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Tales of the Inscrutable Criminal Mind: Remember, kids, crime doesn't pay — unless you're rich, powerful, and VERY careful

Friday, October 10, 2014 18:04
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(Before It's News)

After the 2011 Tohoku earthquake disaster, the James Perse store on Bleecker Street did a “Japan Window.” Last week the store became the site of one of the annals' more perplexing heists.

by Ken

I confess that in tonight's tale it was the “with underwear” in the head that made me click through to this true-crime report by DNAinfo New York's Danielle Tcholakian. I don' know why, exactly, or what I expected to find, but the underwear — while it's definitely in there — turns out to be the least of the perplexities of this story, in which the $28 boxers and $85 T-shirt are literally the least of the haul.

(1) There are victimless crimes, and then there's –

Man Steals Whole Outfit, With Underwear, Then Immediately Turns Himself In

By Danielle Tcholakian on October 10, 2014

WEST VILLAGE — A man walked out of the James Perse designer clothing store on Bleecker Street last week wearing an entirely new $1,674 outfit that he didn't pay for — and then walked right into the police precinct around the corner.

Matthew Redington, 33, walked into the James Perse at 361 Bleecker St. at about 6:30 p.m. on Oct. 2 and picked out an $85 T-shirt, a $135 sweatshirt, $195 sweatpants, $595 sweater, $127 socks, $509 tweed boots and $28 boxers, police said.

Redington went into the dressing room and put all of the clothes on. He then walked out of the store and, as baffled employees watched, headed right around the corner into the 6th Precinct stationhouse on West 10th Street, police said.

It was unclear why Redington walked into the precinct. An employee who followed him explained the situation to officers, police said.

Redington was charged with petit larceny and criminal possession of stolen property, according to court records, and released without bail. He is due back in court on Nov. 12.

The court-appointed attorney assigned to him at arraignment did not immediately respond to a phone message left for comment, and it was unclear if Redington had made arrangements for a new attorney since his arraignment.

The James Perse store declined to comment.

I'm going to confine my comment to: Huh???

(1) We've heard of victimless crimes, but this . . .


With a weekend coming up, and perhaps time for some more leisurely reading, I highly recommend taking advantage of The New Yorker's apparently still-continuing policy of letting the magazine's content all hang out for free online and reading a riveting and extensively as well as minutely reported account by Patrick Radden Keefe of what's described on the contents page as “the biggest-ever hedge-fund scandal”: “The Empire of Edge: How a doctor, a trader, and the billionaire Steven A. Cohen got entangled in a vast financial scandal.”

It took three years for the feds, first, to figure out whodunnit, and then another couple of years for the feds to bring him to trial — and, yes, get a conviction, but only of the trader, Mathew Martoma, and not the hedge-fund magician, Steven A. Cohen, under whose auspices, and for whose hedge fund, S.A.C. Capital Advisers, Martoma perpetrated the deed that eventually landed him a 9½-year prison sentence.

The deed was especially incredible to the people who knew Artoma's unlikely co-conspirator, a scion of the University of Michigan medical community, superstar neurologist Dr. Sid Gilman. Martoma induced Gilman to cough up confidential information about a drug study he was involved with, information that was used, first, to sink S.A.C. heavily into the stock of the two companies responsible, Eland and Wyeth for the Alzheimer's drug being tested, which was being talked about as “the next Lipitor,” and then, when the second phase of the drug trial produced equivocal results to stealthily siphon all their money out of then two companies' stock, in fact shorting the stock, betting against it, so that S.A.C. wound up with more than a quarter-billion dollar profit instead of something like a three-quarters-of-a-billion-dollar loss.

That the case was pursued at all has a lot to do with the unusual position of Preet Bharara, as of 2009 the U.S. attorney for the Southern District of New York, which was that yes, we prosecute insider trading. His position is unusual because insider trading, in addition to being awfully hard to actually prove beyond the proverbial reasonable doubt, normally carries no stiffer penalties than fines that inside traders a mere cost of doing business when weighed against the potential cash value of inside information that can provide what is known as “edge,” as in having edge. And it turns out that Steve Cohen's hedge-fund magic had a lot to do with insider trading, with his traders being put under unrelenting pressure to get themselves “edge.”

It was clear to observers from the start that something very strange happened the day after Dr. Gilman, on behalf of Elan and Wyeth, announced the mixed results of the test of the efficacy of bapineuzumab, popularly known as “bapi,” which had been shown to help some patients in the study but not others. As Keefe notes, investors don't go wild over a drug that helps some people and not others, and both companies' stock took a big hit. New York Stock Exchange monitors noted the stunning reversal in S.A.C.'s position in the companies, and consequently of their fate, and reported it to the SEC, and eventually Martoma's careful, intensive cultivation of Sid Gilman was unraveled.

Keefe gives us the background of all the players in the drama, and still can't explain how the aging medical lion let himself be drawn into such a mess. Now 81, he has lost pretty much everything he built up; he has been pretty much wiped clean from the memory of the University of Michigan.

As Keefe explains, once the link between S.A.C. and Dr. Gilman was established, and the mechanism of the insider-trading connection puzzled out, the man the feds wanted was Steve Cohen, but they didn't get him. Prosecutors assumed that, much the way an organized-crime case is broken by getting the goods on lower-echelon people and flipping them upward to the top, Mathew Martoma would give them Cohen. But he didn't. Keefe explores the possible reasons why, but also notes that quite possibly his testimony wouldn't have done it, since a guy like Cohen is unlikely to leave smoking guns lying around when it comes to breaking the law.

Dr. Gilman, as noted, lost everything, and Mathew Martoma is in the process of having the same happen to him. Not Steve Cohen, though.

After deliberating for three days, the jury convicted Martoma of two counts of securities fraud and one count of conspiracy. Rosemary wept as the verdict was read. The guidelines for his sentence would be based not just on the $9.3-million bonus he had received from S.A.C. in 2008 but also on the two-hundred-and-seventy-five-million-dollar profit that S.A.C. had made on the bapi trades. Yet Cohen was not charged with those trades, or even named as an unindicted co-conspirator. The judge, Paul Gardephe, went so far as to ask the attorneys to avoid discussing Cohen altogether, because he had not been charged with any crime. “General questions about how Steve Cohen conducted his trading, I think, are very dangerous,” he told them. “They represent a risk of opening the door to a broader examination of how Steve Cohen did business. . . . And I think we all agree that that is not a path we want to go down.” (In a subsequent ruling, Gardephe left little doubt about his own views, concluding that Cohen’s trades in July, 2008, “were based on inside information that Martoma had supplied.”)

During the trial, Cohen was photographed at a Knicks game, sitting courtside with the art dealer Larry Gagosian. According to a recent article in New York, Cohen told his children that he felt betrayed by his subordinates. “People in the company have done things that are wrong, and they’re going to pay for what they did,” he said. “I didn’t do anything wrong.”

Do yourself a favor and read the whole beautifully pieced-together story.



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