Pharma Bro now Prison Bro as Shkreli Sentenced to 7 Years

'Pharma Bro' Martin Shkreli gets 7 years

in securities fraud case

Judge ruled earlier this week that Shkreli would have to forfeit more than $7.3M

The Associated Press 

Martin Shkreli, who became notorious for raising the price of a life-saving drug by 5,000 per cent and trolling critics on the internet with his snarky "Pharma Bro" persona, was given a seven-year prison sentence on Friday for securities fraud.

Martin Shkreli, who became notorious for raising the price of a life-saving drug by 5,000 per cent and trolling critics on the internet with his snarky "Pharma Bro" persona, was given a seven-year prison sentence on Friday for securities fraud. (Seth Wenig/Associated Press)

The smirk wiped off his face, a crying Martin Shkreli was sentenced to seven years in prison for securities fraud Friday in a hard fall for the pharmaceutical-industry bad boy vilified for jacking up the price of a lifesaving drug.

Shkreli, the boyish-looking, 34-year-old entrepreneur dubbed the "Pharma Bro" for his loutish behaviour, was handed his punishment after a hearing in which he and his attorney struggled with limited success to make him a sympathetic figure. His own lawyer confessed to wanting to punch him in the face sometimes.

The defendant hung his head and choked up as he admitted to many mistakes and apologized to the investors he was convicted of defrauding. At one point, a clerk handed him a box of tissues.

"I want the people who came here today to support me to understand one thing: The only person to blame for me being here today is me," he said. "There is no conspiracy to take down Martin Shkreli. I took down Martin Shkreli."

In the end, U.S. District Judge Kiyo Matsumoto gave him a sentence that fell well short of the 15 years prosecutors wanted but was a lot longer than the 18 months his lawyer asked for. He was also fined $75,000 US.

Shkreli was found guilty in August of lying to investors in two failed hedged funds and cheating them out of millions. The case was unrelated to the 2015 furor in which he was accused of price-gouging, but his arrest was seen as rough justice by the many enemies he made with his smug and abrasive behavior online and off.

The judge insisted that the punishment was not about Shkreli's online antics or his raising the cost of the drug. "This case is not about Mr. Shkreli's self-cultivated public persona ... nor his controversial statements about politics or culture," Matsumoto said.

This courtroom sketch shows former pharmaceutical CEO Martin Shkreli, left, seated next to his lawyer Ben Brafman in U.S. federal court in New York on Friday. (Elizabeth Williams via Associated Press)

But she did say his conduct after the verdict made her doubt the sincerity of his remorse. She cited his bragging after the verdict that he would be sentenced to time served. And she quoted one piece of correspondence in which he wrote: "F—- the feds."

The judge ruled earlier that Shkreli would have to forfeit more than $7.3 million in a brokerage account and personal assets, including a one-of-a-kind Wu-Tang Clan album that he boasted of buying for $2 million.

Defense attorney Benjamin Brafman described Shkreli as a misunderstood eccentric who used unconventional means to make his defrauded investors even wealthier. He told the court that he sometimes wants to hug Shkreli and sometimes wants to punch him, but that his outspokenness shouldn't be held against him.

"It's like the kids today who hit send before they really understand what they texted," Brafman said.

Prosecutors rejected that notion.

"Mr. Shkreli is not a child," federal prosecutor Jacquelyn Kasulis said. "He's not a teenager who just needs some mentoring. He is a man who needs to take responsibility for his actions."

Shkreli became the face of pharmaceutical industry evil in 2015 when he increased by 5,000 percent the price of Daraprim, a previously cheap drug used to treat toxoplasmosis, a parasitic infection that can be fatal to people with the AIDS virus or other immune system disorders.

Shkreli seemed to treat the case like a big joke. After his arrest in December 2015, he taunted prosecutors, got kicked off of Twitter for harassing a female journalist, heckled Hillary Clinton from the sidewalk outside her daughter's home, gave speeches with the conservative provocateur Milo Yiannopoulos and spent countless hours livestreaming himself from his apartment.

He also infuriated members of Congress at a Capitol Hill hearing on drug prices when he repeatedly cited his Fifth Amendment right against self-incrimination. Afterward, he tweeted that the lawmakers were "imbeciles."

Last fall, the judge revoked his bail and threw him in jail after he jokingly offered his online followers a $5,000 bounty to anyone who could get a lock of Clinton's hair.

Pride goes before destruction, a haughty spirit before a fall. Prov 16:18.

Wiping the Smirk Off Shkreli's Face

'Pharma Bro' Shkreli sent to jail after offering

$5k for Clinton's hair in cloning joke

FILE PHOTO: Martin Shkreli, former chief executive officer of Turing Pharmaceuticals and KaloBios Pharmaceuticals Inc © Brendan McDermid / Reuters

Convicted fraudster and former pharmaceuticals company CEO Martin Shkreli, once dubbed the "most hated man in America," is headed to jail after having his bail revoked over a Facebook post in which he offered $5,000 for a strand of Hillary Clinton's hair.

