Diddy Prosecutors Take Monumental Loss in Criminal Case

The Diddy trial is mostly in the books after the jury acquitted him of the most serious charges -- racketeering and sex trafficking -- and prosecutors are coming out looking like huge losers.

Diddy learned his fate Wednesday when a jury of his peers reached a verdict in his criminal case ... and they only found him guilty on a pair of lesser charges ... two counts of the Mann Act -- transportation for prostitution across state lines.

The Bad Boy Records founder skated on the bigger charges and there's no way prosecutors would have brought this case if all they had on Diddy was a prostitution offense.

Jurors weren't buying what the prosecution was selling when it came to racketeering and sex trafficking ... and the feds failed to prove their case beyond a reasonable doubt.

Looking back, the fact that prosecutors held a press conference to announce the indictment and ended up talking about baby oil seized from Diddy's homes in federal raids makes this case even stranger ... and there's some question if this was all a publicity stunt from prosecutors looking to make a name for themselves.

Diddy is still in custody because a judge denied him bail pending sentencing ... but he came out a winner today and prosecutors came out big losers ... and it will be interesting to see the sentence the judge imposes.