NEW YORK: Martin Shkreli, a former pharmaceutical executive notorious for sharply increasing drug prices, mounting sneering defenses of his actions and even issuing a bounty for one of Hillary Clinton’s hairs, was sentenced Friday to seven years in prison after being convicted of fraud last year.
Prosecutors had sought a sentence of at least 15 years; the defence had pushed for 12 to 18 months.
Shkreli, 34, is best known for raising the price of a drug, Daraprim, by 5,000 per cent in a move that was widely condemned by the public and politicians. His fraud convictions were unrelated to that episode, stemming instead from his involvement with Retrophin, a pharmaceutical company he founded in 2011, and two hedge funds he ran.
In August, a jury convicted Shkreli, nicknamed Pharma Bro, on 3 of 8 counts, concluding that he had lied to investors about, among other things, how the hedge funds were managed, what they invested in and how much money they had. The jury found that he had also secretly controlled a huge number of Retrophin shares.
As she imposed the sentence, US District Court judge Kiyo A. Matsumoto cited Shkreli’s “egregious multitude of lies.” She said he seemed “genuinely remorseful,” but he “repeatedly minimised” his conduct, including in statements and emails after his conviction.
“I was never motivated by money,” said Shkreli, wearing dark prison scrubs and sitting at the defence table as he read from notes before the sentence was handed down. He cried as he gave his statement, dabbing at his eyes with a tissue. “I wanted to grow my stature and my reputation. I am here because of the gross, stupid and negligent mistakes I made.”
Shortly after Shkreli’s conviction, his lawyers suggested that he would not be sentenced to prison. They noted that he had ultimately paid back his investors, meaning there was no financial loss — a key variable in determining sentences for white-collar criminals.
Matsumoto rejected that argument, citing legal precedents establishing that fraud losses cover property whether or not it is returned. She had ruled Monday that Shkreli would also have to forfeit $7.36 million to the government to cover his fraud.
Matsumoto also authorised the government to seize Shkreli’s assets, including a one-of-a-kind Wu-Tang Clan album and a Picasso, if he was otherwise unable to come up with the required restitution.
How much is the Wu-Tang album worth? Shkreli reportedly bought the sole copy of ‘Once Upon a Time in Shaolin’ for $2 million. Now, one memorabilia dealer said, “the bloom is off the rose.”
Shkreli’s supporters argued, in letters submitted to the judge before sentencing, that he was a bright, nerdy child who became consumed with internet fame.
Raised in Brooklyn, Shkreli was physically abused by both of his Albanian immigrant parents and witnessed domestic abuse in his home, according to a submission from a consultant hired by his lawyers that was reviewed by The New York Times. He suffered panic attacks. He funnelled his energy into numbers: By the time he was 6, one of his sisters wrote, he calculated square roots and knew the periodic table.
At school, he was “ashamed of his own upbringing,” a friend, Franky Guttman, wrote. After Shkreli landed an internship at a Wall Street firm in high school, Guttman recalled being struck by how his friend could watch millions of dollars being traded, yet often arrive at school without lunch money.
Several years ago, as Shkreli gained notoriety, the two men stopped talking to each other. “The affable, funny guy I knew,” Guttman wrote, “slowly gave way to his public persona.”
During and after his trial, Shkreli’s behaviour online exacerbated his plight. As the proceedings wrapped up, for instance, he wrote on Facebook that if he were to be acquitted, he would be able to have sex with a female journalist he often posted about online. It was one of several posts that prosecutors cited in a pre-sentencing submission in which they argued that any remorse Shkreli claimed to feel was only for show.
In September, less than a month after his conviction, Shkreli offered $5,000 to any of his online followers who plucked a hair from Clinton’s head during her book tour. After that, Matsumoto revoked his bail and sent him to the Metropolitan Detention Center in Brooklyn. He has been there since.
“He wants everyone to believe that he is a genius, a whiz kid,” Jacquelyn Kasulis, a prosecutor said, as she argued for a 15-year sentence. “He can’t just be an average person who fails, like the rest of us.”
“There are times when I want to hug him,” Shkreli’s lawyer, Benjamin Brafman, told the judge Friday, arguing for a short sentence. “There are times I want to punch him in the face because he’s made my job more difficult by some of the things he’s said.”
The judge also imposed a fine of $75,000, separate from the $7.36 million in forfeiture that she ruled Monday that he must pay, after noting that his net worth is $27.2 million.
Before she adjourned court, Matsumoto encouraged Shkreli to continue teaching inmates, as he has been doing in jail.
“Thank you very much, Your Honour,” Shkreli said.
