at a non-elite college, improving your chances for admission to an elite graduate program. And seriously, who really wants to pay $50K+ a year to a college/country club only to be saddled with crippling student loan debt after graduation, debt that even bankruptcy cannot expunge?


[flagged]


Shkreli made all of his investors whole, and put a program in place that you could get Daraprim at minimal cost if you couldn’t afford it. He raised prices on those who could pay: insurance companies.

I love a deserved smear, but Shkreli doesn’t deserve half as much as what he got from the uneducated public, nor his unnecessarily long jail sentence.


> He raised prices on those who could pay: insurance companies.

I cannot imagine a more tone-deaf defense of this scoundrel. Where exactly do you think insurance companies get their money?


Are you locking up all of the other pharma CEOs who do it? That’s the difference between justice and outrage porn.

I’m not saying he did nothing wrong (some jail time and monetary penalty was in order, but not the severity that was issued). I take issue that he was sacrificed for the public because of his brash showmanship, and the broken system marches on with little complaint. Epi Pen and insulin manufacturer execs still walk free, and they did far worse.


[flagged]


Pointing out a lack of proportionality in dealing out punishment through the justice system is not appealing to hypocrisy IMHO. Quite the contrary: to not point it out allows for a "free for all". I challenge the belief that prison time should be issued based on actions that aren't crimes, versus actual crime committed. The sentencing guidelines were clear for the fraud Shkreli committed; they were thrown out the window and the public cheered. That is not justice, and we (the public) are remiss for not critiquing how the system worked as part of the larger issue that is prison and justice reform. We must not be so cavalier with years of someone's life, years they will never get back. Being obnoxious is not a crime.


But that's not the part of your argument I was criticizing. It may well be that Shkreli got a disproportionate punishment simply because he's an asshole. I'm not taking a position on that. What I was talking about is this:

> He raised prices on those who could pay: insurance companies.

With the implication that that makes what he did OK. Well, it doesn't. One way or another, the costs get passed on to consumers and taxpayers, which is to say, everyone. Spreading the pain so that it is not immediately apparent to any one individual doesn't change that. It is simply not the case that insurance companies are independent wealthy entities who "can pay" without any negative consequences to anyone else. It is in no small measure this mistaken assumption that has led to the mess that the U.S. health care system is currently in.


Why is it not okay to raise the price to what the market (insurance companies) will pay? How else would you expect the market clearing price to be determined (Conservatives in Congress implemented legislation prohibiting Medicare from negotiating drug prices with pharma companies)? Every day healthcare providers are finding ways to extract as much as possible from payers (insurance companies, Medicare, Medicaid); this is not illegal. Immoral? Sure, I'll bite and state it's wrong, but entirely economically rational in the current broken system. What makes Shrekli's transgressions particularly bothersome? He put the issue in the spotlight for the American public to see (with much bravado), front and center, and he's the bad guy for showing the system is broken?

What he did was entirely legal, and in no way should've impacted his fraud sentencing. But exacting revenge on a single person (through overly punitive prison sentencing) does nothing to fix systemic issues. Someone with talent that could be redirected in a positive way (his financial analysis and engineering acumen is proven) is cooling his heels in a jail cell for years, and the American healthcare system is as broken as it was before.

I've seen happen before [1], and was just as dismayed with how the person in question was treated relative to the severity of the crime(s).

[1] https://en.wikipedia.org/wiki/Kevin_Mitnick#Computer_hacking


> Why is it not okay to raise the price to what the market (insurance companies) will pay?

Because the health care market in the U.S. is uniquely dysfunctional at the moment. One of the reasons for this is that most people are unwilling to accept the consequences of free-market economics in the health-care market, specifically, that some people cost more to maintain than they contribute and so on a hard-nosed economic analysis they should simply be allowed to die (or euthanized). So what we have now is a system that starts with free-market rhetoric, but then applies a ton of patches and hacks so that people are insulated from free-market consequences. That just doesn't work. And part of the reason it doesn't work is that it opens the door for rent-seeers like Shkreli to move in.

> What he did was entirely legal, and in no way should've impacted his fraud sentencing.