US District Judge Kiyo Matsumoto ruled on Wednesday that Shkreli's post on September 4 showed he posed a danger to the public.

In that post, the 34-year-old offered a generous bounty to anyone who could steal a hair from former Democratic presidential candidate Hillary Clinton while she was on her book tour.

"The Clinton Foundation is willing to KILL to protect its secrets. So on HRC’s book tour, try to grab a hair from her. I must confirm the sequences I have. Will pay $5,000 per hair obtained from Hillary Clinton," the Facebook post stated.

Although Shkreli's lawyer, Benjamin Brafman, argued the post fell under the right to free speech, Judge Matsumoto disagreed. 

"This is a solicitation of assault in exchange for money,” the judge said. “That is not protected by the First Amendment.”

Matsumoto was also unsympathetic to a letter written to her by Shkreli on Tuesday, in which the 34-year-old said the Facebook post was meant as satire. Brafman maintained that line on Wednesday, prompting the judge to pointedly ask: "What's funny about that?"

Wiping that smirk off Shkreli's face - now that's funny!

Matsumoto noted that one of Shkreli's 93,000 Facebook followers could have taken the post seriously, setting out on a mission to steal a piece of Clinton's hair.

The judge also pointed to a July post by Shkreli in which he said he would have sex with journalist Lauren Duca as part of a pattern of threatening behavior. Shkreli was banned from Twitter in January for harassing Duca after she refused his invitation to attend US President Donald Trump's inauguration.

The judge's ruling ordered that Shkreli's bail be revoked, resulting in jail time for the former CEO of Turing Pharmaceuticals, who was convicted in August of defrauding investors of two hedge funds he ran, MSMB Capital and MSMB Healthcare.

Brafman unsuccessfully pleaded with Matsumoto following the ruling, asking her to reconsider sending Shkreli to what he said would be a maximum security jail, or at least give him until Monday to prove he was not a threat. 

“We are obviously disappointed,” Brafman told reporters outside the Brooklyn, New York, courthouse. “We believed that the court arrived at the wrong decision. But she’s the judge, and right now we will have to live with this decision.”

Shkreli had been enjoying his freedom since his arrest in December 2015, after paying a bail of $5 million.

Matsumoto scheduled Shkreli's sentencing for the securities fraud conviction for January 16. His charges carry a maximum sentence of 20 years, but the 34-year-old is expected to serve much less, partly because none of the investors involved in his schemes lost any money.

Shkreli became a household name in 2015 when he raised the price of the anti-infection drug Daraprim by 5,000 percent, from $13.50 to $750 a pill.

That move resulted in him being dubbed "Pharma Bro" and "the most hated man in America," as people with weakened immune systems - including AIDS patients - have come to rely on the pill.

Following a backlash from politicians, patients’ rights groups and Twitter users, Shkreli eventually announced his company had agreed to "lower the price of Daraprim to a point that is more affordable and is able to allow the company to make a profit, but a very small profit," ABC News reported at the time.

'Pharma Bro’ Martin Shkreli Guilty of Fraud

© Spencer Platt / AFP

Eccentric former pharmaceutical CEO Martin Shkreli, dubbed “the most hated man in America,” has been convicted of fraud for deceiving investors in a pair of failing hedge funds. His defense team argued that his investors made hefty profits.

A New York jury deliberated for five days before finding Shkreli guilty of three out of eight counts against him. He was found guilty of securities fraud but not of conspiracy to commit securities fraud and conspiracy to commit wire fraud, AP reported.

Prosecutors in the five week trial accused Shkreli of repeatedly misleading investors about what he was doing with their money.

Shkreli, 34, told “lies upon lies,” including claiming he had $40 million in one of his funds at a time when it only had about $300 in the bank, Assistant US Attorney, Alixandra Smith said in closing arguments, reported AP.

Prosecutors said he kept making horrible stock picks which forced him to cook up schemes to recover millions in losses.

The federal trial “exposed Martin Shkreli for who he is really is – a con man who stole millions,” said another prosecutor, Jacquelyn Kasulis.

Shkreli, who comes from an Albanian family in Brooklyn, was arrested in 2015 on charges he looted Retrophin, another drug company he founded, of $11 million in stock and cash to pay back hedge fund investors.

Investors took the witness stand to accuse Shkreli of keeping them in the dark as his scheme unfolded.

Complicating the case however, was testimony from some wealthy financiers in Texas, who conceded that Shkreli’s scheme made them richer, in some cases doubling and even tripling their money on his company’s stock when it went public.

"Who lost anything? Nobody," defense attorney Ben Brafman said in his closing argument.

Some investors had to admit on the witness stand that partnering with Shkreli was "the greatest investment I've ever made," he added.

Shkreli came to national attention after he purchased rights to a life-saving drug, Daraprim, in 2014, where he promptly raised the price from $13.50 to $750 per pill, leading him to be referred to as “the most hated man in America” and “pharma bro.”

He faces as much as 20 years in prison.