Pharma executive Shkreli sentenced to 7 years for fraud

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Martin Shkreli, a former pharma executive notorious for sharply increasing drug prices has been sentenced to seven years in prison after being convicted of fraud, reports The New York Times.

The report says Shkreli, 34, is best known for raising the price of a drug, Daraprim, bu 5,000% 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 three of eight 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, Judge Kiyo A Matsumoto of Federal District Court 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, reading 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 my gross, stupid and negligent mistakes I made.”

The report says 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.

Judge Matsumoto rejected that argument, citing legal precedents establishing that fraud losses cover property whether or not it is returned. She had ruled that Shkreli would also have to forfeit $7.36m to the government to cover his fraud.

Judge 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.

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. But, the report said, 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 Mr. 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 presidential hopeful Hillary Clinton’s head during her book tour. After that, Judge Matsumoto revoked his bail and sent him to the Metropolitan Detention Centre 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.”

The report says the judge also imposed a fine of $75,000, separate from the $7.36m in forfeiture that she ruled that he must pay, after noting that his net worth is $27.2m.

The New York Times report

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