Like I said, I am not taking a position on whether his sentence was fair or not, I just don't know. The only thing I'm taking a position on is the validity of defending Shkreli on the grounds that he was merely "raising prices on those who could pay."


We will agree to disagree then. I enjoyed the good faith discourse regardless.


De Niro characer in Heat:

> "We want to hurt no one. We're here for the bank's money, not your money. Your money is insured by the federal government, you're not gonna lose a dime. Think of your families, don't risk your life. Don't try and be a hero."

Is that tone deaf, or might it work? I bet it would work. When the financial harm is spread out thin, people take it less personally. That's why people regularly fight back against muggers, but we very rarely see anybody take vigilante action against hospitals, the pharma industry or insurance companies when hospitals charge $10+ for a single aspirin pill and insurance companies spread that harm thin.


It's tone deaf. It's based on a false belief about how money works. In fact, it's based on the exact same false belief that /u/toomuchtodo's defense of Shrkeli is based on. Yes, it's true that the federal government insures deposits, and so the loss from the theft from the bank will not be borne by the depositors directly. But the government has to get its money from somewhere too, and there are only two possible places it can get it: through taxation, or by printing it. If it uses tax money to cover the losses then the losses are borne by tax payers, and if it prints the money then the losses are borne by everyone via the resulting inflation.

> When the financial harm is spread out thin, people take it less personally.

That is certainly true, but that doesn't make it any less harmful. In fact, it is precisely the thin spreading of the harm that causes people to be complacent about the real underlying problems. The result is that by the time people become aware of the problems again, they have become much more serious and concomitantly more difficult to solve (c.f. the 2008 financial crisis).


> "That is certainly true, but that doesn't make it any less harmful."

I didn't say it makes it less harmful. I said it makes the defense tonally aware. The people using the defense are aware of the psychological bias people have when harm is spread thin.

Besides inflation, you also have the costs of a city wide manhunt and FBI bank robbery investigation. The taxpayers are paying for those as well, and they'll likely be more expensive than anything in the vault. But the bank robbers are tonally aware; they know they can suppress vigilantism by pointing out that the government will spread the harm thin.


> I said it makes the defense tonally aware.

Yeah, I know that's what you said. I'm saying you're wrong. Specifically, this bit:

> you're not gonna lose a dime

You will lose a dime. You will lose it in extra taxes or in reduced purchasing power of the insurance settlement you receive. And so will your friends and neighbors and strangers you have never heard of. And that's just the loss you will suffer from this one robbery. You will also lose a dime from the next robbery that the robbers get away with because people bought into this argument, and the next one and the next, until your cumulative losses will be large enough for you to feel the pain and decide to do something about it. And by the time we get to that point, it won't be just you feeling the pain, it will be everyone.


> I'm saying you're wrong. Specifically, this bit: "you're not gonna lose a dime" You will lose a dime.

You're still missing the point. The intention of that character isn't to make a factually correct statement about how the FDIC system works; his intention is to suppress vigilantism. Pointing out that the people witnessing the robbery actually are paying for it is tone deaf.


> The intention of that character isn't to make a factually correct statement about how the FDIC system works; his intention is to suppress vigilantism.

Of course I understand that. But the success of the argument depends entirely on the people in the bank being short-sighted and considering only the short-term consequences to themselves and not the long-term consequences to society.


With $12.2 million stolen in the fictional heist, the per-capita loss would be quite a bit less than one dime.


There are 138 million taxpayers in the U.S. [1] so the per-taxpayer loss would almost exactly a dime. Not that this matters. The net loss of allowing someone to steal $12.2 million is exactly $12.2 million. Quibbling over the details of how this loss is distributed is missing the point rather badly.

[1] https://www.reference.com/government-politics/many-u-s-taxpa...


Oh look, yet another article that acts as if the federal income tax is the only tax that exists. Sigh.

In any case, I believe this sort of thing would be covered by insurance or, in the worst case, the FDIC. Everyone with a bank account helps pay for those.

Agreed about missing the point. I just took the “dime” figure and ran with it.


[flagged]


Nah, FDIC receives $0 in appropriations from the Federal Government - it's funded by premiums that the banks pay and from earnings on US treasury deposits.


I did not know that. Thanks.


