Martin Shkreli sentenced to 7 years in prison for fraud, conspiracy

Kevin McCoy | USA TODAY

Show Caption Hide Caption Shkreli sentenced to 7 years in prison says, 'This is my fault' Martin Shkreli was sentenced to seven years in prison for fraud. He told his family, "I love you. I miss you. Please don’t worry about me.”

Pharma bro Martin Shkreli was sentenced Friday to a seven-year prison term, ordered to forfeit nearly $7.4 million and fined $75,000 for the 2017 securities fraud and conspiracy convictions that upended the drug industry investor's career.

U.S. District Judge Kiyo Matsumoto imposed the punishment after Shkreli, best known for orchestrating a 5,000% price hike on a drug used to treat AIDS patients and others, tearfully acknowledged his guilt and asked for mercy.

The sentence gave the 34-year-old New York City businessman credit for six months of jail time he's served.

Before his punishment was handed down, Shkreli addressed the court: "The only person to blame for me being here today is me," he said as his voice broke and he tried to hold back tears. "There was no conspiracy to take down Martin Shkreli. I took down Martin Shkreli with my shameful and disgraceful actions."

Who is Martin Shkreli? Martin Shkreli is the former CEO of the biotech firm Retrophin, as well as the founder of Turing Pharmaceuticals AG. He went on trial, accused of defrauding investors of two hedge funds.

Matsumoto ordered him jailed in September after Shkreli asked supporters via social media to "grab" strands of hair from former secretary of State Hillary Clinton for him.

The episode was one in a series in which Shkreli, either in person or online, dismissed prosecutors as "junior varsity," called members of Congress "imbeciles," ridiculed reporters, boasted that he would win an acquittal, predicted he would serve little prison time, then called himself a fool in a written plea for mercy from Matsumoto.

His defense team, which recommended that he serve no more than 18 months behind bars before receiving unspecified therapy and performing 2,000 hours of community service, made a final written plea for leniency in a letter submitted to Matsumoto by lead attorney Benjamin Brafman.

The letter focused on the conundrum of Shkreli: How could the reviled poster boy for drug price hikes and degrading, bro culture verbal smackdowns also be the founder of a successful biopharmaceutical company and the would-be developer of medications for diseases that attack children?

"There are times when I want to hug him. There are times when I want to punch him in the face, because he's made my job more difficult," Brafman said.

Days after countering defense pleas for leniency with a recommendation that Shkreli serve at least a 15-year prison term, prosecutors used the sentencing hearing to characterize him as a calculated liar who stole millions of dollars and deceived his investors.

Assistant U.S. Attorney Jacquelyn Kasulis argued that a long prison term was warranted, because the scheme Shkreli was charged with took place over at least a five-year period and because he had shown "no respect for the law."

Shkreli stole "for his personal benefit," Kasulis said. "Because what motivates him is his own image (as a success). Without that image, Martin Shkreli is nothing. He needs to be mythical and larger than life. That's his Maserati."

Matsumoto previously ruled that the total loss amount in the fraud case was more than $10.4 million. She announced the forfeiture amount Monday, agreeing that prosecutors should be allowed to seek many of Shkreli's assets, including a one-of-its-kind album by the influential hip-hop band Wu-Tang Clan, a painting by Spanish artist Pablo Picasso and an album by rapper Lil Wayne.

Having the final say Friday, the judge said, "It is more than clear that Mr. Shkreli is an incredibly gifted individual who has a capacity for kindness," a reference to letters from family, friends and acquaintances who told of his charitable giving and other contributions.

However, Matsumoto said, Shkreli was responsible for "lies," "egregious abuses of trust" and manipulation of a public company. Though she accepted Shkreli's statements of remorse, she also noted that as recently as January 2018, he sent an e-mail that said, "F--- the feds" and claimed the government wouldn't get all of his money.

At the conclusion of the sentencing, she urged Shkreli to continue to try to make a contribution in the area of orphan drugs, saying he showed a special capacity for that research.

Shkreli could have fared far worse. Federal sentencing guidelines for his case called for 27 to 33.75 years of incarceration.

Shkreli plans to appeal his conviction.

Judge Revokes Bail for `Pharma Bro' Ex-pharmaceuticals company CEO Martin Shkreli has bail revoked in New York securities fraud case, heads to jail. (Sept. 13)

The case began in December 2015, when he was arrested and indicted on charges of running a Ponzi-like scheme that defrauded investors of MSMB Capital and MSMB Healthcare, hedge funds he once headed.

The indictment accused him of repaying the victimized investors with unauthorized stock grants from Retrophin, a pharmaceutical company he directed after the hedge funds closed. Shkreli allegedly conspired to manipulate the price of Retrophin shares.

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Jury selection in the case initially proved problematic. Many potential panel members said they'd heard about the steep price hike Shkreli helped impose in 2015 on Daraprim, a drug made by a company formerly known as Turing Pharmaceuticals. As a result, they said they could not weigh the case impartially.

Prosecutors alleged during the trial that Shkreli knowingly committed securities fraud as they called witnesses who said he had lied to them or misled them about their investments and the financial condition of the companies the businessman led.

Aggressive cross-examination by the defense team showed that many of the prosecution witnesses got their money back, with large gains.

'Pharma bro' Martin Shkreli takes to Twitter while waiting for verdict Martin Shkreli -- the so-called “Pharma bro” awaiting a verdict in a criminal fraud trial -- has taken to social media once again.

Shkreli, who Brafman argued lacked criminal intent and believed that what he told his investors was true, did not testify in his own defense.

Last summer, a seven-woman, five-man jury deliberated for five days before finding Shkreli guilty of two securities fraud charges and one count of conspiracy to commit securities fraud. The jurors found him not guilty on five other criminal counts.

Evan Greebel, a former outside counsel for a Shkreli-led company, was tried separately on charges that he aided the fraud. He was found guilty in January and is likely to appeal the verdict.

Follow USA TODAY reporter Kevin McCoy on Twitter: @kmccoynyc