Under the relevant sentencing guidelines, Mashinsky faced a potential 30-year prison term. However, federal judges must consider additional factors, including the defendant’s characteristics, personal history, and the likelihood of reoffending, when determining a sentence.
Timothy Howard, a partner at the law firm Freshfields and a former prosecutor for the Southern District of New York, explained that it is a complex task to assemble the facts needed to reach a fair sentence.
Prior to the sentencing hearing, Mashinsky’s legal team requested a custodial sentence of 366 days. They highlighted his admissions of guilt, military service in Israel, childhood hardships, and external market influences contributing to Celsius’s collapse.
Mashinsky’s lawyers argued in a court filing that the case was not about an arrogant, greedy swindler out to steal money for personal pleasure, describing such characterizations as superficial and inapplicable.
Conversely, the Department of Justice (DOJ) sought a 20-year sentence, asserting that although Mashinsky admitted to some lies, he showed no remorse. They argued that his deceit was neither naive nor accidental but a result of deliberate choices aimed at personal gain.
Prosecutors stated in their filing that Mashinsky’s actions were calculated and intentional, underscoring a profound lack of remorse which posed an ongoing threat.
The stark difference in sentencing requests highlighted a disagreement over the nature of Mashinsky’s misconduct. The defense claimed he was guilty of a few missteps, while the prosecution accused him of a widespread fraud scheme.
Katherine Reilly, a partner at Pryor Cashman and former leader of the SDNY’s fraud unit, noted that while factual disputes in plea cases are often minor, the defense argued the offense was narrower than the government suggested.
Howard commented on the defense’s strategy of seeking a minimal sentence while admitting limited wrongdoing, which he described as precarious. This necessitates balancing client advocacy with courtroom credibility.
The government compared Mashinsky to other convicted fraudsters, such as Sam Bankman-Fried, who received a 25-year sentence for his role in the FTX collapse. Mashinsky’s lawyers aimed to distinguish him by denying accusations of embezzlement or theft of customer funds.
Reilly pointed out that the submissions highlighted disputes over whether Mashinsky’s actions were errors in judgment or indicative of a fraudulent platform.
Ultimately, the judge ruled that the severity of Mashinsky’s crimes warranted a significant prison sentence. Following his sentencing, Mashinsky will be temporarily released until a suitable facility is chosen.
In the federal system, parole is not an option. Early release is possible only for good behavior, typically after serving 85% of the sentence.
Howard noted that pursuing a reduced sentence was risky, allowing prosecutors to argue that Mashinsky had downplayed his actions substantially.