Shkreli is a prime example of our broken criminal justice system. His investors didn't lose money even though he did provide fraudulent information to raise capital.

Companies during the home loan crisis provided fake info(eg: fake income) to qualify for the home loans. And they got away with non-prosecution agreements and just fines. People's life savings were wiped out during the crisis.


He stole money from one group of investors, gambled with that money in a new company (while lying about it on all of the relevant financial statements) and eventually made the original investors whole --- if you ignore the profits that he made by using their money illegally. Why on Earth do people defend that scumbag? Because he had some Livestreams?

If you rob a bank, spend all that money on lottery tickets, then leave a sack of money for the exact amount you stole in the lobby after getting lucky, do you think everything should be copacetic?

1. You still robbed the bank!

2. Gambling with someone else's money isn't virtuous.


Yes for me it's fine. If I'm the bank, if you can do that without causing me harm or inconvenience then all I say is, whatever, good for you.


Do you think the fedex founder should be in jail when he gambled company money at a casino and used the profits to save the company. He committed financial fraud, I am sure his credit lines don’t allow for the money to be gambled at a casino.

I am willing to bet most startups’ financial decks have material mistatements.


Are you really this angry at him over illegal accounting/investing? Or are you using that as an excuse because you're actually angry at him over what he did with daraprim? I think many people defend him because they suspect people claiming to be mad about the former are actually mad about the later.

Edit:

> "So people are defending him on #1 because they think other people are too mad about #2? "

Yes that's my belief.

Imagine Mel Gibson was caught bringing weed into an authoritarian SEA country, and was sentenced to caning. Now imagine there were people celebrating that sentencing, because Mel Gibson is a racist. In this hypothetical, is he a drug smuggling racist? Yes. I wager you'd see people defend him though, and accuse people celebrating his caning as being biased by his racism.


I just can't imagine what he's done that's worth defending.. I don't care at all about him, the Daraprim thing was ugly and a symptom of what's wrong with the US pharma / PBM / insurance racket but it's not like that was virtuous either just because it was legal.

As far as I can tell he's done two things;

1. Profited handsomely off of white collar crime while defrauding his original investors.

2. The whole Daraprim thing.

So people are defending him on #1 because they think other people are too mad about #2?


What he’s done that’s worth defending? His actions pointed out a glaring flaw in the US healthcare system. I wouldn’t call him a whistleblower — more of an opportunist — but the effect of his actions was to blow the whistle on a broken system and get guys like me woke to the fact that the guys who make epi-pen and insulin did far worse than him, yet still walk free and unpunished.

The effect of Shkreli’s actions, to me personally, are functionally the same as hackers who hack into FB... only to have FB pay them for exposing the holes in their security system. Shkreli exposed a hole in the healthcare system. That he did so opportunistically is legitimately kinda gross, but the net benefit of his actions is that guys like me are now way more aware of the broken system that allowed him to operate in the first place. THAT’S what he’s done that’s worth defending.


This is exactly why I defend him.


> His investors didn't lose money even though he did provide fraudulent information to raise capital.

There are things broken with the way the criminal justice system judges the severity of crimes, but the idea that fraud shouldn’t be punished so long as investors get their money back leads to an even worse system.


Shkreli himself played a deliberate role in the public's perception of him. I've always wondered why but I suspect it was pig-headedness.


His interview with The Breakfast Club was good, better than they give him credit.


Martin Shkreli is not an asshole, he's a role model. You have merely fallen for the propaganda.


You forgot the /s (I hope).


Unfortunately, many people have been memed into believing Shkreli is a Good Guy™ and that he did nothing wrong.


It's a fascinating glimpse into the minds of conspiracy theorists. The "you've been duped" bit. The "actual hero" and the shadowy villains who "do the same". Fascinating. Inconsistent but such an enduring belief.


It is easy to demonize Shkreli when you look at the 5000% number. But what he did was sell 1 pill for half the price of a bottle with 100 pills. This sounds bad until you consider most hospitals were throwing out the bottles completely unused before the expiry date. Most hospitals were happy because now they were only wasting half as much money.


It is easy to demonize Shkreli when you look at the 5000% number.

Yes, it is. Very easy.

And why would a hospital buy so many pills if they knew they're eventually going to throw them away by the 100s?

