- Convicted fraudster Martin Shkreli is sentenced for securities fraud related to two hedge funds he ran and to his former drug company Retrophin.
- The notorious “pharma bro” gained infamy for raising the price of the drug Daraprim by more than 5,000 percent while running the company then known as Turing Pharmaceuticals.
- Shkreli already has been ordered to forfeit almost $7.4 million, and give up his ownership of a one-of-a-kind Wu-Tang Clan album because of his crimes.
- Notorious “pharma bro” Martin Shkreli was sentenced Friday to seven years in prison for federal fraud charges related to hedge funds and a drug company that he once ran.The sentencing came 2½ years after Shkreli, 34, attracted widespread negative media attention for his decision to hike the price of a drug by 5,500 percent at Turing Pharmaceuticals, another company he founded
But Shkreli’s sentencing in U.S. District Judge Kiyo Matsumoto in Brooklyn was not connected to that pricing of the anti-parasite medication, Daraprim.
It also wasn’t related to his social media trolling of adversaries, who have included Hillary Clinton, members of the hip-hop group the Wu-Tang Clan and journalists.
Instead, Shkreli will head off to prison from his current jailhouse abode for misleading investors about key details and the dismal financial market performance of the MSMB Capital and MSMB Healthcare hedge funds that he operated.
Shkreli also was convicted last August of conspiring to fraudulently manipulate stock shares of Retrophin, the pharma company he created after both hedge funds effectively collapsed.
Evidence at trial revealed that Shkreli had used stock and cash from publicly traded Retrophin to pay back the duped hedge fund investors, who all ended up getting more than they had originally invested.
Witnesses at that trial also painted a picture of Shkreli as a complicated person who could inspire grand visions of life-saving pharmaceutical treatments while also frustrating people with his habit of playing fast and loose with the facts.
A number of those witnesses testified to Shkreli’s brilliance, or even genius, as well as to his tendency toward depression and self-sabotage.
Defense lawyers had asked Matsumoto in a court filing last week to give Shkreli a relatively light prison term of 12 to 18 months, followed by 2,000 hours of community service and mandatory therapy.
They called Shkreli a “very unique defendant” who “is a kind, caring and generous person who uses his time and effort to help those in need.”
“If not warehoused in prison, Martin could literally save lives,” Shkreli’s lawyers wrote in their sentencing recommendation.
But prosecutors had asked for at least 15 years in prison.
They argued that Shkreli lacked “genuine remorse ” for his crimes, and had a pattern of deceptive schemes spanning even after the crimes for which he was convicted.
They called Shkreli “a man who believes the ends always justifies the means.”
Federal sentencing guidelines had suggested a prison term of decades, in large part because of Matsumoto’s finding that the losses from Shkreli’s crimes totaled $10.4 million.
The judge refused to give him credit for the fact that his hedge fund investors all ended up with more than they originally placed with him, noting that Shkreli only began his scheme to repay them with Retrophin’s assets after investors began raising red flags that they had been defrauded.
In addition to his prison term, Shkreli already had been ordered by the judge to forfeit nearly $7.4 million to the federal government because of his crimes.
To secure that award, Matsumoto had ordered Shkreli to give up his ownership of a $5 million stock account that had been used as collateral for a now-revoked release bond.
She also told him to give up his ownership if a one-of-a-kind Wu-Tang Clan album that he bought for $2 million, a Picasso painting, a Lil Wayne album, and his stake in Vyera Pharmaceuticals, which previously was known as Turing.
Shkreli has been locked up in a federal jail in Brooklyn since September, a month after his conviction, when Mastumoto revoked his $5 million release bond.
Mastumoto’s move came after Shkreli, in yet another social media stunt, offered his Facebook followers a $5,000 bounty for samples of Clinton’s hair. The offer, which Shkreli claimed was satire, drew the attention of the Secret Service, which provides protection for Clinton, and drew the ire of prosecutors.
Matsumoto said Shkreli represented a danger because of his bounty offer.
In a letter sent to the judge in advance of his sentencing asking for a light prison term, Shkreli wrote, “I was a fool,” and called himself “far from blameless.”
“I accept the fact that I made serious mistakes, but I still believe that I am a good person with much potential,” Shkreli wrote from jail.
“The trial and the six months in a maximum security prison has been a frightening wake-up call,” Shkreli wrote. “I understand how I need to change.”
Shkreli plans to appeal his conviction.