A federal judge sentenced former pharmaceutical executive and hedge-fund manager Martin Shkreli to seven years in prison Friday following his earlier conviction on three of eight counts of securities and wire fraud charges.
According to reporters present in the Brooklyn courtroom, Shkreli gave an emotional and tearful speech prior to his sentencing, taking blame and responsibility for his actions and saying he had changed as a person since his conviction. US District Judge Kiyo Matsumoto reportedly handed him a box of tissues and took a lengthy amount of time reviewing his transgressions and history.
The sentencing caps a long, public saga for Shkreli, who is widely reviled for drastically raising the price of a cheap, decades-old drug, as well as provocative and offensive online antics, including harassing women.
His reputation and behavior was an issue during the fraud trial and jury selection. In court today, Shkreli’s lawyer, Benjamin Brafman, reportedly asked the judge not to hand down a long sentence to Shkreli simply “because he’s Martin Shkreli.”
Shkreli was convicted in August of last year on charges related to a Ponzi-like scheme involving two hedge funds he previously managed and his former pharmaceutical company, Retrophin. Prosecutors said that starting in 2009 Shkreli defrauded hedge fund investors, lying to them about losses, and used Retrophin as his “personal piggy bank,” siphoning millions of dollars’ worth of assets from the company to cover those losses. Shkreli was indicted in December of 2015 on the charges.
After five full days of deliberations last year, a jury found Shkreli guilty on two counts of securities fraud and one count of conspiracy to commit securities fraud. Shkreli faced up to 20 years in prison, and federal prosecutors argued for a sentence of 15 years, reportedly calling him “dangerous” in court today.
In February, Judge Matsumoto ruled that Shkreli’s fraud caused losses worth $10.5 million, an amount that could justify a long prison sentence under federal sentencing guidelines. Shkreli and his lawyer argued that because defrauded investors eventually made their money back—and more—that the losses were much less, at most about $500,000. They argued that an appropriate sentence would be 12 to 18 months.
Judge Matsumoto rejected the argument and on Monday ordered Shkreli to forfeit nearly $7.4 million in assets. Up for forfeiture are a painting by Pablo Picasso and the single copy of the Wu-Tang album Once Upon a Time in Shaolin, which Shkreli reportedly bought for $2 million. These and other items could be sold in auction by the federal government.
With today’s sentencing, Shkreli is headed back to jail. Though Shkreli initially posted $5 million in bail after his 2015 arrest, Judge Matsumoto ordered him to prison to await sentencing in September of last year following more online antics. In a Facebook post, he had offered followers $5,000 to pluck a hair from Hillary Clinton. Shkreli tried to pass it off in court as an awkward joke, but Judge Matsumoto called the move a “solicitation of assault.”
In today’s sentencing hearing, Brafman reportedly read letters of support from Shkreli’s fellow inmates.
The fraud case and online antics aside, Shkreli is best known for raising the price of a drug for parasitic infections by more than 5,000 percent—from $13.50 a pill to $750 a pill—while he was the CEO of Turing Pharmaceutical. The drug, Daraprim, is often prescribed to babies and people with HIV/AIDS.
Shkreli reportedly plans to appeal his conviction. Because he has already spent approximately six months in prison, his remaining time to serve is six and a half years.
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