And what supplier only sells low demand pills by the 100 count?


Hospitals HAVE to buy the pills because they need to be able to handle rare conditions if they occur. Shkreli FIXED the issue of only supplying 100 counts by offering a 1 count option. But obviously the overhead of manufacturing is the largest component of pill production. So he couldn't reduce the price by dividing by 100.


What costs are the overhead of manufacturing? The packaging? The packaging shouldn't cost ($750-$13.50) = $736.50.


Setting up the factory, R&D for the drug itself, etc.


Do you have a source for this? I did a quick search and couldn’t find anything. I did find the company saying they’d use the extra money to develop new drugs, which wouldn’t make much sense if the change actually brought in less money.


It seems like I got two stories mixed up. Here is one showing they started selling smaller bottles: https://www.fiercepharma.com/financials/turing-offers-discou...

Here is another one where they charge $1 for uninsured patients that make less than 5x the poverty line (most Americans): https://www.washingtonpost.com/national/health-science/for-s...

While not my original claim, my point remains, the 5000% number is incredibly misleading.


I don’t understand. How does this make the 5000% number misleading?


The 5000% number is misleading because that’s the most sensational metric.

For example, let’s say that the price of the drug was $0. Then he raised it to $1. Is he an awful person for raising the drug infinite %? It’s simply bad reporting. If you hate Fox News and their headlines, you should also hate these headlines.


Percentages certainly can be misleading, but they aren’t always. Your hypothetical is an example of how they can be. Consider a different hypothetical: the price was $13.50 and he raised it to $750. Is it misleading to report that as raising the price 5000%?


Replying to sibling: "Percentages certainly can be misleading, but they aren’t always. Your hypothetical is an example of how they can be. Consider a different hypothetical: the price was $13.50 and he raised it to $750. Is it misleading to report that as raising the price 5000%?"

Yes, it is incredibly misleading. How many people are affected? In practice, do the end consumers see this price increase? What caused the price increase? When was the last price increase?

I understand, 5000% is a fact in the story. However, it is sensational and the exact reason why you see it in about half the headlines of the story.


You keep giving hypothetical reasons why it might be misleading if certain things were true. I’m not interested in that. I can think of a million ways it could be misleading.

I want to know how it actually is misleading in this particular case. You were happy to provide specifics before. If you don’t have any now, then it’s wrong to insist that it definitely is misleading.


That's like saying refugees in the US should be grateful they were detained without recourse, rather than detained and beaten.


No, not at all. Also, classic straw man.

I'm saying statistics can be used to sensationalize a topic which clearly HN is on this issue due to my down votes.

Note that I never defended his actions, simply stated that Shkreli is demonized for a stupid number with no context instead of focusing on his crimes - lying to investors - or the underlying issues that allowed him to raise prices - broken health insurance.


I couldn’t agree with you more. Shkreli was a symptom of a broken system, not a disease in and of himself. Punishing Shkreli is like treating the symptoms of a disease without addressing the actual causes of the disease: broken health insurance, etc.

Shkreli ultimately just trolled the media too hard and they HAD to shut him down because if he kept going he was going to inspire a lot of copycats.


What I never understood about the college admissions scandal is why those rich parents were SO worried about their kids getting into some good college. They were rich! These kids would be 100% fine (actually more than fine) even if they didn't go to ANY college at all, and just stayed home and played video games all day!

The second thing I didn't get is why they would spend so much money on USC, which is not even a top school.


why they would spend so much money on USC, which is not even a top school

It might not be "a top school" by whatever criteria you're using, but it's a very good school. Depending on what major you're interested in, it's very much elite.

E.g. here's the title of a recent article it took me 10 seconds of googling to find: USC Film School Turns 90: Famous Alums Gather to Share Memories of a Hollywood Incubator[1]

Some other factoids:[2]

   Admission Standards  Elite
   Acceptance Rate      16%
   generally admitting students who score in the top 7 percent.
[1] https://www.hollywoodreporter.com/features/30-usc-film-schoo... [2] https://www.collegesimply.com/colleges/california/university...


> Acceptance Rate 16%

As the scandal proves, that was way too much. Either that, or they were kicking out deserving poor people to make room for the bribed kids.




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