A Case for Clemency:
Examining Comparable Sentencing in Securities Fraud Cases

Introduction

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The sentencing of James Velissaris, a conservative Christian and the former CIO of Infinity Q, to 15 years in prison for securities fraud is a stark outlier when compared to federal sentencing norms for white-collar offenses. This brief presents sentencing data and comparable cases to highlight the disproportionate nature of his punishment and underscore the need for clemency or commutation based on principles of fairness and justice.

 

Comparative Sentencing Data

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According to the Bureau of Justice Statistics’ Federal Justice Statistics Program (BJS FJSP):

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• From 2013-2022, over 45,000 individuals with no prior criminal history were sentenced for fraud offenses.

• Over 70% received less than 24 months in prison.

• Only 1-2% received a sentence greater than 10 years, making James’ 15-year term an extreme outlier in white-collar criminal sentencing.

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This disparity in sentencing is largely attributable to the government’s proposed loss amount, which, in James' case, was never definitively established.

 

The Issue with the Loss Amount Calculation

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James Velissaris’ conviction was based on allegations that he adjusted inputs within a valuation model, while he had purportedly represented to investors that the model was independent. However:

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• There was never an actual calculated loss resulting from these adjustments.

• Valuing illiquid securities is inherently complex, with a wide range of acceptable methodologies under Generally Accepted Accounting Principles (GAAP).

• The government claimed a loss amount exceeding $65 million, representing only 2.4% of the total fund portfolio, which was never conclusively proven.

• Given the nature of financial modeling, any differences in valuation fall well within the confidence margin typical of GAAP-compliant valuation practices.

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Furthermore, the independent model at issue, Bloomberg’s BVAL Tool, was used by the government to suggest valuation discrepancies. However, the SEC investigated Bloomberg and found that its BVAL service, between 2016 and October 2022, provided valuations based on single data inputs without proper disclosure, leading to a $5 million settlement. This finding calls into question the reliability of the BVAL Tool for valuation purposes (jurist.org).

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Sentencing Outlier: Intent and Proportionality

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A crucial aspect of fair sentencing in fraud cases is the consideration of intent, actual harm, and precedent. Historically, white-collar defendants who caused measurable financial losses have received significantly lighter sentences:

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• Elliot Smerling: In 2022, U.S. District Judge Denise Cote sentenced Smerling to 97 months (approximately 8 years) in prison for defrauding banks of approximately $133 million, a substantial portion of which he personally misappropriated (justice.gov).

• Martin Shkreli (Turing Pharmaceuticals): Convicted of securities fraud and conspiracy, sentenced to 7 years despite widespread public condemnation and financial losses.

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Comparatively, cases with more blatant fraud schemes and lower calculated loss amounts have resulted in significantly lighter sentences:

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• Trevor Milton (Nikola Corporation): Convicted of securities fraud for misleading investors about his company's technology and capabilities, sentenced to 4 years despite high-profile allegations and investor losses. Even this sentence proved to be unjust based on the President recently pardoning Milton in 2025.

• Andy Fastow (Enron CFO): Played a central role in one of the biggest accounting frauds in U.S. history, originally facing over 100 years, but ultimately sentenced to only 6 years in prison.

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James Velissaris, by comparison, was sentenced to 15 years for a speculative loss calculation, despite having no direct misappropriation of funds—a punishment that far exceeds cases of proven fraud and intentional financial misconduct.

 

Government Overreach and Selective Prosecution

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The severity of James' sentence suggests it was influenced more by external pressures than by an objective application of sentencing guidelines:

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• Former U.S. Attorney Damian Williams has publicly prioritized aggressive prosecution of white-collar crime, seemingly using James' case to set a precedent rather than to issue a proportional punishment.

• The recent Executive Order issued by President Trump (January 2025) acknowledges the misuse of federal prosecutorial power, stating:

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"The American people have witnessed the previous administration engage in a systematic campaign against its perceived political opponents, weaponizing the legal force of numerous Federal law enforcement agencies and the Intelligence Community against those perceived political opponents in the form of investigations, prosecutions, civil enforcement actions, and other related actions. These actions appear oriented more toward inflicting political pain than toward pursuing actual justice or legitimate governmental objectives."

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This directive specifically calls for a review and remedial action regarding DOJ and SEC activity over the past four years—the very period within which James was indicted and sentenced.

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Legal scholars have long debated the weaponization of regulatory agencies in white-collar crime cases. In a statement on selective prosecution, Harvey Silverglate, civil liberties attorney, has said:

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"When prosecutorial discretion is used as a political tool rather than a mechanism of justice, we risk eroding public confidence in the legal system."

 

Conclusion: A Call for Clemency

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James Velissaris' case exemplifies government overreach and an unjust application of sentencing guidelines. The sentencing far exceeds precedent, and the calculated loss amount driving it was speculative at best.